Is now the right time to buy a second hand electric car? Values of used Tesla Model 3, Nissan Leaf and Hyundai Kona EVs fall as incentivised lease deals come to an end

For those among us who hate depreciation, now might be the perfect time to start looking at second hand electric cars. 

With many new electric cars locked in price wars to keep factory doors open, values of second hand examples are falling according to auction house Pickles, which released a report on its sales so far in 2024. 

Petrol and diesel second hand values fell throughout the quarter approaching pre-COVID levels, they were a long way adrift from electric car values that have fallen 20 per cent, almost to pre-COVID figures, between March and the end of September.

Pickles noted pricing pressures, for example Tesla’s repeated discounts this year, which saw a base Model Y drop $9500 between April and June, along with ‘end-of-lease dynamics’. 

The note on leases is particularly interesting, as it reflects the strong impact the government’s FBT exemption for fuel efficient cars is having on the market.

Looking at Germany's recent EV sales slump, it’s clear how quickly sales of electric cars can fall off when incentives run out. A report from Reuters talks of the increased lease prices in Europe driven by falling residual values. It’s a delicate balance. 

For those who buy second hand, though, this can be a positive, with Pickles increasing its turnover of EVs 270 per cent this year, selling more than twice the number of EVs in the third quarter as in the first of 2024.

Unsurprisingly, it was the Tesla Model 3 leading the pack, the sedan was followed by the Nissan Leaf, Hyundai Ioniq and Kona electric, Audi e-tron and the Cupra Born. 

Of the EVs sold, over 70 per cent were non-Teslas, despite the US-brand’s dominance in the new car market, with 60 per cent of the cars sold to end users, rather than auctioned to dealers to be sold again.

While the Australian new car market typically sees around 1.2 million units shifted in a year, the second hand market is almost twice as big. Last year, the figure was 2,074,535 used cars, according to the AADA, playing 1,216,780 new ones.