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Are Used EVs Better Values Than Ever?

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Could these be smart buy after all?

Generally speaking, new vehicles depreciate quickly, though there are a few exceptions aside from Ferraris and other rare sports and supercars and other collectibles. But a 2015 Nissan Leaf? Is it now an exception, too? Automotive News, citing a new report from J.D. Power and Associates, points out that unlike in the past, some used electric vehicles are finally beginning to retain some value. Take that 2015 Leaf, for example. J.D. Power discovered that 2015 Leaf wholesale prices are about 1 percent higher than they were a year ago. Yes, it’s only 1 percent but it’s something.

“So from a consumer standpoint, that means they have an appreciating asset,” said Larry Dixon, J.D. Power senior director of valuation services. “That's quite extraordinary.”

The Leaf’s annual depreciation rate had been 25 to 30 percent. In other words, some used Leaf prices are up for the first time ever, and 2015 Leafs are the best examples. They have retained 30 percent of their originally equipped sticker price for 2018, an increase by 23 percent over last year, according to J.D. Power, which focuses on three-year-old used vehicles when calculating retention rates. And it’s not just the Nissan Leaf EV that’s showing signs of retention.

Take the Fiat 500e, for example. Its retention rate is at 21 percent in the fourth quarter of this year, up from 18 percent only a year ago. The Chevrolet Spark EV now has a 25 percent retention over its 21 percent figure in 2017. The Spark EV’s wholesale prices are up 10 percent year over year as well.

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The question is, what factor(s) are leading to better EV retention rates? The first appears to be increasing prices for all vehicles, new and used. The second is that EV prices have hit rock bottom. Basically, EV prices had gone so slow they had nowhere else to go but up. But are these improved EV retention rates nothing more than a temporary fluke? Hard to say, but analysts believe this trend will continue into 2019.

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