Cheap used EVs

[CaminoRacer]

http://jalopnik.com/newish-electric-cars-are-coming-off-lease-and-oh-my-god-1790593342

"Second wave" electric cars– Fiat 500es, Cadillac ELRs and even Tesla Model Ss– are starting to return to dealerships after their first owners are done leasing them. Now apparently those dealerships are wholesaling these vehicles for, like, nothing.

First, a crash course in how dealerships trade stock and where leasing fits in–

Say it's 2016 and you lease a 2016 Honda Civic for three years. 2019 comes around, your lease is up and the dealership takes the car back.

If yours was an exceptionally clean and/or desirable-spec car, the dealer might stick it on their lot for a few weeks as certified pre-owned inventory. But it's more likely that they'll pack it up and ship it, along with all the other off-lease and trade-in cars they got that week, to a wholesale auction.

These auctions can only be accessed by other car dealers. They're the main source of inventory for basically every used car lot from decent independent outfits to sketchy buy-here pay-here dumps run by the mafia.

This is how the car you traded in to a well-respected franchise dealer like a Herb Chambers in the northeast or Galpin Auto in the southwest end up at some potholed "Bob's Auto Sales" lot in a dodgy neighborhood near the airport.

So in 2013, people leased fully-electric Fiat 500es for three years. 2016 has come around and dealerships are getting these cars back. See what's about to happen?

Based on this little data sample we were shown this week, those dealerships are wholesaling low-mileage used EVs at insanely discounted rates.

What you're looking at here is a screengrab from a wholesale auction listing website. Specifically from Manheim auctions, which is one of (if not the) largest wholesale automotive auction house in America. They host unfathomably large auctions of used cars in warehouses every day of the week all over the country.

When I worked as a supply chain manager at a small network of used car dealerships, I would pore over lists like this to try and identify trends and good deals. Then I'd go spend tens of thousands of dollars of borrowed money at Manheim events every week hoping I was right.

But you don't have to be a professional to see that the trend here is "insane depreciation."

A 500e is MSRP'd at around $30,000 now. Can't imagine it was much less in 2013. Now according to this list, these cars are selling for $4,500 with just around 12,000 miles-per-year. That's like an 80 percent value drop in three years of regular usage! Is an AMG car even that bad?

Of course you, the average consumer, do not have access to these prices unless, you know, you know a guy. You're going to have to pick one of these cars up from whatever bidder paid $5,000 for it at the auction and is now looking to make a profit. So what are these things selling for retail?

Looks like around $11,000, which still seems ridiculously cheap for a three-year-old vehicles with below-average miles. If the dealers in this small smattering of AutoTrader listings I found in my cursory research paid the same prices we're seeing in that Manheim screenshot, EVs are looking like god's gift to used car dealers. What I'm saying is– a 100 percent markup is a lot.

Wrenchman and auto writer (and apparent used car businessman) Bozi Tatarevic also shared screens of similar lists for a few other off-lease EVs. The Cadillac ELRs also appear to be trading at ridiculously reduced prices and yes, Tesla Model Ss too.

In the interest of full disclosure; let's acknowledge that this is a small sample. And of course, many fully electric vehicles including the Fiat 500e are only sold new and leased in a few states. And without seeing photos of the cars on these auction lists, who knows, maybe they were all in a fire or something.

But I think it's more likely that dealerships are just dumping these things into the secondhand marketplace, and the "used EV" industry is something you should be keeping your eye on as more of these come off-lease and into the wild.

I actually noticed this a week or two ago - lots of cheap Leafs, 500e's, etc. I figured it was because they're worthless after 3 years, but are they? Is a 30-40k mile EV a good deal?

[Gotta-Qik-C7]

I'd gamble on one! Not a Fiat but a Honda or the like!

[68_427]

The Volt is a good gamble.  There are tons of fleet cars out there with 100K miles but minimal hours on the battery since they were never charged just used as regular cars.  You may be able to score a Volt for ~10K with a practically new battery.

[Eye of the Tiger]

Budget for a new battery pack.

[Eye of the Tiger]

I wonder if any of those extended warranty companies will offer a battery pack plan.

[Soup DeVille]

Budget for a new battery pack.

What is the budget for that?

[Eye of the Tiger]

What is the budget for that?

At least $2000.

[RomanChariot]

I now have 3 co-workers who have Volts. It looks like a 3 year old Volt with 40,000 miles is going for around $14,000 in my area. All 3 of them charge their cars for free at a strip club near my work. The club has a large solar array and multiple EV charging stations. The club doesn't open until noon so the owner doesn't mind if they charge their cars there in the morning but they have to move them before noon.

[MX793]

The Volt is a good gamble.  There are tons of fleet cars out there with 100K miles but minimal hours on the battery since they were never charged just used as regular cars.  You may be able to score a Volt for ~10K with a practically new battery.

With the way the Volt's hybrid system is set up, the battery gets charged directly from the gas engine.  Those batteries have seen some charge cycles.

[ChrisV]

With the way the Volt's hybrid system is set up, the battery gets charged directly from the gas engine.  Those batteries have seen some charge cycles.

Only on 2011 and 2012 cars and ONLY if the battery gets down below 20% charge, and even then they only MAINTAIN that charge until it's plugged in and recharged. So no, they haven't seen more than daily charging cycles (and they only charge to 80% to keep the battery in it's peak range). Lithium ion batteries have problems if dropped to 0 charge and then charged to 100%. By keeping the Volt's battery (and the Spark EV and Bolt EV) to that 20-80% range, the battery life is extended almost indefinitely.

[mzziaz]

I'd so rock an ELR

[MrH]

Now I'm looking into ELRs...

That was my baby at work for a long time.  I had a huge hand in the instrument panel, door panels, and center console.  I would love to own one just because it's special to me, even though it sold like shit

[Laconian]

ELRs are so awful. Compromised in so many ways.

[mzziaz]

Meh, its a more stylish volt - which is a pretty good platform to begin with!

[Soup DeVille]

ELRs are so awful. Compromised in so many ways.

As a new luxury car? Yes.

As a 10,000 dollar used car? Now it's interesting.

[AutobahnSHO]

A 4000lb "compact" car? 

[12,000 RPM]

Meh, its a more stylish volt - which is a pretty good platform to begin with!

I think the concept was good, but the execution was basura.

If they had given it more power, more doors, and a rear end that didn't look like an accident, it might not have become a complete joke.

A 4000lb "compact" car? 

Batteries have weight

[Payman]

As a new luxury car? Yes.

As a 10,000 dollar used car? Now it's interesting.

Auction wholesale is in the high 20's, so you'll still be paying in the 30's for one. Not long ago Jalop had a story on a brand new '14 stuck unsold at a dealership and discounted to $36,000.

[2o6]

ELR's looked great, but 70k for one is fuckin insane

[Soup DeVille]

Auction wholesale is in the high 20's, so you'll still be paying in the 30's for one. Not long ago Jalop had a story on a brand new '14 stuck unsold at a dealership and discounted to $36,000.

Well, I might have to wait a bit.

[ChrisV]

I looked up ELRs, there are still a few at dealerships as leftover '14s for $75-80k. Nuts. You can get them for $27-30k for low mileage used '14s all over. I love them BECAUSE they were coupe versions of the Volt with better materials and better styling. Coupe versions of sedans almost always went for more money, especially of they were better equipped with nicer interiors. And upmarket brands can sedll fro more than same platform lower market brands. Look to ANY company with an upmarket line to see how true that is (looking at you, Toyota and Honda) Unfortunately, GM priced themselves way out of the market with these. The dealership I bought my Volt at had a number of them that they were selling for $50-60k and at that price, were actually selling quite well.

[MrH]

The problem with the ELR GM knew about as it was happening.  They drug their feet too long on pulling the trigger to do the vehicle.  By the time it launched, it was too late.  It was first gen Volt tech, and within 2 years, the new Volt tech totally shows it up.  Guaranteed a really short product life.  Should have went 4 door, and waited for D2JCI platform before launching.

[12,000 RPM]

Caddy would be in a whole different place if the ELR were a serious 4 door luxury plug in. Tesla shows people will pay for them, even if they are shittily built. GM could do better than Tesla for less $$ if they actually gave a shit.

[SJ_GTI]

I wonder if GM used the ELR to just test the pricing boundaries. I am sure they saw Tesla's selling for a lot and figured "why not give it a shot?" They had the Volt at more reasonable prices either way (ie: whether the ELR was a success at that price or not).

[MrH]

Caddy would be in a whole different place if the ELR were a serious 4 door luxury plug in. Tesla shows people will pay for them, even if they are shittily built. GM could do better than Tesla for less $$ if they actually gave a shit.

No, they can't.  Tesla is still bleeding money at a rate none of the established players would accept.  The cost to build the Model S is still way too high.

[93JC]

Should have went 4 door

This was easily the next biggest problem with the ELR, after being grossly overpriced. Two-doors have a very limited appeal; relatively sedate, 'economy' two-doors especially.

[2o6]

This was easily the next biggest problem with the ELR, after being grossly overpriced. Two-doors have a very limited appeal; relatively sedate, 'economy' two-doors especially.

I think the lack of performance was a bigger deal breaker than the lack of doors

[Tave]

Tell me more about this strip club that doubles as a solar station...

[Raza]

Tell me more about this strip club that doubles as a solar station...

[Raza]

I could see looking into a 6MT CR-Z as a commuter, but only if it's super cheap (like under $7,000), because it's otherwise not that practical.  And I wouldn't have trust in a full EV.