Consumers: Used car prices are falling – especially for electric vehicles

The prices for used cars are falling again. The decline is particularly drastic for electric cars, as a current analysis by the market observer DAT for the dpa shows. But the so-called residual values, which show how much of the original list price is still left, have also fallen significantly for combustion engines.

If you compare the current dealer sales values ​​for typical three-year-old electric cars from April with those of the same period last year, there is a drop of 18 percent for electric cars. Petrol and diesel engines also fell significantly, but at 7 and 5 percent they were less extreme. Overall, there is a reluctance to buy, the DAT notes. As a result, the cars are sitting longer on the dealers’ yards, which is why they are lowering their prices. However, the speed of falling is now decreasing. “We assume that the first strong downturn is over and that the curve is now flattening,” said a spokesman.

He attributes the fact that the decline in diesel is less pronounced to lower supply and higher demand. This means that the percentage residual value of diesel engines overtakes that of gasoline engines in April – according to DAT, for the first time since 2015, the year of the diesel scandal.

Combustion engines are no bargains either

But that doesn’t mean that used combustion engines are bargains. As a result of the Corona and chip crisis, their prices had risen enormously. Even after the current decline, with percentage residual values ​​of 64.5 for gasoline engines and 64.6 for diesel engines, they are still far above the values ​​of the pre-Corona period, which were typically in the range of 55 percent plus minus a few points.

“Overall, we have more normal conditions in the used car market after the period of shortage,” says the vice president of the Central Association of the German Motor Vehicle Trade, Thomas Peckruhn. “The range is larger and the customer no longer has to buy every car.”

When it comes to electric cars, however, one cannot speak of normalization: after the current slump, their percentage residual values ​​are 50.7, well below the pre-Corona level, which was similar to that of combustion engines.

Market still in its infancy

The lower residual values ​​are unlikely to trigger a boom in used electric cars. On the one hand, the residual value always refers to the new list price before deduction of premiums and discounts – and this is often significantly higher for electric vehicles than for comparable combustion engines.

In addition, the market is still in its infancy: in the first four months of the year, the Federal Motor Transport Authority counted a good 44,000 ownership transfers of pure electric vehicles – a share of two percent. The background is that the share of electric cars in the German vehicle population is still relatively low at just under 3 percent. The majority are still relatively young and many cars are in private hands. Both mean that the market for used electric vehicles will probably take some time to get going.

And the gap between electric vehicles and combustion engines could widen even further: “The residual values ​​in the combustion engine sector are currently relatively stable again – especially for attractive vehicles,” says Peckruhn. “In the electrical sector, however, there is still pressure.”