A couple of weeks ago, I wrote an article “Do You Think Used EV Prices Will Drop By $4,000 In 3 Months?” and polled readers on how much you thought used electric car prices would drop after September 30 when the $4,000 used EV tax credit goes away — by $4,000, by $1,000–3,000, or not at all. Now it’s time to share the results.
The argument is that used EV prices are inflated due to the $4,000 you can get from the federal government when you buy one. Once that is gone, the idea is that used EV prices have to drop in order to find buyers. Is the market completely set and end cost what matters most in this market, meaning prices will drop by right around $4,000? Are buyers largely unaware of the $4,000 when shopping for a used electric car and prices will therefore not change much? Or is it somewhere in the middle and prices will drop by $1,000 to $3,000?
Of course, we can’t really answer this question, since there are various factors that influence used car prices. However, we can look at prices for cars the week or two before the subsidy ends and then look at them a week or two after the subsidy ends and see how they change, on cars with similar age, mileage, and features or even on specific individual cars. Either way, though, it’s important what people think right now about this matter. So, on to your responses….
Most of you (57%) came to the conclusion that prices would drop, but not by the full $4,000 amount. So, it would still presumably make more sense to buy a used EV before September 30 and get the full $4,000 off.
Another 33% don’t think we will get price cuts on used EVs at all, meaning that you should really buy a used EV before losing the $4,000 discount. Used electric cars will effectively cost $4,000 more starting in October according to this group.
On the flip side, 10% of voters believe that used EV prices will drop by $4,000 or so in October, meaning it won’t make much difference to buyers when they buy a used electric car. The federal government will just spend less money, and people selling their electric cars will take a big hit when it comes to depreciation and resale value (which would also certainly lead to some of those people holding out on buying a new EV and selling their existing one).
As I indicated, we will try to find a way to measure this. I hope more rigorous scientific research will also be conducted at one of the USA’s acclaimed universities as well, or some other research outfit. This has been the first used EV tax credit or rebate the country has had, so it will be interesting to find out what happens when it goes away. The results will help to tell us how useful the policy is. Though, again, even if prices drop by $4,000, making no real difference for used EV buyers, that would mean a significant hit to EV resale value, which would have a negative effect on the new-EV market….
