With prices for used electric cars on the floor, there has never been a better time to nab yourself a rung on the electric car ownership ladder. Bargains are there to be had thanks in large part to the savage price-cuts being applied to new electric models.
While that’s unquestionably bad news for those who previously bought new EVs at their older, higher prices (and it seems to be at least partially responsible for the dampening of electric car sales around the world right now), for those buying second-hand it means that you can snap up a high-end, high-performance, long-range electric car for buttons.
As it has always been, the auction site is often the best place to go for the ultimate in bargains. After all, auctions are where car dealers usually go to pick up second-hand stock, so you can often be buying at what is effectively the wholesale price. Buying at auction has long been a sometimes scary prospect for the average second-hand car buyer, not least because there’s usually no chance for a pre-purchase test drive, and only the most cursory examination of a car’s condition can usually be made before it crosses the block. However, with homework done and the right attitude firmly in mind, buying at auction has been and can be a financially rewarding experience.
Does that hold true for an electric car, though? Clearly, when buying a second-hand EV, the most critical aspect of all is the health of the battery, and that can be tricky to assess at auction.
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Merlin O’Reilly, from the eponymous Merlin Car Auctions in Naas, one of Ireland’s biggest vehicle auctioneers, says that right now, some of the information on a car’s battery can be limited. “We have a machine that can read the health of a battery, but for now it only works on Nissan Leafs,” O’Reilly told The Irish Times. “If you weren’t able to check that, and you were buying, say, a 2012 Leaf which maybe had a 200km range when it was new, and now it only has 50 per cent battery capacity left, well you’d want to live fairly close to the shops. Ultimately, I think cars like this are almost disposable.”
I get the feeling that the electric cars we’re seeing now are kind of the Betamax video before VHS
— Merlin O’Reilly, Merlin Car Auctions
That seems to be a view increasingly echoed by the motor trade as a whole. From a time not so long ago when buying a new Tesla would mean you could probably move it along for almost the same price a year down the road, now second-hand EV values have plummeted, battery-powered cars are sticking stubbornly to forecourts, and many dealers are reluctant to accept EVs as trade-ins.
“As an example, we had a 222-registration Volkswagen ID.4 in here, which brand new would cost you around €41,000,″ said O’Reilly. “It looks brand new, and we put it up at auction with an initial bid of €20,000. And we got nothing. Not a single bidder. Two years and half price? It just doesn’t make sense. It would make someone an absolutely lovely car, at a terrific price.”
[ Switch to electric motoring accelerates with more motorists opting to buy EVsOpens in new window ]
That particular ID.4 was being disposed of by a finance provider, which means that a previous owner had either handed it back to clear a car finance debt, or it had been repossessed for delinquent repayments. While that might sound a bit tragic, it does mean that such vehicles can make almost ridiculous bargains for those prepared to shop for them.
According to O’Reilly, finance providers trying to move cars on will generally set a reserve price, but they can often be flexible as to whether a car will be let go for less. That said, a bank or finance house can’t be seen to undersell their cars either, as such a move would wreck the confidence on which such finance is provided, but there is certainly wiggle room for a canny buyer here.
[ Every new electric car coming Irish showrooms in 2024Opens in new window ]
“Looking specifically at that ID.4, I’d say if someone who was keen on it had been here last week, at €22,000 they would own that car today,” agrees O’Reilly. “And next week that could be €18,000. Ultimately, we didn’t have a live bidder, but the banks are aware of all this and that’s why there’s caution around electric cars. For example, they underwrote loads of Teslas, only for €10,000 to be knocked off the new price, and that hit all the finance companies with electric cars on their books. Once one price goes backwards, they all start to fall back.”
O’Reilly compares the current situation with electric cars to the 2008 change in the motor tax regime that was often criticised for not having been sufficiently flagged up ahead of time. Overnight, thousands of euro were wiped off the value of the second-hand fleet in Ireland, because suddenly petrol-powered cars were perceived to be, and to an extent were, paying higher taxes.
I would always be looking for models I have previous experience with and which have battery warranty left, and of course the necessary service history, to ensure the battery warranty is still valid
— Simon Acton, Next Eco Car
“I get the feeling that the electric cars we’re seeing now are kind of the Betamax video before VHS,” says O’Reilly. “There’s a lot of talk about hydrogen power, there’s a lot of talk about revolutionary new batteries, and I think until we see exactly what’s happening, and until the charging network improves enough, I just don’t think we’ve landed with this yet.”
Still, if the trade is reluctant when it comes to EVs, that most certainly means bargains for the dedicated buyer. Simon Acton, of Next Eco Car – a specialist second-hand electric car dealer in Dún Laoghaire – told me: “I buy a certain amount of stock from auctions in the UK, so I wouldn’t say that it’s particularly risky, but you need to know what you are doing.”
Acton’s best advice is two-fold – battery health and warranty. “I would always be looking for models I have previous experience with and which have battery warranty left, and of course the necessary service history, to ensure the battery warranty is still valid. We would then run our own battery test when the vehicle arrives. I’ve not had an issue buying this way as yet. If I had, the warranty would be my fallback.” Most car makers offer an eight-year warranty for the vehicle’s battery, usually with a limit of 160,000km.
[ Which electric car battery is best? EV battery types explainedOpens in new window ]
Acton also feels that simple education and the use of good battery testing equipment is the key to unlocking the second-hand EV market from its current doldrums. “We are speaking to auction houses here, and in the UK via our partners Maverick Diagnostics, about them taking on the Aviloo battery testing tool, to give customers transparency and reassurance about battery health of the cars they are selling. This is an ongoing conversation so, from a commercial point of view, I can’t say too much.
“Whilst they are open to the idea in principle and see the benefit, there is obviously a cost to providing this service, and that’s where these conversations are right now. I think this will resolve in time, but it obviously needs to happen sooner than later. The various parties moaning about EV residuals need to get behind initiatives like this because it has the potential to calm the waters and dispel all the rubbish out there in the media about EV battery health.”
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