There is an old adage that goes: ‘as soon as you drive your car off the lot (the car salesroom), it loses half its value’. This statement has never been totally accurate as price drops for used cars were never that dramatic.
However, new data from iseecars.com show that EVs are now depreciating in value so rapidly that used models can be bought at an even cheaper price than their gas-guzzling counterparts.
Tesla Price Cuts
The downward trend in EV prices may have been sparked by a series of price cuts to Tesla models last year.
Tesla have also issued a large number of recalls this year due to various faults, leading FCA and Ford with 4,411,725 vehicle recalls this year.
EV Price Plummet
The study finds that the prices of EVs are plummeting, especially in comparison to hybrids and gas-powered cars.
In August 2024, EV prices had fallen 4 times faster than hybrids, and 6 times faster than gas cars.
Study Population
The study looked at a large sample of cars, chosen to try to reflect, practically, the used car market that consumers might be looking at.
It covered 1.6 million used cars, 1 to 5 years old, and tracked their price depreciation from August 2023 to August 2024.
Tesla Largest Decline
The price drops of specific car models were also noted, with a variety of car companies making up the top 10.
Tesla’s Model 3 led the way, with a 24.8% decrease in year-on-year average prices since August 2023, with the Kia Nero EV (21.0%) and Maserati Levante (20.2%) making up the top 3.
Used Car Market By Car Type
Looking at the percentages, we can see that used hybrid and gas car prices are relatively stable, while EV price drops are still adjusting downward.
The prices of EV cars aged 1 to 5 years old have dropped, on average, 24.7%, while hybrids have dropped 6% and gas vehicles 4.4%.
EV Market Actually Becoming More Stable
Although prices are still dropping rapidly for EVs year-on-year, prices were actually dropping at a much faster rate previously.
Towards the end of 2023, year-on-year price drops were around 30 to 40% for used 1-to-5-year old EVs.
Market Adjustment
This levelling off of price drops for EVs may indicate that the prices of the cars are finally catching up to demand, according to iSeeCars analyst Karl Brauer.
“The substantial drop in EV prices over the past year appears to have brought them in line with demand, with used EV days-on-market much lower today, reflecting a faster selling rate compared to a year ago.”
Final Price
The price drops recorded throughout the year may therefore stabilize, and reveal a truer market price for 1-to-5-year old used EVs.
At the moment, the average price for the vehicles is around $27000, while the price is expected to stabilize soon at around $25000. Used gas cars are still selling at over $30000 on average.
The Right Time to Buy an EV?
All this means that now may be about the right time to buy a used EV, according to Brauer, who believes that “people waiting for a good deal on a used electric car have been rewarded for their patience.”
“If you bought a used EV a year ago you probably bought too soon, but at today’s prices a used EV is starting to make sense—assuming your lifestyle and vehicle needs line up with the benefits and limitations of an EV.”
