Used Electric Car

Pros and Cons of Buying a Used Electric Car

Buying a used car has its pros and cons, but what about a used electric car? Modern electric cars have only been around for just 10 years. Since they were first re-introduced to the market, battery technology has significantly improved. So for those looking into a used electric vehicle (EV), is it a good idea? Or perhaps is it better to buy the latest and greatest?

Let’s dive into the pros and cons of buying a used electric car to see if it meets your expectations. 

Pros of Buying a Used Electric Car:

1. Cheaper

This first one is quite the obvious. Buying used can save you thousands of dollars due to depreciation. Depreciation hits the hardest during the first few years then slowly tapers down. For used car shoppers, this is a great time to buy as the car is greatly discounted compared to new, still has relevant features, battery life is good, and has low miles. 

Generally speaking, a five-year-old car can lose around 60% of its value. In fact, some EV models have increased depreciation rates than typical. 

It is believed that because of all the available incentives as well as quickly improving technology, older models quickly become less desirable (though operationally still have lots of life left). 

2. Can’t Take Full Advantage of EV Tax Credit

Many new electric cars are eligible for the full $7,500 Federal EV Tax Credit. Some plug-in hybrids may be less since the tax credit is based on battery size. While this incentive is not available for the customer at the time of purchase, they can claim the tax credit during the following year’s tax season. 

There are two manufacturers (Tesla and Chevy), that have surpassed the maximum vehicle threshold and are no longer eligible for the tax credit. The remaining manufacturers are still eligible for the tax credit. 

In brief, an individual can apply a tax credit to reduce the amount of federal income taxes owed. However, since it is a tax credit and not a tax deduction, you can only take off however much taxes you owe.

For example, if you owe $5,000 in taxes and apply the $7,500 tax credit, you would zero out your taxes for that year, however, would leave the difference of $2,500 on the table. 

Unfortunately, some individuals are not able to take advantage of the full $7,500 Federal EV Tax Credit, therefore, are leaving money on the table. In those situations, it may be financially better to go the used route.

The reason being is that electric cars are generally more expensive upfront than comparable gas cars. However, with incentives (mainly the federal tax credit), the net purchase price is greatly reduced. If the tax credit cannot be fully claimed, buyers should look into the used option. 

3. May Come With Carpool Exemption Stickers

Some states like California offer EV buyers carpool lane exemption stickers. This allows electric cars in the carpool lane without two or more passengers. In densely populated areas like Los Angeles or the Bay Area, this can be especially handy. 

These decals are often good for several years and simply transfer to the next owner of the car. If getting cheap access to the expressway is a priority, a used electric car is definitely something to look into. 

Used Electric Car
California Carpool Lane Access

4. Higher Mileage Doesn’t Necessarily Mean More Maintenance With EVs

A common fear of buying a used car is taking on more maintenance and repairs. This is a logical conclusion to come to since there is more wear and tear on the vehicle than new; however, electric cars require much less maintenance than gas cars. Therefore, while a used EV may have some mileage on the odometer, it may not necessarily mean maintenance costs will be significant annual cost. 

In fact, through the first 100,000 miles, most EVs really just require tire rotation/replacement and cabin air filters replacement. No oil changes, spark plugs, oil filters, brake pads replacement, etc. 

Typical EV Maintenance Schedule
Chevy Bolt Maintenance Schedule
Image courtesy of Chevrolet

5. Let Others Discover Vehicle Errors Before You

Another pro of buying a used electric car is that you can review third-party vehicle reviews, owner’s experiences, and service bulletins. Manufacturing errors and malfunctions are inevitable.

With a new car, these repairs are resolved only after the first group of owners have taken delivery or even after a year or two of production. These kinks eventually get worked out, however, it can take some time for the vehicle maker properly address. 

More importantly, automakers may not even address the issues until the model’s next generation. Therefore, it is helpful to review third-party and existing owner’s reviews of the car to ensure it is the vehicle you want to get.

Bottom line: it may be better to let others work out and discover the vehicle’s problems before you do. 

Cons of Buying a Used Electric Car:

1. Degradation

One of the most talked about components of EVs are battery packs. Over time, batteries lose available capacity. This is known as battery degradation. Over time, the available battery capacity will reduce leaving less range to travel.

For long-range EVs, like the 300+ mile Tesla Model 3, it doesn’t really impact the usability of the car too much, however, for short-range EVs, like the Nissan Leaf with 150 miles, it can quickly change how the car is used. 

Fortunately, auto manufacturers have provided a Thermal Management System as well as a battery buffer to help protect and prolong the life of the battery. Nevertheless, studies have shown the range will decrease about 1% per year. 

Automakers promise today’s battery packs have a useful life until 70% degradation rate. In terms of years, it is estimated the batteries will last around 10-20 years with mileage as a major factor. 

Of course, a used car will have some mileage on the odometer, which means the range might not be as high as when it was advertised as new. It could very well only be a few percent less, however, buyer beware. 

Battery Life
Nissan Leaf Battery Status Display

2. Few/Zero Incentives Available

Unfortunately, there are very few or possibly no incentives available for buying a used EV. Most incentive programs focus on buying a new model. While buying used can save you thousands of dollars from the depreciation, you are likely not going to find many rebates or tax credits applicable for the used electric car. 

It is definitely worth checking with your State, local jurisdiction, air quality district, and utility provider to see if they do have any incentive programs for used electric cars. 

3. Technology Quickly Outdated

Just like with iPhones, buying a used model will quickly become outdated in a few years or perhaps already so. Specifically, two major advancements in EVs that occur each year is range and charging speed. 

Older electric cars will typically have smaller batteries or are less efficient, which means less range. Additionally, older electric cars might only be able to charge at 50 kW while today’s DC Fast Charging stations are capable of 150+ kW (less kW means slower charging). 

These two factors may not be a major deterrent, however, it is important to keep in mind on what you are potentially passing up with a new EV. 

4. Battery Replacement Cost

Time to address the elephant in the room–battery replacement cost. Sooner, but hopefully much later, the battery pack will need to be replaced. While all things have an expiration date, battery packs today are designed to last at least 200,000 miles and perhaps more. 

Most car manufacturers provide a 8 year/100,000 mile warranty for the battery pack. Once the warranty is expired, you are on your own. 

Once the battery fails, it is time for replacement. The good news is that battery packs are made up of smaller modules. When the range or capacity is subpar, replacement of a module or two is sometimes all that is needed rather than the entire pack. 

Hopefully this does not occur until much later in the vehicle’s life. At which point, because EVs can save owners money over time due to less operational and maintenance cost than gas, the savings will be enough to justify a new battery pack or modules. Again, it is currently estimated this won’t occur until the vehicle has some serious miles on the odometer. 

For further assurance, battery prices are continuously falling. By the time a new pack is needed, it is believed it will be significantly cheaper than packs made today. 

Chevy Bolt Battery Pack
Image courtesy of Chevrolet

5. Some EV Models Depreciate Very Little Due Software Updates

Conversely to the previous point that generally used cars are cheaper than new, some EVs have less depreciation than normal. Most notably is the Tesla Model 3. After a few years of production, a few-year-old Model 3 is now populating on used vehicle marketplaces. Strangely, the depreciation rate is staggeringly low. 

Just like with smartphones, vehicle software updates increase various functions such as increased range, increase infotainment options, improved security, improved safety driving features, and more. In essence, Tesla’s software updates make older cars still relevant and have the same features as a brand new car. 

Tesla is not alone with software updates. Automakers such as VW, Ford, and Chevy promise over-the-air software updates to their upcoming EVs. If so, these electric cars should also expect less depreciation than average. 

This is listed as a con for used electric cars because with the available incentives for a new EV and with the reduced depreciation rate from software updates, a new EV can be roughly the same cost for the first few years than a gently used EV.

Closing Thoughts

After assessing the pros and cons of a used electric car, are you now more likely or less likely? It’s quite the tough decision, especially since electric cars are constantly evolving. 

If used is the way you want to go, check out the completely free (and only) dedicated used EV marketplace MyEV.com. They have tons of used electric cars to check out. Most importantly, the website is geared specifically towards EVs. This means it has all the pertinent information you’ll need to review that other online car marketplaces don’t have. 

If new is the way you want to go, check out the complete list of Available and Future Electric Cars. The table includes key metrics such as price, range, and maximum charging rate! Plus, it is available as a PDF by signing up to the email list. Subscribers also receive the monthly newsletter to stay up to date with the latest articles. 

Lastly, for those interested in new or used EVs, but a little intimidated by charging or other EV subjects, feel free to schedule a FREE consultation with us at Charged Future! We are your personal EV consultant that can help walk you through EV basics for the first-time shopper.

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