Hidden Costs of Used EVs: Why Cheap Prices May Not Tell the Full Story

Data suggests that the average used electric vehicle (EV) costs just ~$1,000 more than a comparable used internal combustion engine (ICE) car. However, analysts emphasize that hidden costs—such as components, accident repairs, and insurance—are significantly higher for EVs than for ICE vehicles.

Why Used EV Sales Are Surging

In the past, purchasing a used EV carried risks, particularly for older models. Today, the market is shifting rapidly. A Cox Automotive report reveals that used EV sales in March surged by 27.7% compared to the previous year, with figures 53.9% higher than in February.

Several factors are driving this growth. According to CNBC, experts note that while cheap used EVs may seem appealing, buyers should remain cautious of long-term costs. One key driver is the influx of used EVs returning to dealer lots as leases expire.

Leased EVs Flooding the Market

Joseph Yoon, a Consumer Insights Analyst at Edmunds, explains:

“Where we had the highest concentration of leasing happen was between the tail end of 2022 and all the way through 2023, and since most leases are three years long, all those cars… are coming back to dealer lots in droves.”

This surge means much of the depreciation has already occurred, making used EVs more affordable. In fact, 44% of EVs sold in March 2024 were priced below $25,000.

More Choices, Lower Prices

Previously, EVs were offered by only a handful of manufacturers. Today, the used EV market is expanding rapidly, with a wider variety of models available. This increased competition has driven prices down.

The average price of a used EV in March 2024 was $34,653, according to Cox Automotive. In comparison, the average used gas car was priced at $33,641, signaling that price parity between used EVs and ICE vehicles is within reach.

With used EVs no longer commanding a significant premium, they are becoming more accessible to buyers who have long considered switching but were deterred by high upfront costs.

Costs to Consider Before Buying

While used EVs may offer lower running costs, buyers should account for additional expenses. Charging costs vary depending on the method:

• Home charging: For an average monthly mileage of 1,015 miles, home charging an EV costs approximately $59.66.
• Public fast charging: Exclusively using public chargers increases the cost to $169 per month.

In comparison, a gas-powered vehicle with 30 MPG fuel efficiency would cost $147.24 in gas for the same distance. While public charging is more expensive than home charging, it remains marginally higher than gas costs for ICE vehicles.

However, these figures do not account for other potential expenses, such as higher insurance premiums and repair costs for EVs, which can significantly impact the total cost of ownership.