Electric shock: Quebec’s used-car market gets a jolt

Article content

Faced with the challenge of buying a new electric vehicle, a growing number of consumers are turning to used models. However, with a dramatic jump in the price of electric cars, buyers are being warned to be careful before closing a deal.

Article content

When it comes to used cars, the world has been turned upside down. Usually the value of a vehicle depreciates from the moment it’s driven off the lot. But now, used cars can sometimes be an investment, particularly in the case of electric vehicles.

For example, last December the average price of a used Model S Tesla had jumped by 40 per cent compared with the same model two years earlier, according to the vehicle sales platform AutoHebdo.

“This is a never-before-seen increase in the value of used cars,” said AutoHebdo marketing director Benoît Béland. “Dealers are snapping up our used models, especially electric vehicles (EV).”

In Quebec, searches on AutoHebdo for EVs increased by 85 per cent in March 2022 compared with the year-before period, and the number of consumers seeking information from the site increased by 1,218 per cent in one year.

Article content

Given the increase in prices in a market where demand exceeds supply, Béland cautions that buyers must be careful to analyze prices.

“We have an algorithm on our platform that compares the prices for similar models in real time,” he said. “It’s easy to determine if a price being asked is above or below the average.”

CAA-Québec’s Jesse Caron conducted presentations last weekend on the myths and realities of EVs and on the purchase of a used EV during the Salon du véhicule électrique de Montréal.

Buying a new or used EV is usually more economical than buying a gas-powered equivalent, Caron said.

“It’s true that the difference in price is quite marked at the outset and that can be a brake (to purchase),” he said. “But over the next few years, it becomes profitable.”

Article content

Caron backs up that assessment with figures obtained by his team. Those figures indicate that a used 2016 Kia Soul EV cost $6,000 more than a used gas-fueled equivalent, but also allowed its owner to save an average of $2,750 a year in fuel costs, making it “a better deal” after two years.

The CAA also found that while a rechargeable 2018 Mitsubishi Outlander cost $3,600 more than its gas-fuelled equivalent, the model represented $1,700 annually in fuel costs, making it “more profitable” after two years.

Caron also strongly recommends that buyers examine the state of an EV’s battery before making a purchase.

The batteries will degrade over time, a natural consequence that is particularly acute among the first EVs on the market 10 years ago, he said.

While examining battery health on the dashboards of some models is possible, Caron said it’s better to have any degradation measured by a garage with the proper equipment. If it is necessary to replace a battery, it’s better to do so with the car’s manufacturer than a third party.

According to AutoHebdo, two-thirds of consumers in Quebec intend to buy an EV. Potential buyers should research which models are eligible for government subsidies.