The Used EV Market Is Shifting Gears

By: James Flippin · July 25, 2023 · Reading Time: 3 minutes

Secondhand Voltage

For years, the only way to get an electric vehicle was to buy one brand new. Now, drivers will find out if lightning can in fact strike twice.

As the electric vehicle industry matures, more EVs are finally starting to hit the used car market. This will likely be key for broader EV adoption, since Americans buy more than twice as many used cars as new ones.

For aspiring EV owners, the surge of used EVs means you may now be able to buy one at a cheaper price point — especially if you take advantage of the federal tax credits available.

Plug Into Savings

Early EV adopters have started to trade in their electric cars for newer models. Dealers sold more than 40,000 EVs in Q2, surging 36% year-over-year and 77% from two years ago.

On average, these gently used EVs are selling for $41,630. Meanwhile, for a new EV, you can still expect to dish out around $55,000 — which is actually down slightly since the end of 2022.

The $10,000+ price drop isn’t the only benefit of buying an EV secondhand. Many used EVs are eligible for a federal tax credit of up to 30% of the purchase price, capped at $4,000. In order to take advantage, you must buy through a registered dealer, not a third party.

Uncharted Territory

If you’ve been toying with the idea of getting an EV, now could be the perfect time to pounce, but there are some considerations you’ll want to keep in mind.

Since the technology is still new, it’s unclear how long the battery on a used electric vehicle will last. According to experts, EV batteries tend to degrade by around 2% to 3% per year. Fortunately, EV batteries have held up far better than expected. So far, most have outlasted the typical eight-year warranty. Still, being a relatively new industry, it’s a relatively small sample size.

If you’re shopping around for a good deal on a new set of wheels, the EV section may be worth a visit. Just be sure to have your vehicle examined by a third-party mechanic before committing to a purchase — a good practice regardless of what powers the engine.

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