Electric Car Resale Values Are Higher Than You Think
Recently, USA Today commissioned automotive resale value authority, Kelley Blue Book, to do an analysis of projected resale values for electric and internal combustion engine (ICE) vehicles. The publication found that on pure terms, electrics like the Nissan LEAF, Chevy Spark EV, Fiat 500e and the Fiat 500e will lose considerably more value over five years than their non-electric counterparts. But there are several problems with the kinds of analysis that have plagued such comparisons since EVs re-emerged on the market three years ago.
The 2013 Nissan LEAF was projected to retain 15 percent of its value versus 36 percent for the 2013 Nissan Sentra. The Chevy Spark EV (pictured above) will retain 28 percent of its sticker price, compared to the gas-powered Spark, which will preserve 40 percent of its value. Of all the cars on the comparison list—internal combustion or electric—the three worst performing were the LEAF, the 500e, and the Smart ForTwo electric.
At face value, these results may not seem that surprising; after all, EVs generally have a higher sticker price and questions about long term battery life are yet to be answered by real world driving performance. But two key factors were overlooked.
Studies like these fail to properly account for federal and state tax incentives that total at least $7,500, and can be thousands more depending upon where you live. What happens when you adjust for these incentives? Resale value retention for the electrics in the USA Today comparison begin to get a lot closer to the cars they’re being compared to.
The 2013 Chevy Spark EV starts at $28,305 but after the federal credit the car costs just $20,805. The study says that the Spark EV will retain 28 percent of its value versus 40 percent for a gasoline-fueled Spark. But Spark EV buyers won’t actually be paying $28,800 for their car once they’ve collected their federal and state tax refunds. In fact, calculated from the after-credit price of the car, the Spark EV is actually projected to retain 38 percent of its sticker price—just 2 percent less than the standard Spark.
Cost of Ownership
One of the primary reasons that people buy an EV is that they’re attracted to the idea of not having to buy gasoline. EVs can save hundreds or even thousands of dollars in fueling costs compared to gas vehicles. For instance, according to FuelEconomy.gov the 2013 LEAF provides a savings of $4,750 compared to a 2013 Sentra.
Furthermore, EVs are projected to have low maintenance and repair costs compared to gas cars—perhaps several thousand dollars lower depending upon whom you ask.
Obviously, cost of ownership is a separate consideration from resale value, but the money you save while owning a vehicle is every bit as green as the money you will one day get when you resell it.
Article by Brad Berman, appearing courtesy ebay Green Driving.
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