What to Know Before Buying a Used Electric Car

Buying a used car be a challenging experience, and buying a used electric vehicle is no exception. Since EVs are relatively new entrants into the vehicle market, most EV sales are of new vehicles—unlike gasoline cars, of which 76% sold in the U.S. are used.

As the EV market grows, so too will the percentage of used vehicles for sale. Knowing what to look for, and what to avoid, will help you navigate this growing market.

Why Buy a Used EV?

Similar to buying a gas-powered vehicle, buying a used EV comes with potential uncertainties about the prior use and condition of the vehicle, as well as a wide variety of places to make the purchase. But don't let that deter you—there are many good reasons to purchase a used EV.

Sufficient Range

While older electric vehicles have less range than newer models, advances in EV range have leveled off in recent years; manufacturers realize that few people need vehicles with ranges over 200 or more miles. Also, as public EV charging stations become more abundant, “range anxiety” is less of a concern for buyers.

The average U.S. driver drives 30 miles per day, so an older EV with less than 100 miles of range may be all you need to meet your daily or even weekly needs. And if you have easily accessible EV charging, you may be able to charge your vehicle overnight and have it meet your commute needs in the morning.

If you rarely make long-distance trips in a vehicle, you may find it cheaper to rent a gasoline car (or an EV with better range) than to spend more on a vehicle whose greater range you rarely use.

Low Range Decline

Studies have shown that EV batteries lose 15% to 30% of their energy capacity in the first five years. Keep in mind, though, that a small portion of the battery's total capacity is reserved to protect the battery. As an EV ages, its software decreases the vehicle's reserved energy to maintain as much of the vehicle's original range as possible.

Lower Operating Costs

New or used, running a vehicle on electricity is cheaper than running one on gasoline, and the price of electricity is far more predictable and stable than the price of gas. Moreover, as they age, EVs lose fuel efficiency far more slowly than gasoline cars. In one study, a five- to seven-year-old used EV saved owners two to three times more in fuel costs than a new EV saved its owner compared to a comparable, new gas-powered vehicle.

With fewer moving parts than gasoline vehicles, EVs generally require less maintenance and last longer. In that same report, EV maintenance costs were estimated at $0.03 per mile—half that of a gasoline car.

Tax Breaks on Used EVs

Buying a used EV qualifies you for tax breaks from the federal government. The Inflation Reduction Act, passed in August 2022, contains a provision for a 30% tax credit for buying a used EV—with some limits:

• The total tax credit is capped at $4,000.
• The sales price of the vehicle must be $25,000 or less.
• The vehicle must be purchased from a dealer.
• The vehicle must be two model years or older when sold.
• The tax credit can be used only once during the lifetime of the vehicle.
• A buyer must wait three years before using the same tax credit again.

There are also income limitations on buyers of used EVs claiming the tax credit:

• $75,000 for individuals.
• $112,500 for heads of households.
• $150,000 for joint filers.

Fortunately, dealers can apply the tax credit to reduce the sales price of the vehicle, meaning buyers don't have to wait until filing their tax return to receive the credit.

Cost Factors	Used Gas Car	Used EV
Purchase Price	$23,653.00	$20,914.00
Fuel Per Year	$1,434.52	$573.81
Annual Maintenance	$1,017.12	$508.56
Total Cost	$40,814.51	$28,490.59

Tips on Buying a Used EV

In many ways, buying a used EV is similar to buying a used gasoline car: You'll want to know the history of ownership, maintenance, and recalls. You may also want to take the vehicle to a trusted mechanic for an inspection. But as with buying a new EV, there are things you should look for that are unique to buying a used EV.

Dealer vs. Private Sale

You can search all the usual places for a used vehicle, including websites like CarGurus or CarMax, Craigslist, and other for-sale-by-owner locations. But to receive the potential $4,000 tax credit on the purchase of a used EV costing less than $25,000, you need to purchase it from a dealer. A higher-cost vehicle might be better purchased from a private seller.

Check the Range

Before viewing a prospective EV in person, check what the car's original range was when new. If the prospective EV isn't fully charged when you inspect it, the EV's instrument cluster will not only tell you the current range available but the percentage to which the battery is charged. Calculate the current maximum range of the vehicle, then compare it to its original range.

Extremes of hot and cold can affect the car's range by an average of 17% to 41%. This can be more of a factor for a used EV since it's likely to already have a low range. If you live in those extremes, make sure you consider the impacts it could have on the vehicle and your travel.

Check the Warranty

As with gasoline cars, different EV parts come with different warranties. The federal government mandates that EV manufacturers issue a battery warranty with a minimum of eight years/80,000 miles. In California, the mandate changes to 10 years/150,000 miles.

Not all warranties are transferable to subsequent owners, however. Using the vehicle identification number, you can ask the automaker's customer service department to give you specifics about what's covered and what isn't.

Check the Charging Capabilities

EV charging can have a steep learning curve, though once you settle into a pattern, it can be nearly as simple as charging your phone. Make sure that your vehicle comes with charging cables and that you understand what kind of charging connector(s) it has since there is no universal charging port.

Some EVs can support faster DC charging at public charging stations, while others can't. You might also find that your neighborhood has few public charging stations with the kind of charging port your prospective EV requires.

While any EV can be charged with a regular 120-volt outlet, you'll want to buy the right kind of charging station if you plan on installing a higher-speed charging station at home.

Consider End-of-Life

People who change cars frequently consider the resale value of a used vehicle before they purchase it, hoping to get as much money back when they sell it.