Dealer Has Concern Over “Enormous Amount” Of Incoming Used Nissan LEAFs

MAY 12 2015 BY ERIC LOVEDAY 61

An estimated 25,000 off-lease Nissan LEAFS and Chevrolet Volts will flood the used car market throughout 2015 and this has some dealers concerned.

Kaylee Morrison of Hayward Nissan stated:

“I hope they trickle in.”

Usually, dealerships are eager to get back these off-lease cars, but Morrison seems to imply that’s not the case with the LEAF:

“Are we going to be able to sell this enormous amount of used Leafs when there are so many incentives to buy the new ones?”

Well, if priced right, used LEAFS will sell.

We quickly checked the used LEAF inventory at Hayward Nissan at time of writing.  The results show exactly 0 used LEAFs available, so perhaps the flood hasn’t begun or maybe moving used LEAFs is easier than Morrison suggests.

*UPDATE: There are now 6 used LEAFs on the lot.

Our Search Of Hayward's Pre-Owned Inventory Foun 0 Nissan LEAFs

Our Search Of Hayward’s Pre-Owned Inventory Found 0 Nissan LEAFs

Source: News video at WPRI

Categories: Nissan

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61 Comments on "Dealer Has Concern Over “Enormous Amount” Of Incoming Used Nissan LEAFs"

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Robb Stark

Any car priced right will sell.

e.g. an ELR at $50k.

Boris

Yes, any car with negative margins will sell. Good for customers, not good for Nissan…

Ocean Railroader

I really think them cutting the prices on the Spark EV and the ER are not turning those cars into unprofitable cars.

The reality is the gas version of the Spark is only $13,000 to $14000 in a lot of areas. The EV’s when they were new were priced way to high.

x

Not necessarily.

Any in-the-least desirable car may sell.
Would you buy a chinese (they have dozens and dozens of brands you’ve never heard of) equivalent of Ford expedition with a mileage of 10 mpg or so ? Come on, for only 100$!
Just an example.

I would not buy a new ELR , not for 20.000$. Really not even considering. Maybe , maybe if I knew I could re-sell it immediately but not for driving it. I would probably buy a M3 for 35k though.

perceived quality, fuel and maintenance costs, re-sell value, etc.

Chris O

Yes they will have to compete with new cars that are available with incentives but the used cars were once sold at a lower price after incentives too so a lower used value doesn’t reflect high depreciation

Brian_Henderson

While some dealers will not like seeing used EVs, other dealers will jump at opportunity to sell to an EVer expanding market.

Even with new EVs some dealers are much more successful at understanding their customers and the market than other dealers. Just because a higher volume use EV market is fairly new doesn’t make it much different from other used vehicle markets.

Some dealers will complain, and some dealers will sell used EVs … buyers will visit the later.

Tim

The problem is how the lease companies accounted for the federal tax credit. The book value of any returned EV is inaccurate by about $7500. Once you take that amount out, you get to true value that people are going to be willing to pay.

MTN Ranger

I’m sure they will be priced accordingly. My 2012 Volt had a payoff price of $28,500 at lease end. Two weeks after I turned it in. The dealer had it initially priced at $18,499 and then a week later at $17,999 and it sold.

Lou Patrick

Valid point! Bought a used 2012 Volt for $17K in October. 21K mileage, very clean, base model. Worth $17K, fair price and I am sure everyone involved was happy with the transaction. If the dealer prices the car correctly(and was not foolish enough to overpay at auction)these cars will make them money. Difference between a Volt and a LEAF is that the LEAF will come with questions about battery capacity after the 3 years it was on the road being leased. Might still be the ideal used car for someone, but it will affect the value. I’d consider a low mileage used LEAF, fully loaded(except I cannot afford 2 car payments,yikes!)

Stan

The difference between what the leasing company was expecting and what they eventually got was probably around 10.000 based on those numbers. How can they make a profit out of that ?

liberty

That is just wrong. The car company and financing company worked together to get a low lease rate. These leases had fake high residual value. Both nissan NMAC it’s financing company new these paper losses would occur. They are just that paper losses, because nissan on the leaf, and chevy on the volt wanted customers to turn these cars in at the end of lease, and wanted to pretend the ones they sold would depreciate less. It is nissan and chevy out the money, which they had planned for, and not the car dealers. The other people out are the people that bought instead of leased in the first couple of years before price drops.

Gsned57

The question I would have is how many battery bars has the leaf lost. Looking at cars.com you can pick up a used leaf with only 30k miles for 10-12G. An imiev with only 10k miles for 8 grand. The volt actually seems to be holding value a little better and to get one under 15 grand you need to accept 80-90000 miles. Maybe that’s fair since the volt is thermally managed and will probably go 200000 miles without issue.

kdawg

I always wonder how used Volt sales go. If it has 50,000 miles, you would rather it have low EV miles, low gas miles, or a 50% mix of both?

Bonaire

Lower electric miles. Fewer battery cycles means it will have more future battery cycles available for the new owner.

Lensman

Well said. People buying a Volt do so because they want to be able to drive without using gas. Performance (and range) as an EV should be a lot more important than performance as a gas guzzler, at least for most drivers. I’m sure you can find exceptions, of course, but hopefully those are rare.

Mike777

Chevy was so conservative with that battery it doesn’t matter if the first owner used it only in EV mode.

Nix

I even remember one used car broker who specialized in finding Volts with low electric miles, and reselling them at a premium.

This usually happens when a Volt is leased for an employee, and the company can’t/won’t compensate the employee for electricity, but will compensate gas receipts. A waste of a Volt, really. But a good find on the resale market.

Dave K.

It’s an interesting question, at some point Nissan will sell it’s 200,000 cars and the tax credit will go away, at that point a used Leaf becomes $7,500 more valuable. Except some other OEM still has cars with tax credits available so people buy those instead. I’ve heard some of the used Leafs are being exported to places with no tax credits, makes sense…

wavelet

Outside the US, you mean?
That sounds unlikely, because different countries have different homologation requirements, and it’s usually non-trivial to certify a car for another jurisdiction. Not to mention, actual overseas shipping of a car is fairly expensive.

turbofroggy

Almost all used Leafs from Washington State end up in Canada.

BravelilToaster

Exactly. It’s actually not overwhelmingly hard to import cars from the US to Canada, and many dealerships specialize in doing just that because *all* cars sell for more in Canada than in the US.

Lou Grinzo

This is an issue I’ve been talking about for months, especially in the context of improvements to the Leaf. If we see increased battery range for the 2016 model, available in Sept. of this year, as many have surmised, then prior year used Leafs will suddenly be much less attractive. Even if that bump in range doesn’t appear, we’re surely going to get a big (bigger?) increase in 2017 when the Leaf 2.0 comes out.

This is why I’ve been referring to 2017 as the year of the EV Singularity. We’re getting close to a step-change in the range and value proposition of EVs, and it presents some opportunities (mostly for customers) and some challenges (mostly for car companies).

David Murray

Yep. Right Now (and the next couple of months) is THE time to buy a used Volt, and the next year or so will be great for Leaf buyers as well. The prices are unbelievable.

RS

That can’t be I just looked at the site, there are 6 used Leafs now. And it is 1 hour later. Ether you made a mistake, or there where 6 incoming in 1 hour. If that rate continues, next week this dealer will have more than 1000 Leafs 😉

Mark C

I’m really curious if Nissan or some aftermarket manufacturer will offer a retrofit pack of slightly greater capacity at some point in the not too distant future. It would take much of the downside worries of buying a used Leaf and replace it with confidence that IF it winds up needing a replacement pack, you wouldn’t have to sell yourself into slavery to buy one. {I know Nissan offersa replacement pack for $5500 exchange + labor & $300+ for early models upgrade kit.}

speculawyer

+100

It is a nice car but the ability to retro fit a 150 mile range pack would make it a much easier sell.

Lensman

A few years back there was at least one company, maybe more than one, selling upgrades to convert the Prius into a plug-in hybrid. (That was before the debut of the Prius Plug-in.) So I suppose there will be enough market demand for some company to offer third-party battery packs for used Leafs, Volts, and perhaps other EVs. I haven’t seen anybody mention one yet, though. Perhaps we’ll start seeing that when at least some Leafs and Volts are old enough for an 8-year warranty to have expired; that will be in 2019 (well, technically December 2018).

Jack

In my area, Nissan dealers are dumping off-lease LEAFs to auction as soon as they come in. They aren’t even bothering trying to re-sell them. So, with the exception of off-lease specialty shops, the number of used LEAFs is near zero. This doesn’t mean that a whole bunch haven’t arrived. They just have never been put up for sale, locally.

Sublime

I talked to the guy that deals with lease returns when I turned in my ’13 LEAF. On all lease returns, the dealer that takes them back gets the first crack at them, but the price Nissan is putting on them is insane. It was about $21k on my lease return and just a quick AutoTrader search in my area reveals that ’13 LEAFs are going for around $12k – $14k. So it’s not surprising to me that the dealer doesn’t have much inventory, it’s in their best interest to just return them to Nissan and pick them back up at auction if they want them (where I’m guessing they’re going for $10k – $12k based on used car lot prices).

David Murray

That’s basically what my dealer told me when I turned in my Leaf. They just let it go to auction. And I don’t even think they are buying them at auctions either because the prices are so low it probably would make it tough to sell a new Leaf on the same lot with one that is so much cheaper sitting nearby.

Bobby sweet

They should replace bad battery cells and sell them with the warranty

tedfredrick

I am in the market for a new car in about 6 months. I am hoping to pick up a used Leaf with about 40K for $8000. We will ses how that goes.

Nix

cars.com shows 3 Leafs for sale right now with around 40K miles at $8,999.

I’d say your chances are fairly decent by the end of summer, depending on your local market.

Ocean Railroader

This is some really good news for me trying to be a first time EV buyer maybe I will get lucky and see a $6000 i-miev or a $7000 with quick charging.

kubel

These all go to auction as soon as they come in anyway. I’m not sure why dealers are concerned. They have the choice to keep returned leases, they aren’t forced to. This is NMACs problem, not the dealers.

Koz
Would be interesting to see how this is affecting NMAC’s (and perhaps Nissan’s) books. Nissan may have back stopped the residual on the leases. Regardless, there are huge losses to absorb since used Leaf’s have small value in the market just as new ones would with no undervalued lease options and federated tax credit. The limited and relatively rapidly depreciating range significantly reduces the small subset of buyers for new Leaf shoppers and doesn’t leave many buyers for used ones. Creates a great buying oportunity for those that need confidence in 40ish miles of range on a regular basis or 80ish for those with access to appropriate charging on both sides of their travel. The Volt’s issues are different. Usable battery capacity is depreciating much slower and it is much less significant to the functionality of the car. Any Volt resale issues are from the tax credit and lack of understand in the general public of how Voltec functions. I expect Volt resale to strengthen over time. One of the things GM should be doing if they were actually committed to maximizing plug-in sales would be to market the longevity of the Volt’s usable battery capacity. Would help new buyers… Read more »
Alan

With Battery costs coming down rapidly, energy density about to rapidly rise over the next 12 months or so, anyone who is thinking of buying a second hand leaf would be wise to hang on IMO.

Bonaire

Well, For $10K, a used leaf sounds fantastic. In 5 years, buy a new battery pack and it’s good to go.

Alan

That’s true but I’m not sure that after 5 years and say 13K spent on a 7 year old leaf would represent as good value as waiting 12 months and pay 25K for a new one with 200 mile range ?

I could be wrong of course !

Ocean Railroader

I do have plans of upgrading the batteries on a existing electric car right away to raise the range if I get a used one. But that would depend on if I’m owning the existing car and I get a new job that requires me to drive farther then the cars range or if the number of quick chargers don’t grow fast enough or if the quick chargers are over priced. Also it would depend on the cost of the new batteries. Such as if the new batteries are $3000 it’s possible but if the new batteries are $10,000 I would get a new car but it all depends.

Alan

My point being that with the introduction next year of Mitsu’s 200 mile graphene battery and no doubt Nissan’s 200 mile battery vehicles, the price of second hand Leafs will drop even further, possibly by another 3k making them very attractive for second car runarounds ?

Ocean Railroader

Could you add a link to Mitsubishi 200 mile range EV battery?

Jeff Songster

The used market for these cars is what should help propel them into alot of homes that have always wanted but couldn’t afford them originally. This is where they become optimal second cars and local runarounds. Got a student learning to drive to local classes and work… get them a used leaf. They will love recharging for free at home.

The place to buy them is at the local auctions. Just start them to make sure the battery wasn’t too abused and look for signs of floods on the underside so you don’t get stuck. Getting a lightly used iMiev or Leaf for under 10k would be great.

BravelilToaster

The funny thing about Leafs intended for use as a “second” car is that they almost always turn into the *first* car, with the gasser being used as “a backup, if absolutely necessary”.

People are always surprised by just how much you *can* do with what they thought was a severely range-limited car. It’s totally not.

Scott Franco

And an economist would say:

The cars were artificially boosted in price by by government subsidy. At $15,000 (average cost for a used leased leaf), they are priced too high, and the used cars don’t have a subsidy.

A classic example of government price manipulation.

alain

your a slave just like i i’m to the det money system (give me a break from Bs please)
all money is det money

Lad

There will be a fair market for used Leafs when Nissan, or an aftermarket company, addresses the replacement battery issue. Right now Nissan seems satisfied with offering a replacement for $6k and letting their used EVs float.

Tesla has addressed the issue with a certified pre owned process and is managing used model S prices and values.

The purchase of a used Leaf may prove to be a good decision in the long run, if someone offers a battery upgrade at a fair price. The $6k price for a replacement battery by Nissan ain’t it.

Mister G

Will a 2012 Leaf become a collectible antique in 30 years?

Scott Franco

It will be like all the other appliances in my garage with special rechargeable batteries that the original manufacturer no longer makes replacements for.

Only way bigger.

speculawyer

Don’t know if they will trickle in but they will definitely trickle down. This is a great way for people of lesser means to get into the EV market. Finally, a real useful trickle down economics.

Nix
+10 This is a prime example of the Federal Incentive effectively becoming available to car buyers who have incomes well below the Median New Car buyer’s income. This was actually a planned Feature of the program from the start, by design. This program could have been done by simply handing millions of dollars directly to car makers to subsidize their EV programs (that’s what they lobbied for). But those funds wouldn’t have had this same effect. Those incentives likely wouldn’t have been passed directly through to even first purchasers, much less passed through to second purchasers. This is vindication of how the program was designed. It successfully is getting EV’s into the hands of middle class consumers with the incentives being passed through to them. At the same time, it avoids giving incentives to people who can’t afford to buy a new car at all (ICE or EV). This program would have been a failure if the incentive was offered to people who had no business ever buying a new car at all. It would have been a disaster if there were lots of repo’s, and a bunch of people telling antidotes of how EV’s ruined their finances and drove… Read more »
Nix
1) Dealers don’t actually take ownership of lease returns when you return that car to a dealership at the end of the lease. The car is still the property of the leasing company, and the dealership is simply acting as their agent. The dealership isn’t forced to take ownership just because it was returned to them. 2) The dealer may or may not have first right of refusal to purchase the car from the leasing company. But ultimately it would be 100% Hayward Nissan’s choice as to how many lease returns they choose to purchase. Again, the dealer isn’t forced to do anything. 3) All other off-lease vehicles will be offered at auction. This may be through dedicated franchise-only auctions, where only Nissan dealerships are allowed to bid, or through public auction. Either way, if Hayward Nissan chooses to buy these vehicles, that is their choice. Nobody is forcing them. This sounds like more traditional ICE car dealership whining/pushback against EV’s that we’ve seen over and over. This is the exact reason why Tesla doesn’t use traditional ICE dealerships. We have a Nissan dealership publicly driving down the used price of EV’s with their comments. I can’t imagine them doing… Read more »
Lensman

Nix said:

“This sounds like more traditional ICE car dealership whining/pushback against EV’s that we’ve seen over and over. This is the exact reason why Tesla doesn’t use traditional ICE dealerships.”

That’s what my interpretation is, too. A traditional dealership whining about being “forced” to deal with EVs, even though there’s nothing to compel them to handle them if they don’t want to. But rather than just admit they simply don’t want to sell or service EVs, they try to shift the blame to the cars.

Mike

the residual on my Leaf after 3yr/15K miles per year is $11K – which sounds about right for a 3yr old Leaf.

Larry

The residual value on MY 3-year-old Leaf was $16,839. The fact that it was driven only 6,500 miles/year does not affect that.

Cavaron

Why not lease them another year with a lower fee? They are cheap in maintenance, could be a moneymaker for the dealers.

Or retrofit them with the 150 mile battery, this will fix the price…

Lensman

It seems unlikely that any traditional auto maker would provide an upgrade battery pack for older cars, which would undercut their market for new cars.

Now, Tesla might do that; it is planning to do so for the Roadster, altho quite possibly at a boutique price.

tom911

420 Leafs at auction this week.

2013 SL- average condition – 18k miles = $12K wholesale
2013 S- average condition – 17k miles = $9.3K wholesale
2012 SV – average condition – 22k miles = $8300 wholesale

Mike777

So, where are they being sold once the are bought at auction???

Lensman

I once went to one of those auctions, but I had to go with an agent for a used car dealer to get in. I’m not sure, but I think it’s the usual case that such auctions are not open to the public. As I understand it, the cars are usually sold to used car dealers.

Ryan

Wazata Nissan in Minnesota is selling BOATLOADS of used Leafs… call John DiBella