I was looking at used Evs and I keep seeing 1 or 2 yr old VW id4s with very little miles for like $25-30k. Is there a reason why they lose their value so quickly? I even saw a 2022 Pro S with 2k miles for $28k. Someone basically lost $20k driving it off the lot 😓
Or it’s the $15k in tax credits we got that turned our $49k car into a $34k one. Things like this tend to take a bite into resell prices
This. You have to measure the depreciation against what it will cost to buy a new one right now with the various incentives in place.
It will be interesting to see how things shake out over time. I think new EVs will contine to have pretty steep initial depreciation, but actually stabilize a bit in years 3-5. That seems to be the case with a lot of Teslas. Basically rapidly drop below $30k, but stay between 20-30k for a long time. Lots of demand for good, reliable, used cars in that price range.
I’m kinda curious how things shake out in the 20-30k range given the $4k used car tax rebate. It’s income limited and you can’t use it for private sales, but if a $25000 EV can be had for $21000, does that devalue the used car value or increase it?
Almost certainly increases it, but not clear how much effect it will have since it’s only available for vehicles that are resold for the first time. Basically if you buy an EV it will be optimal to hold it until the price drops below $25k before reselling/trading it in. Unfortunately, virtually all leased EVs will be returned before they drop below $25k. When I was EV shopping, most had residuals in the low $30k range, so those EVs will never be eligible for the used tax credit. In short the limited number of vehicles that will be eligible and the limited number of customers who will qualify is likely to limit both the usefulness of the credit and its effect on the used market/residuals.
Oh it’s only for the first time it sells as used? I feel like that’s going to make purchasing even more confusing since people are gonna go in assuming every 20k ish EV will qualify and then end up getting screwed somehow.
This is one of the more infuriating parts of EVs for me right now. My state doesn’t offer any incentives. But the car is priced the same here as it is in any other state. So even with my best negotiation skills I’m going to be paying more for this car than I would in Colorado or somewhere else. But I may not live here when I go to sell it. My car’s resale value is affected by Colorado policy even though I don’t live there. And yes, I know some states not having sales tax has always been a thing, but I think the incentives have a bigger impact. The default assumption is the car has a bunch of incentives, so you’re screwed if you don’t have those. The default for taxes is that you pay them, not that your state has 0 sales tax.