Used EV prices have been plummeting. Does that make them a bargain or is it a sign to stay far away?
If you check automotive want ad sites you’ll find they’re filled with gently used EVs that have depreciated faster than some of their gasoline counterparts.
As an overall segment, iseecars.com found EVs on average lost 49.1% of their value over five years, which is quite a bit higher than the overall automotive industry rate of 38.8%. Although, even among gas cars depreciation rates are all over the place.
A gas-powered Maserati Quattroporte top the list, losing 64.5% of its value, while a Porsche 911 depreciated the least at 9.3%.
So let’s answer the basic question first, do higher depreciation rates make EVs a used car bargain? In some cases, yes.
Next, let’s lay out why and then some gotchas to be aware of.
For starters, all modern automotive EVs in the U.S. come with an 8-year; 100,000 battery warranty. And, some owners have already put hundreds of thousands of miles on their EVs.
Next, depending on your income and which used EV you pick, it may qualify for a federal tax credit of $4,000.
To claim the credit the used EV has to have a sales price of no more than $25,000 and meet some other criteria. Here’s a link to the IRS page with all the details.
Out of all the questions about used EVs, the one that probably gets asked most is how long will the battery last.
J.D. Power estimates batteries should last 10 to 20 years, with a replacement pack costing $5,000 on average.
Keep in mind that’s just an average. Just like engines; the sizes, types and complexity of battery packs varies. J.D. Power reported it had seen battery replacement costs climb as high as $15,000 in some cases.
The research company found the average EV battery degrades at a rate of 2.3% per year. That means if you have a battery with 300 miles of range, you would lose about 34.5 miles of range in five years.
If you’re new to EVs, also keep in mind they have less range in the winter than during mild weather.
I’m a fan of quite a few EVs, but in terms of specific recommendations, I’ll keep it short.
If you’re looking for a bargain EV, the Chevy Bolt tops my list. Here’s why: GM is doing a big recall to replace the batteries in a bunch of Bolts.
Having a brand-new battery in a new used EV is certainly a big plus but keep in mind, not all of them will have new batteries so be sure to first confirm its received a new battery or whether GM has confirmed it will receive a new battery. Here’s GM’s recall page with additional details.
Since most used Bolts can easily be found for well under $25k, odds are good you’ll also be able to claim that $4,000 tax credit.
Next, two EVs I’d personally stay away from:
- The Nissan Leaf. It uses a charging format called CHAdeMO, which is being rapidly phased out here in the U.S., meaning within a few years you’ll be hard pressed to find a DC fast charger that works with it.
- The Mitsubishi i-MiEV. It had pitiful range from day one and also uses the dead CHAdeMO charging format.
- Finally, I’d stay away from high mileage EVs with expired battery warranties, unless you’re well off and your buying it as a future classic, knowing it will likely face to big repair bills at some point.
While a full battery analysis is beyond the scope of this video, an easy way to get a baseline is to look at the car’s state of charge and its estimated miles remaining.
For example, if the EPA rates an EV at 100% of charge with 300 miles of range and the EV your considering shows 220 miles of range at 100%, that might be a reason to walk away, unless the owner has a good reason for the low range and can prove the pack is healthy.
If you’ve got questions, feel free to drop them in the YouTube comments section of the video at the top of this post.