Big-selling electric models are among the most depreciating used cars
By Paul Homewood
h/t Ian Magness
If there’s one thing most buyers of nearly-new cars want to know, it’s what that car is going to be worth when they sell it on.
After all, a far greater proportion of used cars are bought using cash or personal loans, rather than PCP finance – and that means the amount for which they can be traded in has a much greater impact on buyers’ wallets.
So new data about to be released by CarGurus, one of Britain’s leading used car classifieds websites, which charts the most depreciating used cars, is sure to be of interest.
To work out its ranking, CarGurus calculated the average price drop of cars for sale on its platform over the past year.
Models from 2013 onwards with fewer than 100 adverts were not included, which counted out many specialist or enthusiast marques, as well as newer models whose steeper depreciation curves would have skewed the data.
The results reveal that the model that’s depreciated most over the course of the last year is the Kia Proceed, with a 39 per cent drop in values since last year.
That’s a bit of a surprise given Kia’s lengthy seven-year warranty, which usually means its models are pretty good at holding their value. However, the Proceed’s low profile and unconventional body style may mean many used buyers aren’t really sure what to make of it.
In second place is the more recognisable Tesla Model 3. It heads a trio of popular, high-value electric cars whose values have reduced by between 26 and 29 per cent since last year. A fourth EV, the Renault Zoe, also features in the top 10.
The results suggest used buyers’ enthusiasm for battery-powered cars is on the wane, which is likely due to concerns about battery life and range degradation.
https://www.telegraph.co.uk/cars/hybrid-electric-cars/the-most-depreciating-used-car-models/
There can be little surprise here. Until now the scarcity of second hand EVs has helped to keep second hand prices relatively high.
Their intrinsic value, however, has always been dubious, given the problems with battery life. Who would want to buy a three year old EV with 60,000 miles on the clock, when it will be effectively worthless on a few years time?
Comments are closed.
NOT A LOT OF PEOPLE KNOW THAT 
The Tesla new price slashes have seriously affected their second hand prices and hence those of their chief competitors. That alone probably accounts for most of the depreciation.
Of course second hand EV prices will ultimately just drop to a level where price and circumstances get punters biting. Eventually, if you want a newish second hand car, you will have no other choice.
Or we could start lynching greens.
The whole idea of the Global Warming / Climate Change scam is to destroy the economies of Western countries .https://www.investors.com/politics/editorials/climate-change-scare-tool-to-destroy-capitalism/
Which is why they are trying to force everybody to buy EVs . They are always going to cost a lot more than ICE vehicles and by putting up Carbon taxes and making running costs a lot higher the public will be forced to spend a lot more money .
The Carbon taxes have also been the main reason for the rise in the cost of living .
So nobody should expect the cost to come down , EVs will always cost a lot more , electric costs will continue to rise , and the green loonies will keep at it until enough people do something about it .
Grant Shapps, who regretfully is in charge of our Energy Security (and Net Zero ….) and was equally regretfully Secretary of State for Transport in his previous job, showing a lamentable lack of knowledge of Electric Vehicles, delivered a speech today on opportunities for the UK in Carbon Capture and Storage, which apparently is going to cost us the Tax Payer £20 Billion, and help to solve our Energy Security problems.
The speech seems to be somewhat deluded and sounds like it was addessing Primary School Children .. Sample text:
“Deep below the North Sea floor, we have numerous and vast storage reservoirs. To give some idea about the potential, I can explain that
the UK Continental Shelf could have enough capacity to store about 78 billion tonnes of carbon. Now if you’re like me, that doesn’t
necessarily mean very much, so I challenged my officials to tell me what that will be in, sort of, real money. And my officials tell me that
broadly, that’s the equivalent to the weight of about fifteen billion elephants…..”.
Link to his speech. https://www.gov.uk/government/speeches/uk-opportunities-in-carbon-capture-spectator-energy-summit?utm_medium=email&utm_campaign=govuk-notifications-topic&utm_source=81a19cf1-9cb2-46b5-b876-237699ca5ec6&utm_content=daily
I am hoping that some of you who are better qualified than me, can either tell us what the benefits will be for the UK with this gigantic
expenditure, or alternatively, pick some big holes in it so that we can ask some intelligent questions of our masters.
Carbon capture is bullshit, but it may allow fossil fuels to continue a bit longer, promise billions on carbon capture and head the stop oil green loonies off. You know it makes sense. MAYBE!
The tropical oceans do this for free.
Actually it’s the cooler waters where CO2 is absorbed.
Anybody see the purported surprise extra volcano discoveries this week?
Seemingly an embarrassment for the ocean and atmospheric chemistry crew?
So he (or the officials) must be thinking about somewhere to bury White elephants?
So ‘real money’ is an elephant, is it?
My first book on economics said that one of the requirements of money was portability! A second was keeping its value through time. A third was being hard to reproduce. Oh well, one out of three then.
I am sure Shapps knows about bodies, he obviously only gets his job appointments because he knows where they are buried………
I think CCS is more of a pink elephant. If any gets built, it will immediately turn white.
IIRC 1ppm of CO2 in the atmosphere is equivalent to 6-7 GIGA tons. 78Billion tons will hardly make a dent in the levels currently in the atmosphere. They’d be better off spending that money hunting the Snark!!
If I asked any employee over the age of 18 what 75 Billion tonnes of CO2 storage was “in real money” and they answered “about 15 Billion elephants”, I would be certain that they were either demented or taking the piss.
Either way they would be clearing their desk and departing immediately.
If Shapps is so totally gormless as to not only accept that answer but to think it clever to repeat, he should be in a damp dungeon in the Tower.
Simple, for a business owner there is tax benefit in kind for an electric car, so the senior managers get a tesla, audi, mercedes and the minions get kias and nissans tax free, after 2 years they go on the open market…no tax relief and battery uncertainty so the price bombs. The second hand market for battery cars does not exist, it is not going to work.
There is no market for used batteries!
The metals must be recyclable but at what cost? Probably around £9,500/battery so each used battery is worth a tenner. That might improve over time, particularly if commodity prices rise but its always expensive to recycle.
Given the range problems and lack of normal size vehicles, why would anyone even think about buying a new EV let alone a secondhand one?
No to low BIK, no VED for year 1 or subsequently. No fuel duty to pay, and only 5% VAT if you charge at home. You also get the green square on your number plate to show how virtuous you are. Plus, they are probably great fun to drive. See my sums at https://cliscep.com/2023/01/08/on-the-soaring-demand-for-evs/
…where I notice that I said…
Since once you hand back the car after the lease and get a shiny new one, you have to find a mug who will buy it off the forecourt.
I doubt if that seven-year warranty covers immolation. I have owned two Prius’ that were both totaled by what I would call minor RAD. No body wants to be responsible for an EV that has been demonstrably damaged by a road accident.
If lightly damaged BEVs and Hybrids are written off because of fears about battery fires what happens to them?
People make a living by repairing lightly damaged insurance written off ICE vehicles, is there going to be an equivalent for cars with batteries with the potential dangers involved? I daren’t think about a “cut and shut” BEV.
‘The results suggest used buyers’ enthusiasm for battery-powered cars is on the wane, which is likely due to concerns about battery life and range degradation.’
These concerns have always existed.
I had to renew the insurance for my 5/6 year old petrol vehicle last month. In getting quotes I had to get a current replacement value, according to We Buy Any Car it will require more £ notes than last year, and it was the same last year. I got it as a three year old.
This has never happened to me before, even in previous periods of high inflation.
Just ask the EV owners why they are willing to support modern day CHILD SLAVERY in the cobalt mines of D R Congo, so they can appear virtuous with their battery cars.
Another thing to look at is mileage – how many were clearly ‘second cars to the mauve Disco ?
‘Massive’ Disco
‘Massive’ Disco
The Bias Broadcasting Clan reported on Radio 4’s Today programme that :-
a) Only the Prime Minister can sack BBC Chairman Simon Sharp (a previous banker and work colleague of Sunack’s), thus demonstrating how political and clannish this organisation is.
b) Around 7.15 reported that the larger providers are attempting to double the number of on-street chargers for battery vehicles.
The report neglected to say if they would work, be maintained or most importantly – where all the additional electricity would be coming from let alone what the charging cost will be.
Diabolic news reporting with out any analysis. Just politics read from a script some might say.
So it’s speculation versus wishful sinking?
I sent off an e-mail to my MP about the CfD scam and received this reply.
“I am aware that some generators have been using flexibility in their contracts – intended to deal with unforeseen delays to generation, such as hold-ups during the construction or commissioning phase – to delay the start of their CfDs in order to benefit from higher revenues while generating on market terms. As you may know, the Government has now made changes to the contract for the next allocation round so that for future contracts generators should not be able to use delays to the start date of their CfDs to increase electricity generation revenue before starting the CfD contract. I will continue to monitor this issue.
In the meantime, I do not believe it is right for energy companies to be making enormous profits on the back of the energy crisis. That is why I have supported calls for a windfall tax on oil and gas producers since January last year, as well as on electricity generators making excessive profits. As you will know, the Government eventually accepted the principle of a windfall tax and has now introduced a 45% charge for renewable generators on revenues from the sale of electricity for more than £75 per megawatt hour.
More widely, I believe it is important to recognise that the current crisis is a fossil fuel crisis. We are in this situation because the price of gas has jumped and this effectively sets the wholesale price for electricity overall, even when we can generate it at a much lower cost, as we can with renewables such as offshore wind. Indeed, even the UK’s older, more expensive offshore windfarms delivered power more cheaply than gas last year, paying back hundreds of millions of pounds through their CfD agreements as a result.
That is why I support calls for the Government to speed up efforts to decouple the price of electricity from that of gas. This would stop renewable generators from making excess profits due to high gas prices and allow consumers to enjoy the benefits as we increase the amount of cheap, homegrown, clean renewable energy we have available to us.”
I am unaware of massive paybacks from renewables under their CfD agreements. I am composing my reply so if anybody wants to comment on the letter go right ahead.
Some comments you could make:
Congratulate him/her on having a better appreciation than most MPs appear to of the issues.
Feel free to use this chart to support further comments (download and paste into your email):
Over the past financial year (April 22-March 23) CFD holders have repaid just £11.7m net according to LCCC data. With the big jump in CFD index prices at the beginning of April, consumers can once again expect to be paying substantial sums to generators. The average CFD strike price in payment is ~£175/MWh, substantially above the point at which the Generator Levy applies and above market prices – but CFD generators are exempt from the levy. Renewables subsidised by ROCs earn a premium (over £200/MWh in the case of floating wind and tidal) to market prices via the ROCs which is not subject to Generator Levy. It would have made more sense to cut the subsidies than to impose another tax.
The result is that the prices consumers are paying for renewables exceed what is being paid for gas and nuclear generation, despite those prices being boosted some £25-30/MWh by UKA carbon taxes that are a protectionist levy. The higher prices for gas emerged during the economic rebound after covid lockdowns as a result of ESG policies that have limited new development in the West.
In recent years the UK has been self-sufficient for gas in summer months, at worst needing a small top-up of Norwegian pipeline gas. Exposure to import LNG prices has only really applied in winter. Efforts to block development of our own resources, including the Energy Profits Levy on oil and gas companies that is seeing them abandoning projects in the UK mean that we will soon be exposed to LNG import prices year round, which will be bad for the balance of payments and for consumer prices. If we want to see lower prices there needs to be increased gas supply, preferably from our own resources – which means cancelling the windfall tax and encouraging investment. Investment in overseas projects would also help to lower gas prices, but the benefit of not having to import from distant sources would be significant and offer better security of supply.
The wind industry has been signalling for some while that it is not able to invest profitably at the maximum administrative strike price for AR5 (£44/MWh in 2012 money, or about £60/MWh indexed to current levels): the cheapest offshore wind CFD in payment is £108/MWh. It seems likely that there will be little interest in taking up CFDs on terms that exclude the option of market prices (which are boosted by carbon taxes by £25-30/MWh) and offer no compensation for curtailment, with wind turbine manufacturers racking up heavy losses as the cost of materials has risen and need to increase prices. DESNZ seems to have decided to explore back door routes to increasing subsidies in its latest consultation. The problem is now becoming that there will be a delay to investment across wind, oil and gas, and in backup generation and additional network capacity while they work out that present policy is a failure. That will increase the risk of blackouts and shortages.
It doesn’t add up, thank you for that. It is a much better collection of information than my feeble efforts so, if you don’t mind, I’ll use parts or all of it when I reply to my MP. Judging by the reply, and knowing the limitations of her, her reply was at least partly supplied by another party. She did, however, reply in some detail to my e-mail so some credit it due.
Where did the chart come from? Do you have a link?
I made the chart myself from the data from the Low Carbon Contracts Company downloaded here
https://www.lowcarboncontracts.uk/data-portal/dataset/actual-cfd-generation-and-avoided-ghg-emissions
You need a good spreadsheet programme and familiarity with pivot tables to help summarise the data which gives daily detail per CFD.
Your MP is clearly deluded.
The energy crisis is absolutely not “a fossil fuel crisis”.
It is a “lack of fossil fuel crisis” entirely due to the Government’s preposterous energy policies in attempting to use generators that don’t effectively work, as a solution to a problem that doesn’t really exist.
Encouraging the permanent closure of the coal mining industry, blowing up power stations, inadequate gas storage and banning private industry from Fracking on absolutely spurious grounds. All (and many other ridiculous policies) are entirely to blame for our predicament and for the brief spike in gas prices.
Thank you Martin. You make valid points about the Government’s energy policy. I use the term loosely here. Unfortunately there was support to some degree from all opposition parties in their hunt for NZ so we are headed for disaster at some point.
Mad Mike.
I note in York Central there is a “Guy Fawkes” candidate. Living in York Outer, there are only the four Tory / Lab / LibDim (all “In Name Only”) plus the Greens, whom the other three all seem to love and trust.
So four legs of the same malevolent, incompetent donkey.
If I still lived in “Central”, I’d just check that Guy Fawkes wasn’t actually BuF of whatever; if not Mr. Fawkes would get my vote, saving me the effort of spoiling the ballot.
Meanwhile the TUV report a lot of test failures for battery cars on brakes which is no surprise given their increased weight. They are also reporting a lot of suspension and axle problems.
You Tuber “Geoff Buys Cars” put out a couple of videos recently giving quite a bit of detail about depreciation of ICE vs EV cars, and also mentions that dealers just don’t want to take used EV’s in part exchange:
Interesting point. I hadn’t thought of what happens when a Tesla owner wants to trade for a Ford (ICE). Yeah, it’s likely the Ford dealer doesn’t want it.
I heard some time ago that 80% of EV owners are not repeat buyers.
Ford was decorated by German National Socialists. Surely that’s worth something to Econazis, no?
I have one family member and one friend running fully EV’s. (Tesla and Jag’ I-Pace) Both are in business and get BiK tax breaks. Both have also admitted that without BiK they wouldn’t even look at EV’s.
One recently had to drive to Scotland which his Jaguar I-Pace wasn’t fit for, so he took his FiL’s Overfinch Range Rover!
If it doesn’t already exist, I expect the second hand EV market will be supported with a stand alone battery insurance product. It would probably be quite profitable for the providers because the fear of severe battery failure is probably greater than reality on relatively young cars.
I was talking with an actuary the other day, and he said it’s possible the opposite will happen: insurance companies will sell auto policies with battery exclusions. So a stand alone battery policy could become required! Should you buy an EV on credit, the lender will demand you have it fully insured for their protection.
Hypothetical. For now.
I’m talking about a breakdown warranty.
When you buy a second hand car in the UK you are often given an option to buy one (in addition to statutory rights). Existing products would already exclude battery packs because they have a cap on the value of repairs that can be claimed for.
I bought a used car that came with a 3 months warranty and when it expired there was the option to extend it.
Then competition will undercut those trying to charge more than they should.
Afaik, virtually all EVs come with a long battery warranty: 8 years or even 10 or 100k miles.
The Tesla S has been around for over 10 years now and, if there have been battery issues, they’ve not received much coverage.
I’d disagree with the first sentence.
It’s the price of the car when I buy it, that matters.
I’ll be running it until it costs more to get it through its MOT, than it’s worth.
That, I’d suggest, is the nature of the second hand market.
My Golf cost £11k, new one costs £29k.
50k on the clock, the one it replaced had 140k, I think.
I’ll run it until it drops.
I think it means for a new car buyer who keeps it for 2-3 years. Knowing on-sale value is important then. The second hand market is affordability. I have £7,000 to spend, what can I get? EVs massively depreciate because of that. They are more expensive than the equivalent ICE but in the second-hand market, they largely have to sell for the same amount – second-hand buyers won’t pay a premium for an EV and aren’t getting subsidised to do so. So if the EV and ICE equivalent started at say £35,000 and £28,000 new, both will go for £15,000 second hand.
Agreed, Adam. First sentence is ridiculous.
When people get married, they aren’t thinking about what it’s going to be like in 20 years.
“What’s this car going to be worth in 5 years?,” asked no car buyer ever.
This is true of anything. If new an item can command a premium (or is subsidied) but second-hand it cannot (and isn’t subsidised), it will depreciate more than its equivalent. I believe iPhones depreciate more than Samsungs because the premium in the second-hand market fir an iPhone is far lower than in the primary market. That many seem surprised that most people aren’t willing to pay a premium for something that is at best no better than the alternatives speaks to their inability to understand markets.