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I have been researching EV's for the past year or so and I am interested in buying a used EV to take advantage of the depreciation that seems to be pretty severe. I was looking at the battery only version of the i3 but the range is just too low for me to justify it. Although, the $15,500 quote on a 2015 with 19K miles is very tempting....

That points me to the Bolt. The range is perfect. I like the style. The DC fast charge is a huge plus. All these things point me to waiting until the off lease cars come on the market . Now here is the "but"...

If the current EV tax credit is discontinued as it looks like it may be (unless the Senate Tax reform version is approved) the depreciation will slow down massively in my opinion. That is a good thing overall but not for buyers looking to buy used like myself. What I am looking for here is opinions on how the cancelation of the tax credit will affect values of the car on the used market. What do you think the price will be on off lease cars when they come on market (I know, tough call but just approximate numbers please). The BMW i3 just nose dived in value as well as the leaf. Will the Bolt fair better?
 

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I have been researching EV's for the past year or so and I am interested in buying a used EV to take advantage of the depreciation that seems to be pretty severe. I was looking at the battery only version of the i3 but the range is just too low for me to justify it. Although, the $15,500 quote on a 2015 with 19K miles is very tempting....

That points me to the Bolt. The range is perfect. I like the style. The DC fast charge is a huge plus. All these things point me to waiting until the off lease cars come on the market . Now here is the "but"...

If the current EV tax credit is discontinued as it looks like it may be (unless the Senate Tax reform version is approved) the depreciation will slow down massively in my opinion. That is a good thing overall but not for buyers looking to buy used like myself. What I am looking for here is opinions on how the cancelation of the tax credit will affect values of the car on the used market. What do you think the price will be on off lease cars when they come on market (I know, tough call but just approximate numbers please). The BMW i3 just nose dived in value as well as the leaf. Will the Bolt fair better?
The Bolt will hold more value than what people think IMO. In two years people may be able to buy a Model 3 or a Nissan Leaf with 200 plus mile range. I don't see another 200 plus mile range coming to market that soon. In a little over two years, especially in California, that is when the Bolts will come off lease. Since the Bolt will be the only affordable EV that can be bought used with 200 mile plus range, the resale market will be really good. I think a low mileage Bolt will still be worth in the 20 to 25 thousand dollar range in three years.
 

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I think a low mileage Bolt will still be worth in the 20 to 25 thousand dollar range in three years.
That sounds like the value of a good ICE car starting at a similar new price, but Bolts that took advantage of the Fed tax credit should be that much cheaper. People who did not obtain the credit will want a higher price. Its going to be competitive. When buying one in three years, there will be a need to ask whether or not the owner obtained the credit. Of course, if tax reform does not happen, its not an issue.
 

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With or without tax reform the tax credit will be gone in two years for all of the current major players (Nissan, Tesla, Toyota & GM). It may be gone for the others like Ford, BMW, etc. too. As someone that has done a lot of leases, one can see that typical value on any car runs from a high of around 60% of MSRP to a low of around 45% of MSRP after 3 years. The vast majority are in the 50% to 55% range. The actual value at lease end is usually lower than the lease end buyout value as this is a way the manufacturer discounts the lease by offering a higher residual value in the lease than they know the car will be worth at wholesale auction. They build in a few things in the lease to help compensate for that difference such as the end of lease fees and excess milage charges. Taking all of these factors into consideration, I fully expect that the Bolt will be worth around 50% of MSRP after 3 years (most leases are 36 months and there are a few 24 month leases). Thus I expect my premier Bolt will have a wholesale value of around $21.5K after 3 years or 50% of MSRP. The MSRP on my car was $43,510, I paid $39,260, a discount of $4,250. In addition I received (will) $2,500 from CA and a $7,500 tax credit so my actual cost is $29,260. Assuming a value of around $21,500 after 3 years, my actual depreciation cost is $7,760 or about $2,500 per year or about $216/mo. If it were to hold to 55% at the end of 3 years and have a wholesale value of nearly $24,000, my monthly depreciation cost would drop to around $146. I didn't look into leasing the Bolt, but if you can find a lease for a premier Bolt with payments close to $200/mo it should be a good deal.

So how will the loss of the tax credit impact this picture? There will be a decrease in sales as the credit goes away which means fewer used cars and the laws of supply and demand say that if there is less of an item and/or higher demand the price will increase so it will mean residual value will tend toward the 55% instead of the 50% If people really want the car but sales have dropped dramatically (like they did in Georgia when it did away with its EV incentive) then 60% may be the wholesale residual.

Note that at full MSRP the monthly depreciation cost approaches $600/mo at the end of 36 months at a 50% residual value. This is why the incentives are so crucial to being able to sell these cars. When you add to the depreciation cost the interest on the money, you would be talking a cost of ownership (or use) over 36 months of over $700/mo.

Here is an example taken from an article in Inside EVs from about a year ago on what GM was offering back then:

Via LeaseHackr, here is GM Financial’s numbers:

Residual Values (36 Months)
Trim 10,000 Miles/Year 12,000 Miles/Year 15,000 Miles/Year
Bolt EV LT 61% 60% 58%
Bolt EV Premier 60% 58% 57%
Rates
Credit Tier Money Factor Interest Rate Equivalent
Tier A+ and A1 .00050 1.20% APR
Tier A2 .00133 3.19% APR
Tier A3 .00217 5.21% APR

and their comment:
“As for rebates and incentives, there’s a $2,500 Incremental CCR incentive through GM Financial (CA or OR only). Given how Bolt EV qualifies for the full $7,500 federal tax credit, we frankly expected the CCR to be higher. But it looks like GM is passing only a fraction of that amount to lessees — and using the rest to inflate the residuals (which also lowers the payment).

There are no other incentives from GM at the time (no competitive owner/lessee cash, no Farm Bureau rebate, and the like). However, like all battery electric vehicles, Bolt EV does qualify for the $2,500 CVRP mail-in rebate from the California Air Resources Board.”
 

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The Bolt will hold more value than what people think IMO.
Yes I agree. To do this analysis right we need a Pareto chart with axis for price (incl rebates which are expiring anyhow), rate of features improvements (range etc) and rate of price decrease. I'm willing to bet that not until the early 2020's will EV's be as affordable and feature rich as the Bolt is now. Back of the envelope here, but consider GM will blow through it's EV fed rebate probably next year (or the Fed will outright kill it), range is increasing a few 5%/year (and I'll bet that 200 is the new normal so we don't see that as consumers), and price will slowly lose some 5%/year or something.

Anyhow putting it together I estimate the Bolt to be likely at a peak of value that will decrease the next year as rebates expire, but then in five years will slowly come back as price drops and features increase.
 

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Let's say they kill the credit for 2018. I bought my Bolt in 2017 and will claim the full refund. What makes you so sure I would pass that full savings along to the next buyer? It's really going to depend on the market, and if they kill the credit, EVs will be more expensive, and used ones will sell for more money (regardless of whether I claimed the credit).

Today, the best deal going (used) is on Nissan Leafs. You can pick up a 2015 for around $8K. A friend of mine picked up a very interesting 2015 SV one (light interior, SL rims) with 300 original miles as a dealer courtesy car for $11K. I was honest when I said I would have paid that money for that car without a second thought. So there are some really good deals if you can accept the limitations of the first gen EVs like the BMW or Leaf.

Having bought a Bolt, I would tell you that I accepted that GM was not going to offer a good lease deal here in FL. So I negotiated for the best buy I could get and I did fairly well in competition with others... I can't match CA prices with all those juicy rebates. But my Leaf went back after 3 years without any problems or loss of range. I'm hopeful the Bolt will last 5-6 years and hold up equally well.
 

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It depends upon one's usage, level of tolerance for range anxiety and how much one is a slave to the math. This past summer, the math worked out for us that 2014 i3s coming off lease were the sweet spot of features, driving fun and net cost. Ignoring the logic, we bought a Bolt because it had more range and was even more fun to drive. Our son, who leases an i3, drove our Bolt and says the Apple Play feature was what he liked best. Strokes for folks. For some, the bottom line is not the bottom line.

jack vines
 

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The only Bolts sold with a full $7,500 tax credit are going to be 2017's and the bulk of the 2018's unless they modify to extend the 200k car per manufacturer phase out. Once credit-less 2019+ models hit the used market the suppressed resale value will be gone, you'll be buying on age/miles/condition as always and a MY 17/18 with similar miles and condition to a MY 19/20 will not be selling for much cheaper unless there is simply no demand for the car in general. If GM lowers the pricing by $7,500 on newer model years it will be a moot point, but it remains to be seen if price reductions can happen that quickly.

Also important to note, unless they do what Nissan did and move off lease CARB southern/western cars up to the north and to the midwest to sell them in cooler climates to try and slow the battery degredation, a large swath of the country is not going to have anything remotely resembling a robust used market - it will be slim pickings in those areas for awhile until the volume numbers are up on the Bolt and other competitive EVs.
 
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