The electric vehicle (EV) market is experiencing one of its most interesting shifts yet. After years of high prices, limited inventory, and intense demand, a paradigm shift is underway in the U.S. EV market. “Used EV sales are surging“. Cox Automotive’s report, which aims to explore the growth of used EV sales in the country, reports a 32 percent increase in the first quarter of 2023. With that hike in reselling rate, prices have finally been dropping.
As newer models with more advanced features enter the market each year, the value of older models goes down drastically, particularly after the first five years. Still, for a well-maintained EV for 5- to 10-year-olds, you can buy it second-hand and drive it for another 10 or 15 years if you want, as long as it fits your needs.
With that said, consumers today have more options and better deals than ever before. Another apparent reason for this upsurge is that auto shipping services are now handy everywhere; even if you made an online purchase in another part of the country, you will have your EV within a week at your disposal. Despite all of these key trends in the EV market, this brings up a key question:
Is it smarter to buy a brand-new EV or a used one?
Let’s break it down in detail.
Why Used EV Prices Are Falling: Exploring the Factors
To build a strong understanding of a wise decision, we must delve into the factors driving the decline in EV prices. So, several factors are fueling the decline in pre-owned EV prices:
1. Rapid Technology Improvements
With every new model, new technology and advancements are introduced, which in turn boost their efficiency and reliability. Battery efficiency, range, and charging tech continue to advance quickly. As a result, newer models get pricier, whereas previous-gen EVs depreciate faster, making them more affordable.
2. More Inventory
Another technical reason is the recent increase in the production of these EVs. Manufacturers are producing more EVs, fleets are being upgraded regularly, and three- to five-year leases are now expiring. All these actors have been pushing more used EVs into the market as new ones replace them.
3. Economic Pressures
Higher interest rates and cautious consumer spending are persuading many buyers to reevaluate their budgets. Due to this financial pressure, consumers naturally shift toward more affordable vehicles. Since used EVs often offer a lower upfront cost than brand-new models and still provide modern features, a clean environment, and smart systems, they become an ultimate option.
Choosing Between Buying a New EV or a Used One: What to Consider
Buying a pre-owned model can be a great deal. Especially when, with a growing nationwide inventory of used EVs, buyers aren’t limited to what’s available in their local area.
Thanks to reliable cross-country car shipping options, you can purchase the exact model, trim, or battery configuration you want from anywhere in the U.S. and have it delivered to your doorstep in real quick time, often at a lower cost than buying it locally.
1. Purchase Price
- New EV — Though some tax waivers and incentives are being offered to purchasers, even with incentives and tax waivers, new EVs remain more expensive than used ones, with higher upfront costs.
- Used EV — Many popular EVs, such as the Nissan Leaf, Chevy Bolt, and early Tesla models, cost thousands less on the used market, especially as the years pass and new models replace them.
2. Depreciation Risk
- New EV — value depreciation is the biggest hit every new model faces with the arrival of a new model or after the initial years. Buying a new EV, the first owner is definitely going to face that hit now or then.
- Used EV — As the first owner absorbs the most significant value drop, the risk of further depreciation alleviates significantly with the second owner. Or if there is still the risk, the curve is much gentler.
3. Battery Health
- New EV — With new models being purchased, there are no concerns about limited or expired warranties, as brand-new EVs come with 8–10-year battery warranties and bumper-to-bumper coverage.
Used EV — Battery condition and range can degrade over time. It also differs between models and previous driving habits. However, even if a used EV has a warranty, the question remains whether the second owner can claim it, as used vehicles may have limited or expired warranties.
- Technological Advancement:
- New — New models come with the latest features and maximum range, thanks to boosted efficiency, as EV ranges increase and new safety features and technological advancements arrive each year.
- Used — Older EVs may lack features introduced in newer models. For instance, they may miss out on fast-charging capabilities, extended-range batteries, or updated safety features.
Key Takeaways: Which One Should You Buy— New or Used One?
There is no fixed criterion to let anybody make a rigid decision on what to go for, as the right choice depends on your needs.
You May Consider Buying Used If:
- You want the most affordable path into EV ownership
- You don’t mind an older and comparatively lower range than the newer ones
- You’re comfortable inspecting battery health or buying CPO
You Can Go for a New One If:
- You want the latest long-range battery with high-capacity charging
- You value high-tech features and safety systems over budget and depreciation risks.
- You prefer complete warranty protection for your vehicle, including battery and bumper-to-bumper coverage.
Final Thoughts
With significantly lower used EV prices and rising inventory, it is high time to go for an electric vehicle over a gas-powered one. Whether you choose a brand-new or a second-hand one, it all depends on your preferences and budget. For budget-conscious shoppers, the used EV market offers unbeatable value, enabling them to enjoy the full features of an EV at affordable prices. At the same time, tech-focused drivers with little or no concern for upfronts or depreciation might find upgrading to a new model the perfect fit. Either way, the EV future is bright and more affordable than ever.
