Despite its recent rise, a gallon of regular gas is still $1.06 cheaper today than it was a year ago, according to AAA. That’s led prices for used electric vehicles to plunge, The Wall Street Journal reports.
How much? Try more than $2,000. That’s the difference in average listing prices between a 3-year-old Nissan Leaf on Cars.com in January 2015 versus a 3-year-old Leaf in January 2014. Last month, the average 2012 Nissan Leaf listed for just $15,575 — a $2,226 drop compared to the average listing price for a 2011 Leaf in January 2014, which was $17,801.
The drop reflects a rough stretch for EV resale value, but it’s great news if you’re shopping for a used plug-in car.
Gas prices aren’t the only thing hurting resale values; The Wall Street Journal notes that battery concerns and federal tax credits (up to $7,500 for new cars but zero for used buyers) also play a part. Automakers have greased the skids with incentives, too: Nissan offered as much as $3,500 off on a new Leaf in January versus no cash rebates the year before. And that’s before the tax credit.
Such factors often hurt resale values, but so have significant improvements during the Leaf’s tenure. More standard features for 2012 and faster charging and a huge price drop for 2013 make early models seem outdated. Citing data from the National Automobile Dealers Association, The Wall Street Journal said average trade-in values for the Leaf and a few other plug-in cars plunged between 22 and 35 percent in 2014, nearly twice the rate of comparable gasoline cars. Leasing companies are taking the brunt of that: Some 85 percent of Leafs were leased in 2014, and according to the newspaper, residual values are thousands of dollars less than originally estimated. Absent heavy lease incentives by Nissan, that will all but certainly drive up lease rates down the road.
Nissan and other plug-in automakers seem ready to ladle on the deals. Per-vehicle incentives for the Leaf, Chevrolet Volt, Toyota Prius and Ford C-Max have all increased between January 2014 and 2015, in some cases by large chunks. Not that the extra discounts have helped the sales malaise. In January 2015, sales for all four cars fell 4.9 percent combined, and that was as all new-car sales gained 13.7 percent.
There is one bright spot. Because of their limited EV range, cars like the Leaf should have lower mileage over the long run, given it’s unlikely that many were used for interstate travel. Nearly 90 percent of 3-year-old Nissan Leafs on Cars.com have less than 30,000 miles. By contrast, less than 40 percent of 3-year-old Honda Civics have that kind of mileage.
That should have a positive effect in the long run, but the biggest immediate factor is gas prices. This month’s uptick will have to turn into a full-on surge to propel EV resale values back up — and that’s something few drivers want to happen.
Cars.com photo by Evan Sears