Hybrid, EV resale value isn't too far off from conventional vehicles
Autoweek checks resale prices on the Nissan Leaf and Chevy Volt.
When it comes to EVs and hybrids, resale value may not be on par with conventional ones, but it isn't too far behind.
In their November/December residual-value analysis, automotive-industry analyst ALG said that the resale value of the all-electric 2012 Nissan Leaf is 34 percent of its new-car list price after four years of ownership, and the Leaf's conventional counterpart, the 2012 Nissan Sentra, is at 40 percent.
It turns out that aspects of electric or hybrid vehicles such as battery life and maintenance costs, don't play much of a role in resale.
ALG doesn't consider battery life when forecasting resale values because so far there have been no widespread issues of batteries failing, even in the first-generation Toyota Prius and Honda Insight hybrids.
“Given the improvements in battery technology, ALG does not expect battery life to be an impactful issue on vehicle value,” said Eric Lyman, vice president of partner development and editorial for ALG.
Lyman said maintenance cost doesn't directly play a part in determining residual value either, but it can drive perception of quality, which he says has a big impact on resale.
“A brand like Jaguar is a good example -- [Jaguars have] a long-term history of high maintenance costs, even though recent quality metrics show their vehicles performing well,” he said. “That will impact perception of quality and the resale values in the used market.”
Lyman said the biggest obstacle to widespread adoption of electric-powered vehicle technology is price point and infrastructure.
"Based on ALG's primary research with consumers, the most common roadblock to considering the purchase of an EV are sticker shock and range anxiety," he said.
Lyman said what really impacts resale value is likely to change: incentives.
When calculating residual value, ALG does not include federal, state or automaker incentives. Currently certain EVs and plug-in hybrids purchased in or after 2010 are eligible for a federal income-tax credit of up to $7,500. The amount varies based on the vehicle's battery capacity, but both the Leaf and Volt qualify for the full credit.
He said today the gross MSRP for the Volt is about $42,500 (or $35,000 with the federal tax credit.) If the MSRP holds flat and no other incentives are put on the car, there could be a big jump in prices on the new car, which could positively impact used-car prices as well.
There's a catch, though.
“If Chevrolet creates their own incentives to backfill the federal tax credit, net cost remains the same, but now the automaker is providing their own factory incentives, which may have a different impact on brand perception than a federally sponsored incentive,” he said.
ALG says this is truly a big unknown when forecasting these alternative-fuel vehicles.
But for now, owners who pay the premium to go green won't see a significant loss on resale.
Model ---- MSRP ---- value after 36 months ---- value after 48 months
2013 Chevrolet Malibu 2LT ---- $27,175 ---- $13,000/47 percent ---- $10,675/39 percent
2013 Chevrolet Volt hatchback ---- $42,580 ---- $17,675/41 percent ---- $14,750/34 percent
2012 Nissan Sentra 2.0S CVT ---- $19,300 ---- $9,425/48 percent ---- $7,875/40 percent
2012 Nissan Leaf SL ---- $38,100 ---- $15,825/42 percent ---- $12,875/34 percent
I imagine these numbers are wrong. Think about how many people have said they would buy a Volt if it was less expensive. After 4 years if you can buy a Volt with 48,000 miles on it for $18,000 and never have to put gas in your gar again you would be much better off over a $10,675 Malibu 2LT.
If the $15,000 more expensive Volt is only $4,000 more after 4 years they will be flying off used car lots which will raise their value considerably. At $14,750 I would finance 2 of them in a heartbeat.
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