The used EV market is doing no favors for sellers wanting to recoup what they originally financed them for.
Dave Ramsey personality George Kamel recently took a call for help from a Californian who’s struggling to crawl out of over six figures in debt, largely due to a $62,000 electric Kia he financed two years ago.
His electric Kia surely isn’t helping his situation because, since he financed it, it’s dropped over 60% in value in two years!
Check out Kamel’s call below.
As the caller states, he’s, in total, over $105,000 in debt on a salary that sees him net $96,000 annually after taxes.
One of his largest bills seems to be attached to this $62,000 electric KIA he financed for in 2022.
The Kia in question?
A Kia EV6, an electric crossover from Kia that now has a starting MSRP of around $44,000 today.
“I’ve been trying to get rid of this KIA for the longest time. Even if I sell it to a private party, I’ll only maybe get about $22,000.”
And, there’s nothing technically wrong with his EV6 as it only has about 30,000 miles on it.
What this caller said is true.
A search on Cars.com reveals that used 2022 Kia EV6s go for between $25,000-$30,000 depending on mileage and condition.
This isn’t even endemic to this particular electric Kia, but is plaguing almost all fairly new, used electric cars on the used car market.
According to a report from iSee Cars, the KIA EV6 is one of 8 EVs that lost over 28% of its value in the first year, depreciating 33.6 percent to be exact.
Yikes.
There are many reasons why EVs depreciate so fast but, in short, since the demand for new EVs is falling as of late, prices for newer EVs are dropping too, to meet demand.
Not helping this is the EV Kingmaker Tesla slashing prices across many of its popular models by thousands. These large swings in prices influence other EV automakers.
In addition, used car shoppers are just nervous about plopping down thousands on a used EV with horror stories about the cost of a replacement battery, especially when you’re out of the warranty period.
As for our caller, he threw out, without saying, filing for bankruptcy to reset.
But, as this is a Dave Ramsey show, they advised against that, found out he can throw an additional $1,500 a month at his electric Kia payment and, if he found a way to make an extra $2,000 a month net take home pay, he’d be debt free in a little over two years.
Take this electric Kia buyer as a cautionary tale, if you finance one, be prepared and willing to accept a large depreciation hit in just a year.
If your finances go south, the extracting a large chunk of what you financed for will be nearly impossible.
The two years old Kia is more expensive than my 2023 Model Y. I think it might be the high interest rate on financing his car loan and maybe he didn’t put any down payment.
Best of luck.