Why auto retailers may find used hybrids to be viable option
Say you have a used-car shopper who is both price-conscious and cautiously approaching fuel efficiency.
For an auto retailer, a plug-in hybrid may be the route to entice that consumer and help ease them into the alternative-fuel market, if data from CarMax is any indication.
Amid high gas prices earlier this year, CarMax found that searches for “plug-in hybrid” on the used-car retailer’s site in June were four times higher than the number from January 2021.
That peak in plug-in hybrid search traffic is part of what CarMax said is “significantly” growing popularity in the segment on its site during 2021 and 2022.
“Plug-in hybrids, well-liked for their convenience of having a conventional engine and a supplemental battery, may be a gateway for consumers as they consider purchasing alternative energy vehicles,” CarMax said in this report Monday.
Using its own sales data, the company measured which used plug-in hybrids had the most sales between March 1 and August 31 of this year.
Of the 10 best-sellers, three were priced below the average price on an internal-combustion engine vehicle at CarMax during the March-August time frame ($28,853).
Those were: the Chevrolet Volt, which was the second-best seller and had an average price of $22,172; the Ford Fusion Energi PHEV, the No. 3 seller and priced at $23,006; and the Toyota Prius PHEV, the ninth-most popular vehicle and with a price of $19,532.
Overall, average prices on plug-in hybrids during from March-August were $29,979, with hybrids at $29,479
Electrics were at $44,944.
“This is good news for used cars shoppers interested in potentially saving at the gas pump and dipping their toes into alternative energy vehicles like hybrids and plug-in hybrids,” CarMax said in its report.
Another selling point for hybrids, in general, is their low depreciation rates
According to data from iSeeCars.com, the value of a 5-year-old vehicle in 2022 is down an average of 33.3% from its original MSRP.
The company determined that number after analyzing more than 3 million sales of 3- and 5-year-old used vehicles this year.
While that 33% five-year depreciation rate is strong in and of itself (iSeeCars says that’s a 17% improvement year-over-year improvement), hybrids are among some of the better-performing segments in terms of low depreciation.
Their average depreciation after five years is 28.8%, which beats the industry average and segments like EVs (44.2%), small SUVs (29.1%). midsize SUVs (39.9%) and full-size trucks (31.8%).
They trailed small cars (24.2%), sports cars (22.6%) and midsize trucks (20.5%), according to iSeeCars.
“Hybrid vehicles are popular among consumers who want to save on gas without worrying about range anxiety,” the company said in this report.