NADA: Prices of Used Plug-in Electric Vehicles to Drop 30% in 2013

McLEAN, Va., June 19, 2013 /PRNewswire-USNewswire/ -- Values for used plug-in electric vehicles are expected to decline nearly 30% this year—the highest depreciation out of all vehicle segments, according to the NADA Used Car Guide in its latest report, Plug-in Electric Vehicles: Market Analysis and Used Price Forecast.

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"The steep rate of depreciation for used plug-in electric vehicles can be attributed to limited range, manufacturer incentives and federal tax credits intended to offset the higher prices of new plug-in electric vehicles," said Jonathan Banks, executive automotive analyst for the NADA Used Car Guide.

"Generous tax credits can certainly promote more new sales than would have been achieved otherwise, but they also have a negative impact on future resale values for one basic reason — few consumers are willing to purchase a credit-ineligible, used plug-in electric vehicle for more than they would pay for a new one, less the federal tax credit," Banks added. "So at a minimum, late-model used plug-in electric vehicle prices must logically max out below the manufacturer's suggested retail price minus the credit."

For example, in the May 2012 edition of the NADA Official Used Car Guide, average trade-in values for the 2011 Chevrolet Volt and Nissan Leaf were $31,060 and $24,857, respectively. In May 2013, values for the Volt and Leaf had fallen by a combined average of nearly $10,000, to $21,235 and $14,792, respectively. As a percentage of MSRP, the Volt retained only 49% of its value and the Leaf retained 42%.

By comparison, average trade-in values for a 2011 Toyota Prius hybrid fell by $4,735, to $16,490 over the same period, while values for a 2011 Chevrolet Cruze with a four-cylinder gasoline engine dropped by $2,548, to $11,602, placing retained values at 63% and 62%, respectively.

Considering the limited range of plug-in electric vehicles – coupled with substantial incentives, tax credits and moderating gasoline prices – NADA estimates the annual rate of depreciation for used plug-in electric vehicles will improve little over the next two years, with annual losses going from 31.5% in 2012 to 29.7% in 2013 and 27.4% in 2014.

In terms of U.S. dollars, a plug-in electric vehicle worth $20,000 in 2012 is predicted to lose $9,792 of its value by the end of 2014, while similarly priced gasoline and hybrid vehicles over the same period are expected to lose $5,573 and $6,455, respectively.

Click here for the report, Plug-in Electric Vehicles: Market Analysis and Used Price Forecast.

About the NADA Used Car Guide

Over an 80-year history, NADA Used Car Guide has earned its reputation as the leading provider of market-reflective vehicle valuation products, services and information to businesses throughout the U.S. and worldwide. NADA's editorial team collects and analyzes more than 1 million combined wholesale and retail automotive-related transaction prices per month. Its guidebooks, auction data, analysis and data solutions offer automotive, financial, insurance and government professionals the timely information and reliable solutions they need to make better business decisions. For more information, visit www.nada.com/b2b.

The NADA Story

NADA has been the voice of the dealer since 1917. That's when 30 auto dealers traveled to the nation's capital to convince Congress not to impose a luxury tax on the automobile. They successfully argued that the automobile is a necessity of American life, not a luxury. From that experience was born the National Automobile Dealers Association. Today, NADA represents nearly 16,000 new-car and -truck dealerships with more than 32,000 franchises, both domestic and international. For more information, visit www.nada.org.

SOURCE NADA Used Car Guide