Research from iSeeCars.com shows used electric vehicles, or EVs, are driving higher used car prices with an overall increase of 54.3% in the segment. That’s significant for used car buyers because prices of traditional gas-powered used cars, SUVs, crossovers and pickups are leveling off.
Prices for used vehicles jumped dramatically in 2021 and the first half of 2022 because of the reduced supply of new vehicles due to a worldwide chip shortage. However, as the research shows, year-over-year gas powered vehicles were up 10.1%. While that’s significant, it’s not much above the inflation rate of 8.5%. In effect, the global chip shortage has added 1.6% to the cost of used gas-powered vehicles.
Where the price penalty really kicks in is used EVs. Higher fuel prices, a small inventory of used EVs, and the global chip shortage combined to make the used EV market frankly insane. In the short term, expect things to stay out of whack.
“Until recently, mainstream electric vehicles typically depreciated rapidly due to improvements in battery technology and a lack of demand in the secondary market,” said iSeeCars Executive Analyst Karl Brauer. “However, soaring gas prices, improvements in public charging infrastructure, and a lack of inventory for new EVs have led to soaring demand for used electric vehicles.” iSeeCars analyzed the prices of over 13.8 million 1-5 year old used cars sold between January and July of 2021 and 2022 to determine the price growth of electric cars compared to conventional fuel vehicles.
One quibble with Brauer’s comments would be improvements in the public charging infrastructure. Quantity does not equate to quality. Personal observations and anecdotal evidence from veteran observers (who are largely pro-electric vehicles) shows there are more chargers out there but reliability is a significant issue. It appears the charger industry is suffering from the same woes as most employers: a paucity of techs to keep the chargers running.
What’s the best way to fight higher fuel prices without paying higher prices for a used EV? Hybrid vehicles might be an alternative. While their prices are increasing more than used gas vehicles, they are well below the spikes in used EV prices.