Do you wonder whether buying a used electric vehicle is a better way to go than stepping up to a new one, or if buying a battery EV of any type is a smarter financial investment than a conventional gas model? We understand the confusion.
Credible studies have landed on very different answers about the total cost of owning an EV, and until now, few have looked closely at what happens when you buy one used. A new study sponsored by the Michigan Department of Labor and Economic Opportunity, the University of Michigan Electric Vehicle Center, and the Responsible Battery Coalition changes that, taking a deep dive into BEV ownership costs in the used market, where about 70 percent of vehicle sales occur. Researchers analyzed 260,000 used vehicle listings in 17 cities, spanning five vehicle classes and a range of charging scenarios. Their conclusion: used BEVs offer the lowest total cost of ownership of any powertrain.
Used Electric Vehicles are a Bargain
The reason is simple. BEVs tend to depreciate rapidly in their early years, and while that presents a challenge for new EV buyers, it definitely works to the advantage of second owners. Over a seven-year ownership period, the study found that buying a three-year-old midsize SUV instead of a new one saves about $3,000 for a conventional gasoline model, $1,000 for a hybrid or plug-in hybrid, and roughly $13,000 for a BEV. For used EV buyers, that steep early depreciation brings a pretty significant financial upside.
We had a first-hand opportunity to experience the used EV buying process following a call from our friend Thomas Rehder, the owner of a Mustang Mach-E. Well-aware of the benefits of driving electric, he was on the hunt to find an affordable EV for his mom, Nancy. Since her daily driving needs were journeys around town, this meant a gently used first generation EV with more limited driving range would be a good fit.
Used Electric Vehicles Fit Many Needs
Success! He ran across an ad for a used BMW i3 REx with 60,000 miles on the clock at a local dealer, its very approachable price of 15 grand a pretty amazing departure from the nearly $50,000 retail cost of this EV just five years earlier. We stopped by the dealer to take it for a test drive, then sent our friend a thumbs-up. He negotiated $1,000 from the asking price and voilà…his mom joined the ever-growing legion of EV owners at a bargain price.
There’s a lesson here, as illustrated by the study mentioned earlier. Those considering an EV but hesitate because it seems too expensive should take note of the growing used EV market. Buying used provides an easy entry into zero-emission driving and is an increasingly popular option as more preowned EVs reach the market at bargain prices. Plus, there’s been a growing volume of lease-return EVs hitting the used vehicle market since a high percentage had been leased to take advantage of the popular $7,500 federal EV incentive.
Finding a Used Electric Vehicle
Finding a used EV can be as simple as running across a friend or neighbor who has bought a new EV and is selling their old one. We’ve done that very thing with a 2015 Fiat 500e we ran across during our daily drives and snapped it up. Beyond that or keeping an eye on local dealers’ lots, you can do a Google search using keywords like “buy a used electric vehicle.” You’ll come up with loads of car buying sources like Cars.com, AutoTrader, TrueCar, CarMax, and others. Then start browsing. You will find listings from across the country but try to stay local or regional if possible so you can check out prospective cars in person without having to travel or buying sight-unseen.
You can learn a lot from a visual walk-around and test drive, and even more by having a local mechanic check out a prospective buy. Most mechanics aren’t qualified to analyze an EV’s electric drivetrain, unique electronics, and battery, though they can assess its overall condition and conventional operating systems. With a VIN (vehicle identification number), services like CarFax and AutoCheck can provide detailed information on a vehicle’s history and whether it has been a rental or in accidents. Recurrent, a trusted battery analytics company, can also use a VIN to provide information on a used EV’s battery condition and projected range.
Used Electric Vehicle Deals Abound
How good of a deal can you get on a used EV? We did few quick searches that revealed a 2023 BMW i4 eDrive40 with 29,000 miles at $32,000, a substantial $25,000 savings from the model’s original $57,000 price. An even more dramatic savings was presented by a 2020 Jaguar I-PACE HSE with 43,000 miles at $22,000, a savings of $60,000 from its $82,000 retail cost just five years earlier. We also ran across a 2019 Chevrolet Bolt EV LT with 51,000 miles at $11,000, a savings of $25,000 from its original $36,000 price, and a 2022 Nissan LEAF at 40,000 miles offered for $12,000, some $18,000 less than its $30,000 cost when new.
Financial incentives have been important to new electric vehicle purchases for years and more recently for used EVs, though there’s never a guarantee that incentives of the past will be available at the time you’re considering a purchase. That’s the case now since the federal incentive for used and new EV purchases has ended. Still, be sure to check if incentives are offered for the used EV you’re considering from regional, state, and federal government entities, along with your local electric utility and air quality district. Happy hunting!