Used Chevy Volt Resale Values
This article was contributed by Gib Goodrich from GMPartsOnline.net, but this is something I’ve been thinking about as well as I may be moving on the next in Volt technology. If you don’t already know, I am looking possibly buying the next iteration on the Volt platform, the Cadillac ELR which I will be following and reporting on straight from Detroit @mycadillacelr or www.mycadillacelr.com
The Chevy Volt has been an impressive success: great ratings and reviews from the automotive press, strong customer satisfaction scores, etc. Yet despite these accolades and a limited vehicle supply, many analysts project Volt resale values will be below-average when compared as a percentage of MSRP.
What’s behind these bleak predictions? Is it an anti-GM bias, or just an overly conservative assessment?
What’s Behind the Volt’s Below-Average Resale Value Projections?
Automototive Leasing Guide (ALG) has been providing resale projects to the auto industry for decades. Most leasing companies use ALG’s projections to determine residual values, and ALG’s resale projections are generally quite accurate.
According to Auto Week, ALG projects that the Volt’s five year resale value will be 38% of MSRP, while the Malibu will be 39% of MSRP.
Kelley Blue Book, which also projects resale values, has given the Volt a 2012 “Best Resale Value” award for having the highest projected resale value of all electric cars. However, according to KBB.com, the Volt’s projected five year resale value will be only 30% of MRSP….which is more than 6% below average. Why?
It’s my belief that these resale value estimates are incredibly conservative – here’s why.
How Can A Used Volt Be 20% Cheaper Than a Used Prius?
The standard 2013 Chevy Volt has a base MSRP of $39,145. If the Volt’s resale value (as a percentage of MSRP) meet’s ALG’s projections, you’ll be able to buy a 75k mile 2013 Volt in 2018 for about $15,000.
Yet when you consider the low ownership costs of the Volt, this resale figure seems very low.
KBB.com’s “Cost to Own” calculator shows that the annual operating cost of the 2013 Volt is $1,978, which is almost $2,000 less than the annual operating cost of a 2013 Prius ($3,870 per year based on 15,000 miles driven).
If one were to buy a 75k mile 2013 Volt in 2018 for $15,000 and drive it for five years, the total cost would be about $25,000.
If this same person bought a 75k mile 2013 Prius sedan in 2018 instead, the initial price of the Prius ($11,000) would be lower than the Volt, but the total five year cost is 20% higher than buying a used Volt ($30,000).
If we assume the used car market is economically rational, demand for a used Volt should exceed demand for a used Prius, as the Volt is considerably less expensive to operate…right?
By this analysis, either the Prius resale value projection is too high, or the Volt’s resale value projection is too low…significantly so.
Is There an Analyst Bias Against GM Products?
As a long-time fan of the GM product, it’s all too easy for me to believe that ALG and KBB.com analysts (and others) are biased against General Motors. For years, I’ve watched Consumer Reports shower Toyota and Honda with recognition while ignoring GM. I’ve seen ABC News run false, slanderous news reports alleging safety defects in GM products. I’ve even heard that our President disparaged the GM product line, asking “Why can’t they just build a Corolla?”
Yet there are some reasons to believe the auto industry is capable of fairness. Motor Trend awarded the Volt “Car of The Year” honors in 2011, as did Automobile Magazine and the Detroit Auto Show. Car & Driver named the Volt one of their 10 Best cars, etc.
Still, when I see that Volt resale value projections are less than the Malibu – or six percent lower than the average vehicle – I can’t help but think the deck is stacked against GM.
What do you think? Is there a bias against GM products?