Electric vehicles do not retain their value as well as hybrid cars, according to a report by the Australian Automobile Dealers Association.
According to AADA's Midyear Automotive Insights Report, a two-year-old electric car is worth 22 percent less than its new price, and a two-year-old hybrid car is worth more than its original price.
The report found that most of the depreciation occurred in the first year of ownership. A one-year-old hybrid sold for 3.5 percent more than its original retail price, while an EV lost 17 percent. Depreciation is the biggest expense of car ownership.
As a result, the resale value of late-model used electric vehicles has fallen as major players in the electric vehicle market have been offering steep discounts.
According to the report, sales of used hybrid and electric vehicles are expected to surge by about 80% in the first half of 2024 due to increased supply.
AADA CEO James Botman said the figures reflect consumer concerns about electric vehicles.
“The growth of used hybrids and electric vehicles is a sign of changing consumer preferences, but the declining value of electric vehicles suggests there is still some hesitation in the market,” he said.
Overall, the report found that used car listings and sales increased significantly in the first half of the year.
In good news for used car buyers who have been forced to pay record prices since the pandemic, there were 1.21 million used vehicles listed for sale in the first half of 2024, up 25% from the same period last year.
The surge was largely driven by record-high new car sales, which are flowing into the used car market and increasing supply.
Voortman said the surge in inventory has pushed down used-car prices across all vehicle segments.
“The national weighted average ownership value of U.S. vehicles decreased 11.8%, with SUVs down 8.2% and passenger cars seeing the smallest decline at 5.9%.
“There is a clear trend towards improved supply of used cars, which is driving down prices and driving up sales,” he said.
Voortman said now is “a great time to buy a used car on the cheap.”
“I see the supply of used cars remaining healthy, which will put downward pressure on prices,” he said.
What's interesting is that there's a marked shift toward personal selling.
According to Saxon Odgers, AutoGrab's chief commercial officer, dealer registrations fell 7.5%, while private market share rose to 67.5% from 59.9% last year.
Private sellers also sell cars quickly, with an average time to sale 13 days faster than dealerships.
Dealer sales remain stable, with the average vehicle sales period remaining at 50 days.
Among the top players, Toyota leads the used car market with a market share of around 17%. The Ford Ranger remains the best-selling used car this year with 38,804 units sold, followed by the Toyota HiLux with 34,736 units sold.
