While gas-powered used cars are holding their own, it’s not a great time for EV owners.
When you shell out thousands of dollars a year for your new smartphone and your new laptop, there’s a near-zero chance you’ll see most of that cash back on the other end when you decide to trade up or sell. That sort of picture seems to be shaking out for used electric cars as well, as their values are cratering by double digits, according to a new iSeeCars study. In fact, while gas cars dropped by an average of 4.4$ last month compared to the same period in 2023, EVs dropped by up to 25% with one of the most popular models leading the way — the Tesla Model 3.
To determine these numbers, iSeeCars’ methodology involves analyzing 1.6 million 1-to-5-year-old used car sales between August 2023 and August 2024. It’s worth noting these numbers are the listing prices for each car model, or the prices dealers are asking customers to pay for certain models (not necessarily what they actually sell for). The study excludes heavy-duty vehicles (i.e. commercial trucks), low-volume vehicles or models that were discontinued during the 2023 model year, or vehicles in production fewer than four of the past five years, so those outliers don’t unduly skew the data.
The study lists the 15 cars with the biggest year-over-year price drops by August 2024. Not all the largest drops by model were electric vehicles, though those models did dominate the top half of the list:
Bad resale value = great buying opportunity?
As much as all cars among the top 15 on that list have fallen in value, it’s not all bad news, as the research firm’s analyses yield a few different observations. Some good news for current owners out of this study is that EV prices, while falling dramatically, didn’t drop quite as much in August as they did in prior months. In fact, year-over-year differences throughout 2023 and 2024 were greater (July 2024, for example, saw EV prices drop 28.6% versus July 2023, rather than the 24.7% drop in August versus the previous year).
Still, early adopters are feeling the pinch, particularly with the Tesla Model 3. Part of the rapid depreciation boils down to plentiful supply, as well as softening demand. At this point, EV adoption is still growing, but with one major wave of buyers already in electric vehicles, the more fickle mainstream isn’t willing to pay top-dollar for the privilege, and is willing to wait for EVs to reach parity with gas vehicles (or even drop below them) before they pull the trigger.
On that basis, the current state of affairs could bode well if you’re looking for a deal on a used EV. As iSeeCars executive analyst Karl Brauer points out: “Used electric cars have dropped from an average of 55.3 days in September 2023 to 38.6 days in how long they take to sell. This is a bigger drop than gaosline or hybrid cars, with all three vehicle types now taking the same time to sell on average. This indicates solid demand for used EVs — if they are priced 8 to 11 percent below hybrid and gasoline vehicles.”
Gasoline car prices, by and large, have been holding steady, dropping by 4-6% year-over-year when looking at individual months’ sales. Then, from month-to-month throughout 2024, gas cars have been ping-ponging up and down by a few hundred dollars, on average.
We could see a similar story emerge for EVs down the line. Strong demand and steady supply for gas vehicles and hybrids mean relatively stable pricing, while EVs have been inordinately expensive for years. Presently, the demand for EVs is still there, but higher supply relative to that demand is causing sellers to unload their inventory at much lower prices. (That’s what you get when Tesla drops new vehicle prices and companies like Hertz flood the second-hand market with thousands of used Model 3s, for example).
EV prices will likely continue to drop at a steady clip over the coming months, but it will be interesting to see whether the used market self-corrects in 2025, or whether strong hybrid and gas-powered car demand will keep buyers from moving toward EVs for some time to come./
It’s not just EVs, either
But say you don’t want an electric vehicle at all, no matter the price. The bottom half of iSeeCars‘ top 15 highest depreciators compared to August 2023 shows some better deals with used Land Rovers, BMW X7s and X2s, the performance-minded Mercedes-AMG GT and even the Ram 1500 Classic truck. Land Rover’s SUVs, for their part, are down 15% in terms of listing prices compared to where they were at this point last year — three times the industry average.
