Prices for used electric cars have plummeted

(NewsNation) — Used electric vehicle prices have plummeted following price cuts for new electric vehicles led by Tesla.

Tesla, along with other electric vehicle makers, has cut prices on new models to boost sales as interest in electric vehicles has waned. This has led to a glut of unsold used EVs, a reversal of a previous trend where used EV prices had risen to levels similar to new EVs due to supply chain issues.

In September, the average price of a three-year-old electric vehicle was about $28,400, down 25% from early 2023, Edmunds said. It’s also a bigger drop than prices for other used cars, which have remained relatively stable.

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Another cost-pressuring factor is Hertz’s decision to retire a large portion of its Tesla fleet, increasing inventory in the used car market.

The surge in leasing has also changed things, with more electric vehicle owners choosing to lease new models rather than buy them outright. Combined with falling prices and some dealers using tax credits on purchases to attract buyers, a new EV could be comparable in monthly payments to a used one.

This leasing trend could mean used car prices will continue to decline as leased vehicles enter the used car market after their lease ends.

While the drop may be good news for buyers, especially those on a budget, it is less welcome for sellers and dealers. The Wall Street Journal reports that many electric vehicle owners are now faced with cars being sold for less than what they owe on their loans, leaving them underwater.

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