What's everyone's thoughts on ev values dropping like a stone

[Jones886]

Hi all hope all is well

Just wanted to get everyone's views on the values of ev car's taking a beating of late

Do we think they will recover ?

Is this the start of a massive earthquake in the value of Car's from the an all time high?

If on pcp are finance company's prepared for the hit and an influx of Cars been handed back either mid term or at the end of an agreement ?

So I purchased my car back in January mg5 ev exclusive for 20500 was the cheapest around at the time from a well known dealer now we buy any car valuing around 12.5 k.

That's a drop of around 8k with the finance company stating it will still be worth 11k in 4 years time. I can't see how or when it will recover.

I normally change Cars every two years but I think I'll be in for the long haul with this one for the 4 years which I'm quite happy doing if valuations do not recover.

Be good to hear from everyone

 

[admiralross2400]

I just checked mine on auto trader and am being told it's worth over 19k still. We buy any car, who I find always under value a car as they're more akin to those companies who offer to buy your house quick for cash, are also offering just over 15k for it. Mine is a 71 plate with just under 10k on the meter.
So with those figures, I think the value has kept up to be honest.

 

[Jones886]

Hi yes I've saw this on auto trader also but here is another case I've come across.
My dad also has a 21 plate mg5 exclusive lr around 26k on the clock went to a local dealer and he's been offered 15k max as a trade in against a citreon berlingo electric van and I'm also hearing a lot of dealers are putting the brakes on buying ev car's.

I'm on a ev group on Facebook and everyone is complaining about the same thing seeing around 8/10k wiped off there values.

All just doesn't make sense to me when like you said auto trader have them still for around 19k.


Dan

 

[Gomev]

...

So I purchased my car back in January mg5 ev exclusive for 20500 was the cheapest around at the time from a well known dealer now we buy any car valuing around 12.5 k.

That's a drop of around 8k with the finance company stating it will still be worth 11k in 4 years time. I can't see how or when it will recover.

...

I think your post contains part of the answer, 12.5k now with WBAC or 11k in 4 years time.
Also the finance company aren't interested in the real value, just making sure it's worth what they have invested.
Most cars would depreciate by about 50% in the first 4 years anyway, the AA say 60% in 3 years !
We are currently experiencing a correction, the second hand value of mine was more than I paid for it at 6 months old, now after a year, it's about right, but seems a lot less if you only think of the drop in the last few months, but take it overall.

'After one year, your car will probably be worth about 20% less than what you bought it for. AFTER FIVE YEARS: After that steep first-year dip, that new car will depreciate by 15–25% every year until it hits the five-year mark. So, after five years, that new car will lose around 60% of its value.'
Courtesy of Car Depreciation: How Much Is Your Car Worth?.

 

[admiralross2400]

I'd say that the dealer is low balling your dad. Here's a similarly specced MG5 from Arnold Clark for almost £22k. But mind, a dealer trade in is always going to be under the value by at least a few thousand as they've got to make a profit (that's what they tell us at least ).
The biggest tell if there's likely to be a slow down is if the wait times for new ones have come down.
Values will change during the year too given people tend to buy cars at specific times of the year

 

[Fokmg]

The recent reduction in the value of EV prices is really a correction to the silly pricing that occured over the last two years.
In November I found the value of my 2 year old MG5 was slightly more than the amount I paid for it new (alarm bells ring).
The recent dramatic price drop has brought the price to the value I would have expected it to be for a 2 yr old car.
Similar dramatic changes can be seen through out the industry.

Supply is improving and demand is dropping, it will be interesting to see what happens as the market soon gets flooded with cars purchased using the various lease agreements.

At the end of the day the real sum that counts is what does it cost to change your old car for a newer car.

 

[Les burrows]

Well jones886 around 6 weeks back there was a thread entitled MG4.or tesla model 3 which was started by prof1967 much the same topic and #10 in that I write what happen with me and MG5 very briefly my first MG5 I made around 3k profit on after around 20 months and 18500 miles so I sold it happy days a few weeks later I purchased the new MG5 still happy it was 3/4 weeks old with under 400 miles on it but almost 4K cheaper than new with the same spec 2 months or so later Tesla reduced the prices by a lot of money and I with love a model Y so I began to see how much I could sell the MG5 trophy with 1700 miles on it for, the best price I could get was almost 10k less than I paid for it so until my 6 numbers come up I will be driving the MG5 for a good while to come.

We we purchased the MG4 for my wife placed the order about mid September the dealership where we took a test drive had 5/6 second hand EVs for sale last week I was at the same dealership and he now as over 20 for sale and is not selling any of them from what I could gather the market is at this moment at an all time low on 2nd hand EVs even Teslas but it will recover
Les

 

[Darren D]

I have to say that I have actually benefited from the value of EV's coming down. This week I have paid just over £20K for an 8 month old LR (Mk1) with 3000 miles on the clock. These were 3K - 4K more expensive at Christmas when I was looking, so much so I decided not to get one. Just checked again a few weeks ago and was amazed at the price reduction. So much so, there was not much difference between this and the ICE car we were considering. For some reason the press has been totally anti EV's recently too which may have had an additional impact. Like all things, I'm sure they will bounce back......just look at the price of a used Allegro, who'd have guessed that!.

 

[smokie]

Lots of cars coming onto the market at end of lease.

Tesla dropped the price of one model (was it the 3?) quite dramatically.

Lots of potential buyers suckered by the anti-EV scare stories (poor charging network, low range, car parks and bridges falling down etc etc).

Cost of living crisis = fewer buyers overall.

How are ICE prices?

For me, it is what it is. Les and others will have got lucky and made a change at just the optimal time. I have no plans to change anyway. But it's like house prices in a way. If they've all gone down, why does it matter really (unless you have debt based on it of course).

But tbh I think the 2nd hand EV market will remain strong, just not at silly prices. If there is a sustained downward pressure on prices then it will affect new as well, and they will have to follow suit, with discounting coming back into vogue.

 

[Jones886]

Thankyou all for the comment's some very interesting facts on here and that's why I love the Mg ev community.

Yes we all know dealers have to make a couple thousand on the car and that's normal. Just baffles me how they can offer 8k less on market value but still try to sell there's at full price if they carry on like that won't be a dealership to go to soon.

I too used to work at motorpoint and the story's people used to tell me of owning the car for 6 months and making a profit was crazy so we would always see the same customer twice in a year compared to probably the national average of every 2 years or so AND WE ALL KNOW THAT BUBBLE WAS GOING TO BURST!


I asked my manager at the time this question when the bubble bursts what do you think will happen . His response was well it will go back to the old way of people having to ride out a 4 year pcp and either handing it back or trading in with very little equity or none. Back in those days you could haggle the Apr even that is not possible now. Even his theory was the cap guide price wouldn't just dramatically plummet and come down slowly but seems its gone the other way and like another user said the press have not been kind to the ev market.

It does not worry me been honest as I just know in my head I wouldn't be stupid and trade in at a massive lost ill just ride out the storm and enjoy it for 4 years if I have to.

Appreciate all the comments


Dan

 

[Edoc16]

Well jones886 around 6 weeks back there was a thread entitled MG4.or tesla model 3 which was started by prof1967 much the same topic and #10 in that I write what happen with me and MG5 very briefly my first MG5 I made around 3k profit on after around 20 months and 18500 miles so I sold it happy days a few weeks later I purchased the new MG5 still happy it was 3/4 weeks old with under 400 miles on it but almost 4K cheaper than new with the same spec 2 months or so later Tesla reduced the prices by a lot of money and I with love a model Y so I began to see how much I could sell the MG5 trophy with 1700 miles on it for, the best price I could get was almost 10k less than I paid for it so until my 6 numbers come up I will be driving the MG5 for a good while to come.

We we purchased the MG4 for my wife placed the order about mid September the dealership where we took a test drive had 5/6 second hand EVs for sale last week I was at the same dealership and he now as over 20 for sale and is not selling any of them from what I could gather the market is at this moment at an all time low on 2nd hand EVs even Teslas but it will recover
Les

Re the staggering price drop Les, I was considering getting the MK 2 Mg5 but the sales manager told me to hang on as he priced my 22plate 5 exec at a stupid price and to wait as the prices will stabilise later this year so....will follow his advice in the hope he's right.

 

[Lovemyev]

It is my personal belief that dealers are running scared at this moment in time and really under valuing EV cars ( especially ) at the moment.
Why - because some have been burnt badly with some of the trade in values they have given out to customers about six months ago.
Back then the market was stupidly over inflated on part X values, prior to the bubble suddenly bursting, with the help of Tesla when they reduced the price of the model 3 straight after Xmas 23 by at least £6,000+ !.
Dealers were almost forced into giving out high trade in valves on second hand EV’s because if they did not, then the usual buyers like WBAC / Motorway etc etc would !.
However, when the bubble did burst, it was quick and left dealers with a lot of stock on the books.
Many of these cars are still sitting on forecourts not bought, due to the high screen prices.
This is one of the reasons they are not offering good prices at the moment.
A relative of mine traded in his two year old Gen1 SZ EV with only 8,000 miles on the clock.
He was upgrading to the Gen2 model.
After a long wait, it suddenly turned up just before Xmas.
Therefore the P/X price he received was almost what he paid for the car !.
He paid a visit to the dealer only yesterday and the car is still on the forecourt, although along with three other EV’s.
His previous car has been reduced by £5,000 on the screen price and it’s still there !.
So, that is good proof of my theory I guess ?.
It’s almost become a perfect storm situation.
Suddenly all of a sudden, people are certainly not prepared to pay the high screen prices on these cars, the dealers have no ( or very little ) margin left in order to move these cars on.
Trading through the auction houses is not really an option either, so they just sit for months on end !.
They do not intend to be burnt twice here, so any trade in valuations are going to be badly affected.
Right now dealers are cursing Tesla for what they did.
Like it or not, Tesla was totally instrumental in creating the demand we seen for electric cars.
It left the legacy companies having to follow or get left behind.
So, they decided ( reluctantly) to join the race.
As the competition started to ramp up Tesla decided to throw a spanner in the works to slow down the progress.
Only proving to me at least, that Tesla has a larger control over the whole EV market than you might like or believe, or think they have !.
Oh …… Just for the record folks, I don’t own or drive a Tesla .

 

[Les burrows]

You right there Jeff when you say Tesla has a larger control over the EV market they do for sure but on top of that pricing reduction that they did a few other things have happened over the last couple of months like the cost of electricity going up the price of fossil fuels for ICE still today is falling bit by bit , road tax coming and not far away for EVs now, yet another nail in the EV coffin, new models such as the MG4 and others from Renault Citroen Cupra VW Tesla modelY so far more choice nowadays, and of course the way today is leasing not buying and that to has a massive effect example being it’s now around 3 years since Teasla again did some fantastic deals on leasing the model 3 in particular and a lot of them deals have now ended or are about too my son has had a Model X for around the same time and lost a lot of money on it in March this year but once again has gone for a new Tesla the model Y this time as along with the price drop from Tesla for a very short period they where offering the uptake of the Y at 3.5%.
So in a nutshell why wait months for a MG ZS or pay a lot more for the face lifted MG5 than the previous model was when a Tesla 2/3 year old is in some cases cheaper if I could have got a much better price on the MG5 I have now I might well be driving a model Y Tesla right now.
But you live and learn with cars or at least try to.
Les

 

[ianwlk]

market spooked by reduced Tesla prices and looming £25k models from VW Tesla etc - plus imminent arrival of other Chinese manufacturers who have the power to totally disrupt the market based on their huge economies of scale. As has been said , a perfect storm. car dealers will desperately seek to protect themselves .

Also UK Economy so shot to pieces that tax on electricity used to power cars - solar, wind, off-peak or whatever - is absolutely inevitable by 2025 whoever is elected.

 

[smokie]

Also UK Economy so shot to pieces that tax on electricity used to power cars - solar, wind, off-peak or whatever - is absolutely inevitable by 2025 whoever is elected.

Absolutely but more to do with lost revenue from fossil fuel sales then the state of the economy. It'd always have been impossible to move everyone off petrol and just suck up the lower tax take.

I even factored a healthy rise in fuelling costs into my buying decision 18 months ago.

Same reason I've decided against getting house batteries - it's impossible to know how prices (tariffs) will change over the next few years. Easier decision if you have significant spare solar but not if you are depending on refilling the batteries at cheap time and exporting at expensive, which some seem to do. It may still work out for them though..

 

[Les burrows]

Yeh first EVs where in my view a bargain, in my case when I first ordered back in 2020
grants from from the government discounts from MG some free or very cheap charging it was a no brainier to buy one, and move from fossil fuels, plus on top of that a very good pay back when I sold my first MG5 SR.
My how it’s changed in the last 3years or so but I’m still able to console myself in the fact I love to drive the EVs and with having solar PV my own 5 trophy estate and the wife’s 4 SE SR the money we can save on fossil fuel and the costs of servicing still make it all worth while plus our bit to help the planet we hope we are doing never going back to fossil fuel no matter what.
Les

 

[Lovemyev]

Hi Les - The early MG EV models were a bit of a “Billy Bargain” to be honest, but we have to remember that early adopters were guinea pigs TBH.
MG had absolutely no idea how these models would be received and therefore priced them attractively to get some orders and bum’s on seats.
Of course history know tells us, that the first wave of 1,000 ZS EV’s with the government grant ( at the time ) and the free wall box offer sold out very quickly !.
I was one of the people in that first 1,000 orders.
There was very very limited info at the time of ordering, so it was a bit of a gamble alright.
Demand for the car caught the dealers totally napping and they could not understand why all of a sudden, they where taking lots of orders for the ZS model that had been around for a while, just because it now had a electric power train ???.
As at this time, some of the sales people had not even driven the car themselves yet !!.
As the ZS EV continued to be more and more popular, that started the supply problems.
Grants were slowly eroded and incentives were slowly removed.
When the Gen2 was released, MG already had more confidence that the car would sell well and therefore where comfortable with increasing the price.
So as of Jan this year, we have a lot of orders still unsatisfied and more EV models being available.
The Tesla throws in a curved ball and really upsets the market !.
As three year old models 3 are now entering the race, it gets people refocusing on placing an order for a new ZS EV at similar money.
But when comparing back to back on price, the Tesla model 3 IS a three year old car now.
The initial depreciation has gone off the car, but not on the brand new vehicle of course.
Do you go brand new, or for a three year old Tesla with a decent amount of miles on the clock is the 99 dollar question I guess ??????.
Almost all of these Tesla’s will be X lease / PCP vehicles and tend not to be treated as well as a private owned car.
This has to be a consideration also.

 

[Mitch AC DC]

Last years 2nd hand car Boom has apparently died, Dealers are back to normal.
I was "only casually" looking into moving on to the MG5 Facelift model. Valuation! horror of horrors I found that my 22 plate MG5 Exclusive 4500mls, Has apparently dropped in a year £10,000 from what it cost me. So now I am more than happy to stick with my "old fashioned" model, probably until the Government decides we`re too old to be trusted on the roads { 73 and rising }. 5 year warranty is cheering me up now though.

 

[Jones886]

Some brilliant write ups here and very good points I think we should all open a newspaper company funny enough the dealer rang me yersteday to ask how I was getting on with the car and I said I'm OK about from the shock horror of valuations currently. Even he agreed and said I would just stick with your car currently. I did ask them a question of do you think it will bounce back and there adamant it will but its just a case of wait and see.


Like I said previously I strongly now belive the market is back to been bored in your motor after a couple years counting down the days you can change it or going to the dealership to be told you have 3 k negative equity or more in the ev world currently. I think the days of been able to walk in and out changing your car every year like it has been for the last few years has sailed and we all agree.

It would be very interesting to see a 4 year pcp now on a mg5 with the residual valuation now.

 

[Lovemyev]

Some brilliant write ups here and very good points I think we should all open a newspaper company funny enough the dealer rang me yersteday to ask how I was getting on with the car and I said I'm OK about from the shock horror of valuations currently. Even he agreed and said I would just stick with your car currently. I did ask them a question of do you think it will bounce back and there adamant it will but its just a case of wait and see.


Like I said previously I strongly now belive the market is back to been bored in your motor after a couple years counting down the days you can change it or going to the dealership to be told you have 3 k negative equity or more in the ev world currently. I think the days of been able to walk in and out changing your car every year like it has been for the last few years has sailed and we all agree.

It would be very interesting to see a 4 year pcp now on a mg5 with the residual valuation now.

Not a big lover of PCP deals myself TBH but each to their own I guess !.
If I was very early into a PCP deal right and looking at the EV residual, I would just sit tight and totally forget about any thoughts of replacing it for the next 12 months.
The drop in prices were sudden but the recovery will be slow.
Dealers are extremely cautious at the moment and this is reflective with regards to valuations they are giving out right now.
Many dealers are still holding stock that they bought at the height of boom and are now struggling to move them on.
They will not be buying in any more stock until these cars are gone IMHO.
Unless they can take in a car with a stupid amount of profit in it, that will off set the loss on these cars gathering dust.