Looming: Gas-Powered Used Car Prices Leveling But Now Everyone Wants an EV
It looks like the crazy used car prices have reached a plateau. That’s the good news. The bad news is that, with the price of gas through the roof, everybody is now considering electric vehicles as a way to once and for all beat the high price of gasoline. So what will that do for the prices of gasoline-powered vehicles now?
When should you get rid of your gas-powered car?
It is inevitable that at some point the demand for ICE vehicles will crater. The trick is to figure out when that will be. We may already be at the precipice of that happening. If that is the case, we’ll be seeing used car prices sinking.
Right now, we have three issues that will inevitably drive the price of used vehicles down. Inflation is the worst it has been in decades, the war in Ukraine means we’ve cut all ties with Russia and their oil, and there is a general shift to EVs. It may seem slower than one would expect, but the momentum is now picking up fast.
JD Power consultants told Reuters that March retail sales could drop by almost 30 percent. But is this from inflation, or is it a lack of demand for ICE vehicles? Has the sudden spike in gas prices finally hit home with consumers?
Will the current conditions kill gas-powered cars sooner?
We can’t say for sure. But until now, what was holding consumers back from diving into the EV zeitgeist was time. Countries and states have set different deadlines for banning ICE new car sales. Most are within 15-25 years. For consumers, that might as well be the twelfth of never.
Normally, any major shift in consumer demand takes a phase-in period. You can’t just sell ICE vehicles until a certain date and then ban them all. But sometimes, outside forces can drive buying habits; such as spiking gas prices. Or inflation. Gas and diesel vehicles command 97 percent of the vehicles on the road today. Inevitably, that will change.
But in the environment we’re in now, if consumers are looking for a new vehicle purchase or a used one for that matter, would they prefer an EV? Probably. So the speed at which EV sales will increase may be starting now.
Legislation and behind-the-scenes want gas-powered car gone
The other thing that is happening behind the scenes is that environmental groups like Coltura, are helping to write legislation that hastens the demise of gas-powered vehicles. It is happening now, in back rooms and board rooms worldwide.
And we have pro-electric vehicle proponents in places beyond legislative backrooms. Our current Secretary of Energy, Jennifer Granholm, is a known electric vehicle advocate. The former Michigan governor is well-versed in the development, manufacturing, and marketing of cars. You have to be if your predecessor’s former headquarters were in the Motor City.
None of us have a crystal ball. But there just seems like there is an energy (no pun intended) around switching to electrification. Whether it is premature or not, it isn’t that far off.