Rethinking your approach to used EV values

Posted by CarGurus Admin on November 4, 2019

Electric vehicle residual values are tricky things to predict. Continual advances in the technology and the rapid escalation of new models means second-hand examples can become an unknown quantity and much harder to value than established petrol and diesel equivalents.

For lack of a time-honoured structure, dealers need to make sure they’re buying and selling used EVs for the right money. We explain how you can stay one step ahead of the plug-in pricing game.

What’s the problem with used EV prices?

The used car market likes what it knows, and it isn’t hard to put a value on, say, a second-hand petrol hatchback, because they’ve been around in abundance for decades. The difficulty with electric vehicles is that even the earliest mainstream examples are less than 10 years old. The first generation of the Nissan Leaf, for example – Europe’s best-selling electric car – was launched in 2010.

Plenty of other cars have debuted since then, but the technology is the sticking point. The original Leaf had a range of 124 miles according to the old and more lenient NEDC cycle, while the range-topping e+ version of the latest model will cover 239 miles under the latest and more stringent WLTP test. It’s just one example – and models capable of more than 300 miles already exist – but that leap illustrates how far electric cars have come in a relatively short time.

These changes are not gradual, they keep coming and at a much faster pace than petrol or diesel developments, and the used car market is steadily taking on more and more electric vehicles with far inferior ranges and technology than the current crop – which is not good news for residual values.

How to approach used EVs

Residual value setters were almost universally gloomy about used electric cars at the beginning of the decade, but they’ve since softened their stance as EVs have stuck around and worries about the reliability of the batteries have eased.

That still leaves the issue of rapidly developing technology and ranges, so it’s a good idea to divide second-hand EVs into two camps. The first is newer models, which are great news if you’re selling at the upper end of the used car market. This is particularly relevant to franchised dealers retailing vehicles via used-approved schemes, who will typically be dealing with younger stock. As a rule, the more recent the model, the better the range, and buyers should expect to pay a premium for that.

Older electric vehicles look like a harder sell when they’ve been superseded by more advanced models, but that doesn’t mean there isn’t a market for them. Early examples, such as the Renault Zoe or Citroen C Zero, have dropped in price to the point where they represent good value, and while they may not have the best ranges, they’re an awful lot cheaper than the latest 200-mile-plus EVs and ideal for eco-minded buyers with low annual mileages. That makes them great fodder for independent dealers, typically selling more affordable used cars. Put simply, it’s a case of gearing the respective products to the right buyers.

Tailor your second-hand EV strategy

As with sales of all types, it’s vital to know your market and tailor products and services accordingly. Remaining up to speed on the latest EVs will help to price and place used examples, regardless of their age, and it’s also worth remembering their ancillary perks, such as lower maintenance costs – there are fewer moving parts, so there’s less to treat or to go wrong – so don’t forget to mention these to buyers.

Pricing data is invaluable in any instance, but it’s even more useful when you’re dealing with the lesser known, so lean on the guides and residual value specialists to get as good an idea of an EV’s worth as you can and, finally, make sure the car has a charging cable. It sounds painfully obvious, but it really is make or break for a sale.

Topics: electric vehicles, EVs, industry insights, pricing