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 😓
Because it’s garbage
Not losing 5k to drive a car off the lot is the historical weirdness. In the 80s and 90s basically you lost 25% on day 1.
So that part seems normal. Why we had used cars going for over MSRP was just due to shortages.
I’m hoping the car bubble is over.
Pre-covid you couldn’t buy a vehicle, drive it for a year, then sell it for a profit.
I knew of guys with a new vehicle continually on order. Because they knew when the next one showed up, they could sell the current one, order another new one, and make money doing it.
I knew a guy driving a vehicle for a dealership because they had it sold out of the country. It had to be insured and driven for a number of months before it could be exported.
It reminds me of the housing bubble where people had multiple new homes being built at the same time. They lost it all when it crashed and they couldn’t make mortgages on 4 houses.
And speaking about houses. My wife’s new car cost more than our first condo.
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 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.
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.
The first generation ID4s are seen to be more problematic than current generation ID4s so there’s an additional discount for reliability concerns on these older models in the used market.
It’s an id4. Low range EV and not a great one at that, was never going to hold its value
because unlike a gas car it has a battery that degrades over time. It also can’t compete with the newer ones in terms of range so the value will always depreciate quicker until innovation slows down
Because it sucks
Tesla started the price war. Good for new buyer bad for the one that already bought a car in 2022
Meh, I got ludicrous trade in value for my car in 2022 and interest rates were 2%, it’s a wash overall.
Sure, because their prices were way too high to begin with. Many people were financing them due no interest.
The tax credit has a big impact. The Tesla price cuts have had a big impact.
Used vehicles have returned to a normal depreciation curve now that covid related supply issues have abated.
Don’t forget the 2022 recalls where the backup camera stopped working. That had a big impact on those getting off the lots because the parts weren’t readily available, and the issue was known for a long time.
And now they just had a huge 2022/2023 recall. That doesn’t help sales.
To some extent. Toyota still isn’t making enough cars to meet demand because they’ve taken so long to get their crap back in order.
They are doing it on purpose
Why? To drive up their price? Doesn’t seem smart when interest rates are high. Shoppers are now being cautious
TOYOTA buyers swear by them and are brainwashed that everything else is like being a 2nd class person. So, Toyota is capitalizing on this belief.
The Japanese government didn’t want to rely on Chinese rare earth or battery technology. The Japanese companies decided to focus on hydrogen. Former auto execs got into government and wrote regulations that supported that, and that + sunk cost fallacies is why they are where they are.
doing what on purpose?
producing record numbers of vehicles almost every single quarter this year?
they are almost back to pre covid levels in a shrinking market and are only 3% below their all time high in 2014.
Actually Toyota is sending inventory to other countries over the us, because they are more profitable. So, yes the numbers in the us are being kept low by Toyota on purpose…
Really? Like US made cars are being exported ?
Are they really in demand or is it an illusion, because they’re suppressing supply?
Just remind you that they are making a lot of profit, because they now make most of their cars in almost highest trim possible.
Why would they try to make more lower trim when customers now are used to higher trim already. Makes no sense to me. I think Toyota will never be the Toyota they used to be.
For 2023, there is an remodeled version available with a better suspension and more horsepower… Sonthey want to get rid of 1 year old cars at the dealership
Multiple factors all at once
- Supply issues - Two years ago car manufacturers couldn’t get some required components and it took months or years to get a car (I waited 15 months to from order to delivery on my 2022 ID.4, ordered as a 2021 model.) For the most part, these supply chain issues have eased.
- Demand issue - Gas prices went up fast and ended up higher than recent history. Tesla had made EVs a popular choice. Traditional car manufactures entered the market and many people bought EVs to get away from gas. Now that gas prices are much more reasonable, less people feel the need to buy an EV. (Bonus, some people who bought an EV are realizing their lifestyle doesn’t suit an EV so they are going back to an ICE or PHEV)
- Tax rebates - Tax rebates, especially federal, were much easier to get a couple of years ago, so dealers could charge MSRP+ and buyers could still get a reasonable after rebate price. Now, the rebate requirements are harder to meet, so dealers are having to be more aggressive.
In Massachusetts, an ID.4 has $11,000 in tax credits. The vehicle will immediately lose that amount in value, since new cars are available to anyone who wants it.
That means deprecation starts from there, so they didn’t lose $20,000 they lose $9,000 which is a lot less weird
Actually, can’t you get the Massachusetts specific state tax rebate on any electric car, whether it’s new or used?
https://mor-ev.org/eligibility
Yes, but the used program has additional income restrictions that does not apply to the new program.
So your mate buys a car, he gets tax credit.
You buy it from him, you get tax credit.
Your mate buys it back, he gets another tax credit.
Repeat as needed.It seems you’d have to give back your tax credit when selling for that to work.
If you read the fine print you are supposed to keep the car for 36 months. I bought in 2021 and am coming up on 3 years of ownership in March. I have emailed mor-ev multiple times and they have told me different stories when I asked about claiming additional credits before the 36 months pass.
The first time they told me they were understaffed and to just submit another claim for the credit if I bought a new car and to not worry about the 36 month requirement, because no one is checking it.
The second time they told me you are only eligible for the credit every 36 months.
I guess you’d have to roll the dice and see lol
Not everyone qualifies for the $7500, so there are buyers who would buy above that.
Partly why I leased my Model 3 in Feb- it was $45k new and now that is down to $36k, plus the $11k in incentives.
Throw in interest, lost opportunity cost on the down payment, it’ll end up being a wash after 36 months.
EVs aren’t it moment. No one wants them anymore and even less people are willing to buy a used one.
Nonsense
My first EV was new, my second EV will likely be used. It’s great to see the used market come back to life.
More like come down to earth .
The only thing with used EV is MAKE SURE it has low miles. You don’t know how the battery was charged. If it has low enough miles, there shouldn’t be any major degradation.
That is a good point. When I rented an EV when I was in LA last month I charged it to 100% both nights at the hotel. The first day was for a lot of driving around. The second was so I could get to the Rental car with 80%. I wouldn’t have charged like that with my personal car.
Scary part is that low miles may not mean anything. Just looking through owner groups and such there’s a not insignificant group that just charges to 100% all the time, and you very well could have a low mileage car that’s just been at 100% all the damn time because it could be.
things will get interesting once we can have fairly reliable EVs with 250-300mi range for sane prices.
Everyone is waiting for the ‘24s with an updated (read: less buggy) infotainment system.
Honestly, I don’t think the entertainment system of the 2023 ID.4 is so bad that I’d wait with a purchase because of it. I use Apple CarPlay most of the time anyway, and it is a pretty smooth experience. Unless you are in an area with seriously crappy cell connectivity, but that is not on VW.
The more efficient powertrain of the new models, on the other hand, might be worth it to some people.
I owned the Id4 for a year and I do think it is so bad. It and a few other things with the car have turned me away from VW forever. Most of the features simply didn’t work (scheduled charge, motion activated trunk, approach vehicle key detection unlock, etc)
Hmm, I haven’t tried the scheduled charging, yet, but everything else in your list works pretty well. The motion activated rear gate did at times take a bit of foot wiggling, but it works well enough to be quite useful (Motion activated closing, on the other hand…). Key proximity to unlock works so well that at times I am wondering if I actually locked the car when I left. I have the most current software (3.5?) from this fall. Maybe that fixed some of the problems you experienced?
That will ship and then everyone will be waiting for the '26s with the updated less buggy infotainment system.