If you’re in the market for an electric vehicle, should you consider a used one? A used electric car might seem like a good idea for shoppers who don’t want to buy a new model.
What are the benefits and drawbacks? We’ve listed a few of each to help you decide whether buying a used EV or a new one works best for you.
Are There Tax Incentives for Used EVs?
As of January 1, 2023, used electric vehicle buyers can claim a tax credit of up to $4,000 if purchased from a licensed dealer and the car costs $25,000 or less.
It’s widely known that car shoppers who choose a new electric vehicle can take advantage of various tax incentives, including up to a $7,500 federal income tax credit.
Some states also offer additional state income tax credits, with a few generous ones even coming close to the federal figure. That can help make it a lot cheaper to buy an electric vehicle than what the MSRP suggests.
RELATED: Should You Buy an Electric Car or a Plug-In Hybrid?
How to Find the Electric Car Perks
However, used EV buyers can still take advantage of some perks on a state level. Some states offer cheaper EV registration, carpool lane access, and a tax credit for installing an electric car charging station in your home. Some cities even give free municipal parking to EVs.
Although you might not get help from your local or state government when buying a used EV, some power companies offer rebates as a reward for contributing to reduced gas consumption. For example, Edison International offers a Clean Fuel Reward Program for new and used EVs and plug-in hybrids. You can go on their website and confirm your eligibility, fill out a form, and get up to $4,000 back.
This specific offer only applies to Southern California Edison residential customers. But a few other programs like this could be in your area and would be worth researching.
However, for some shoppers, the lack of a tax credit isn’t necessarily bad. After all, if the purchase price of one of these vehicles comes in low enough, buying used may still save a lot of money compared to buying new, even if you factor in the lost tax savings.
Shoppers who don’t live in a state with many tax incentives may not see much difference between new and used pricing.
Do the Batteries Need to be Replaced?
Another issue many drivers get concerned with: battery life. More specifically, many drivers are worried about whether they’ll have to replace the batteries in an electric car — an unfortunate reality that could lead to a bill of several thousand dollars.
The short answer is that an electric vehicle’s batteries will eventually need replacing. However, it’s unlikely that you’ll be the one replacing them unless you keep the car for many years.
The battery is likely to last well over a decade — and since the first Nissan Leaf models came out in 2010, that means even the earliest batteries will need replacement a decade later. Batteries that fail prematurely get covered by most EV warranties, typically lasting up to 10 years.
RELATED: 6 Things to Know About Batteries in Used Electric Vehicles
What is the Resale Value of EVs?
The resale value of EVs is generally below average. Electric and plug-in hybrid cars depreciate faster than the average gas-powered car, which is good news for used car shoppers. But it’s bad news for car buyers who paid a lot for a new EV without a lot of help from their state government.
However, newer, longer-range EVs like the Tesla Model 3 hold their values better than earlier examples of electric cars with lower range numbers. If a used electric car gets more than 200 miles of range, the vehicle will likely hold its value better.
As of this writing, it’s challenging to find a used electric car under $10,000 due to tight inventories. But, when you raise that budget to $15,000, you’ll likely see more options.
So, setting a pretty modest used car budget can get you a nice, modern electric car with plenty of life left in it. You won’t get a tax credit on your used EV, but the purchase price of used EVs is generally low enough that it doesn’t matter. Not to mention what you’ll save in gas money.
Will the EV Lifestyle Work for You?
If you’re shopping for a used EV, there’s a good chance that means you’re making the big switch from a traditional gas-powered car to your first EV. Unless you’re going with a plug-in hybrid also powered by gas, the big EV switch requires a lifestyle change with a few things to consider.
RELATED: Electric Car vs. Hybrid vs. Plug-in Hybrid Car: Which is Best for You?
- Range anxiety. While a concern, going the distance is constantly being engineered away in new EVs with extended range. But if you’re shopping for a used EV, you will want to think about range. Some used EVs offer a range as low as around 100 miles. So you need to ask yourself, would you be able to use a car that can’t travel beyond 100 miles at a time? This requires a little homework on your part to determine how much range you realistically need and which used EVs can provide that range.
- Charging. Where to plug in your electric vehicle is another consideration. Do you have a garage where you can keep your car plugged in when at home? Can you use a regular outlet to meet your charging needs, or will you need to install a faster Level 2 charger? Most used EVs can get a full charge overnight with a traditional 120-volt outlet, but a more sophisticated Level 2 charger can significantly reduce charging times. If you live in an EV-friendly city with many public charging stations or if your employer offers some charging stations in the parking lot, those perks can go a long way in making EV life more convenient.
Should You Buy a Used Electric Car?
Between the affordable purchase price and the amount you’ll save in gas by switching to electric, a used EV brings a pretty strong value proposition as long as you can handle the necessary lifestyle adjustments for EV life. If you’re concerned about battery life, we suggest not worrying about it just yet unless you’re looking at very early EVs that are 10 years old; most batteries have years of life left in them.
As for frugal shoppers interested in buying an EV to save money: Before signing the papers on a used EV, check your local tax laws, and check out new EVs on Autotrader. If your state has significant EV tax incentives, you might be surprised to learn that a pre-owned model can cost about the same as a new one. Find a used electric car for sale
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Editor’s Note: This article has been updated for accuracy since it was originally published.
What if you buy a used but never titled plug in hybrid? I purchased a Federal Government Surplus (Auction) (GSA) vehicle. Since it was never never titled in CA or anywhere, am I entitled to the full tax credit? Anyone know who to ask?
If you want to test the waters of EVs, find a used Mitsubishi i-MiEV (or, in Europe, Citroen C-zero or Peugeot iOn – all the same car). They are very cheap – 2011 ones are going for as little as UK£7k form dealers sill with a years drive train warranty! – and extremely accomplished vehicles. Mine is showing 0% battery degradation after 11k miles. It is very comfortable with excellent head room and easy to get in and out of, 4 proper seats + a half decent boot, very nippy, is well equipped, costs virtually nothing to run and will happily cruise at 70mph+ (top end is around 84) but only for about 50 miles at that speed (70 miles at a steady 50mph). I do 45 miles round trip every day on half and half dual carriageway/local roads (with heat enough to keep the windows de-misted) and have about 30 miles remaining. £0 road tax, free parking in some bits of central London, £0 congestion charge… What is stopping you?
That really does seem great, but I would still be held back because of the range thing. It would be nice to be able to afford and have the room to have one car for commuting and another to use for the frequent trips I need to take. I would have to recharge at least once just to get up the road to Birmingham (if I were prepared to annoy everyone else on the M1 by doing 50mph) and I would arrive there nearly out of charge again.