From the moment they are driven off dealer lot to the moment they are sold on, new cars slowly depreciate in value. While the largest depreciation will occur in the first few months of ownership, the rate at which a particular model depreciates depends on a whole slew of outside influences, from the cost of fuel to the weather, new car availability, and weather.
Between May 1 and June 1, Nissan’s all-electric LEAF hatchback was the fastest-depreciating used car in the U.S., despite rising gasoline prices. This prompted some outlets like Kicking Tires to wonder out loud if this was indicative of low demand for plug-in cars. Here at Transport Evolved however, we think we know why the Nissan LEAF and other first-generation cars like the Chevrolet Volt are falling dramatically.
What’s more, we think it’s a good sign.
According to data provided by Kicking Tires, the average used price for the Nissan LEAF fell by $819 at the start of June, a total percentage drop of 4.2 per cent compared to the previous month. This means on average that a used, late model Nissan LEAF is retailing for $18,692.
In terms of percentage change, that’s the biggest depreciation of any used car last month, but it’s worth noting that it isn’t the largest monetary change. That award goes to the LandRover Range Rover, which Kicking Tires said dropped its value on average by $2,458 during the same period, a percentage change of 3.6 per cent.
Without any context, the Nissan LEAF’s depreciation could be misunderstood as a bad sign for the electric car industry. But compare it to the facts below, and you’ll see it’s not a bad piece of news at all.
Firstly, sales of the Nissan LEAF hit an all-time record during the month of May, cracking the 3,000 milestone mark — 3,117 cars — making it the first automaker to sell 3,000 all-electric cars in a month.
While not all of those sales will have come from existing LEAF owners, it’s likely a sizeable number of existing LEAF owners traded in their older LEAFs for newer models, increasing the number of used LEAFs on the market. At the same time, many shoppers who would traditionally opt for a used car were enticed into new LEAFs thanks to favorable lease schemes and special offers — not to mention the better specifications and range of 2014 model year cars compared to used 2010-2012 model year LEAFs. Add
These two factors not only increase the number of used cars on the market, but also decreases the number of used LEAF buyers at the same time. This double-whammy of increased supply and reduced demand will always do just one thing: drop prices.
Second, May 2014 marked the start of BMW i3 deliveries across the U.S. Like owners trading in their first LEAF for a newer LEAF, we’re suspecting at least some of the used LEAFs on sale last month were a consequence of customers collecting their second electric car and selling their first.
Finally, because automakers traditionally release new model years in the period between July and September, many dealers start dropping the price on outgoing model years towards the summer in an attempt to clear their inventory ahead of the new model year’s arrival. As a consequence, incentives on new cars increase, discouraging buyers from buying used.
How you can benefit
Of course, with used Nissan LEAF prices dropping so much over the past month, there’s never been a better time to find yourself behind the wheel of a used Nissan LEAF.
As with any used car purchase, you’ll want to make sure the car you’re looking at has a full service history, has been well-looked after, and that it has been given all the appropriate recalls issued by Nissan for its model year.
You’ll also want to take it out for a test drive to check its range under normal conditions. If possible, try to persuade the seller to let you have an extended test-drive of at least 30 miles, so you can see how the car’s range and ‘guessometer’ reacts to your driving style.
In addition, you’ll want to make sure the battery pack is in good condition. Any Nissan dealer should be able to provide you with a battery report –either for free or a small fee — to give you an idea of how healthy the car’s battery pack is.
If you’re more inclined to check yourself, using something like the excellent LEAFSpy app for Android smartphones paired with a bluetooth ODBII Scanner should give you everything you need to check battery health. In addition to checking the current capacity of the battery pack, you’ll be able to see how much of the pack’s original capacity remains, plus see how many times it has been rapid charged.
Finally, don’t be afraid to haggle on price. With used LEAF prices dropping, your seller should be willing to negotiate a price that you’re both happy with, even if it’s not what they’d originally advertised the car at.
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