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    Electric Vehicles Have Seen Significant Price Drops In The Used Car Market, Outpacing Gasoline Cars In Terms Of Depreciation Rates

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    Used car sales
    Used car sales

    Used car prices have been heading for more reasonable territory after an extended period of high values and inventory scarcity.

    Row of different used cars
    Row of different used cars

    But some vehicles are depreciating faster than others, with electric vehicles (EVs) taking the lead in the race to the bottom, according to a recent study by automotive data analyst iSeeCars.

    Perfect car selection
    Perfect car selection

    The study provides an insightful look into the current state of the used car market, particularly highlighting the stark difference in depreciation rates between used EVs and their gasoline counterparts.

    Several new cars at dealership salon.
    Several new cars at dealership salon.

    The automotive data outfit found that on average, used electric models saw their values plummet by almost 32 percent over the past year, while used gasoline vehicle prices dipped by just 3.6 percent. To put this into perspective, in February 2024, the price drop for used EVs was recorded at 31.8 percent, making a stark contrast to the rest of the automotive market.

    TUSCANY, ITALY - 27 June: New cars parked at distribution center
    TUSCANY, ITALY – 27 June: New cars parked at distribution center

    This is a significant revelation, especially considering the considerable consumer interest in EVs as an alternative to traditional gas-powered vehicles.

    line of luxury used cars
    line of luxury used cars

    Tesla, a heavyweight in the EV industry, has played a substantial role in this trend, with the company’s aggressive price cuts setting the pace for the market.

    Car parking in asphalt parking lot in a row, front of  cars close up, automobile transportation dealer business concep
    Car parking in asphalt parking lot in a row, front of cars close up, automobile transportation dealer business concep

    “Elon’s desire to maintain new Tesla sales through price cuts had a very destructive impact on the brand’s residual values,” noted Karl Brauer, iSeeCars’ executive analyst.

    Market of second hand used cars in Kaunas city
    Market of second hand used cars in Kaunas city

    This strategy led to four of the most significant price drops in the overall used market between 2023 and 2024 being attributed to Tesla vehicles.

    Lady and car
    Lady and car

    On the opposite end of the spectrum, several brands, primarily within the performance and premium segments, saw their vehicle values increase. For instance, the Porsche 718 Cayman experienced a price hike of 29.4 percent, while the BMW 5-Series Hybrid and Volvo S90 saw their prices jump by 18.7 and 13.9 percent respectively.

    Used Car for Sale
    Used Car for Sale

    This trend underscores the distinct market dynamics where affluent buyers continue to drive up prices for select models regardless of broader market tendencies.

    Row of cars
    Row of cars

    iSeeCars’ study also detailed the magnitude of depreciation among various EV models. The Chevrolet Bolt EV, for example, suffered a 30.4 percent drop, while the Nissan Leaf and Kia Niro EV followed with significant declines of their own.

    The Parked Cars
    The Parked Cars

    What stands out is that, despite the massive price drops, the average cost of a used gas-powered model, hybrid, and EV have all settled around the $31,000 mark.

    Four wheel drive utility vehicles for sale
    Four wheel drive utility vehicles for sale

    This represents a drastic change from February 2023, when used EVs were priced much higher, on average, at $45,321. However, Brauer points out that the average used car price is still substantially higher than the pre-pandemic average of roughly $20,000, offering no immediate hope of returning to those levels.

    Used Car
    Used Car

    While EV prices are seeing signs of stabilization, the current market offers an advantageous opportunity for potential buyers who may be considering an electric vehicle. With price points becoming increasingly similar across different powertrains, the choice for consumers expands to preferences over price.

    Young man and seller  in car dealership
    Young man and seller in car dealership

    Nonetheless, it’s important to note that the larger context of used car pricing is still significantly affected by the economic aftermath of the pandemic.

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