Does it Make Sense to Buy a Used Electric Car?
At a glance, there are over 21,000 used electric cars for sale in the US right now that are newer than 7 years old (typical age to let you qualify for a car loan), but is it worth buying them? I took a look at used EVs available for sale for under $25,000 and believe if you are looking for a car with more than 100 mile range, it is not worth it buying a used EV. Lets dive into why:
What is the state of the used car market for electric vehicles?
At the time of this article, there are over 21,000 used car listings that I found on a leading car search website. However, only 2,600 of those are less than $25,000, which is just under the average price of a used car. This is not surprising as many of the brand name EVs being sold have MSRPs well above $50,000 and production on anything that is not a Tesla has not ramped up until the past 2 years - not giving cars enough time to depreciate into a more affordable area.
What are the cheapest used EVs on the market?
When looking at the low end of the market, there are a lot of options that have less than 100 miles of EV range. This includes cars such as the first generation Nissan Leaf, Fiat 500e, BMW i3, Chevy Spark, and the VW e-Golf. These cars can be found for under $12,000 and offer very affordable options for people that know they will not be driving a lot daily and have easy access to a charger. This can be a great option for someone who has a short commute or someone that maybe uses their car for short travel, such as Uber Eats or other services.
What are some options for EVs with over 150 miles of range for under 25k?
Some of the newer generations of EVs were able to significantly improve their performance and range. The Nissan Leaf models from the past several model years are now able to get up to 226 miles of range and the newer BMW i3 is also over 150 miles. Chevy Bolts from the 2020 and up are also able to offer over 250 miles of range. However, those cars on the used car market are typically in the $17,000 to $24,000 range - making them not as appealing when you compare them against a new car. A brand new Chevy Bolt starts at $26,000, and that includes 260 miles of EV range - and after the federal tax credit the car is basically the same price as buying a used model.
Why does it make sense to buy new instead of used when it comes to EVs?
When looking at the used market for EVs, if you are not in the sub $15,000 range and want something that has more than 200 miles of range, looking at new cars that are eligible for the $7,500 tax credit makes the most sense. Many of the used models are 2020-2022 models that cost basically the same as a new car after the tax credit, especially with Tesla puting pressure on manufacturers to lower their prices. Looking at cars such as the Hyundai Ioniq5, Chevy Bolt, VW ID.4 or the Nissan Leaf. You will also have flexibility to negotiate price at a standard dealership unlike non dealer manufacturers like Tesla or Rivian. The premium you pay over the used car market is worth it with typically lower rates on loans, longer warranty coverage, the latest technology, and longer battery life.