Used Electric Vehicle Prices Soar Above the Market
Used electric vehicle prices soared over hybrid and non-hybrid/electric used car prices in May 2022 in the United States. Costing an average of 58,165 U.S. dollars, used EVs were around 71 percent more expensive than their non-hybrid and non-electric counterparts and only around nine percent cheaper than the average transaction price for new EVs in December 2021.Due to various factors, used EV popularity and value have inflated above the rest of the U.S. used car market. These factors include rising lithium prices, the global automotive semiconductor shortage, and increasing governmental measures to incentivize EV purchase and ban internal-combustion engine (ICE) vehicle sales—California is expected to ban new ICE car sales in 2035. However, the chip shortage has boosted the overall used vehicle market. Over 43.1 million used light vehicles were sold on the U.S. market in 2021, an increase of under two percent of the 2019 sales volume. U.S. used vehicle sales rebounded from the COVID-19 sales drop, while the new vehicle market still reports sales below its pre-pandemic level.
The Used Vehicle Boom Reflects the Broader Industry
The used light vehicle market followed similar patterns as the new light vehicle market. The quarterly net purchase of used light trucks grew in the fourth quarter of 2019—reaching 194.75 billion U.S. dollars in the second quarter of 2022—and had been higher than used automobile sales since at least the first quarter of 2015. Two years earlier, in 2013, light trucks overtook cars in retail sales volume. Since then, light trucks have been the leading light vehicle type in the United States. The Ford F-Series, Ram Pickup, and Chevrolet Silverado were 2021’s best-selling new light trucks, and the high demand for these models is reflected in used vehicle sales. The Ford F-150 represented 3.6 percent of all used Model Year 2016-2020 vehicle sales in the U.S. in 2021, making it the best-selling used light truck. It was followed by the Chevrolet Silverado 1500 and Ram Pickup 1500.Pickup trucks were among the most expensive used vehicles by body type, averaging a 41,239 U.S. dollar price tag. Used vehicles are seen as an affordable alternative to new vehicles. However, the average monthly used car loan and lease payment has been increasing, up 21.5 percent year-over-year between the first quarter of 2021 and the first quarter of 2022. This payment rise was higher than new car loans and new car leases, which grew by around 10 and 12 percent, respectively, across the same period.
