Here are some things to consider when you’re looking for your next EV.
The major pros for a new EV:
Getting a new car directly from the car manufacturer or a dealership can be a fun experience. You’re the first person to sync your phone, set your presets, and break in the seats. There is another perk specific to new EVs, too: many new EVs qualify for the federal tax credit, which can mean up to $7500 off of your year-end tax bill. Of course, the amount you get back on your taxes depends on how much you ultimately owe (and which car you’re buying), but it can be a very nice perk. If you’re planning your new car purchase based on the federal tax incentive, we have more details below. Additionally, with a new car, you may qualify for manufacturer deals for financing or great interest rates. Your state or local utility may also have its own purchase incentives, and many of these also apply to used EVs.
The other big perk for a new EV is that you will get the latest and greatest in battery tech. Not only does this mean that you may have more range than in an older car, but you’ll also see faster charging speeds, which are arguably more important. However, with newer tech, you can see issues, too.
Since many of the new EVs you can buy are cutting edge technology or built on entirely new platforms, there may be growing pains associated with a new model, new software, or new body type. Some new EV models see recalls and quality control issues. While the cost to fix these issues are generally covered by the warranty, they can still be a headache to fix. On the plus, new EVs are equipped with the most advanced technology, driver assistance, and integrations.
Another downside of a new car is that the upfront cost may be a lot higher. Since the federal tax credit only kicks in at the end of the year as a reduction in taxes owed, you may be waiting a while for that financial incentive. A new car may also mean higher monthly payments.
One downside to a new car that is specific to today’s strange EV market is longer wait times for high demand vehicles, and possible dealer markups. These are factors that likely only affect buyers who are looking for very popular new models, and are not concerns in more “normal” car markets. On the flip side, the high demand and high prices for EVs today mean that new EVs should hold their value well for the foreseeable future.
Some big perks:
No matter how you slice it, a used EV is going to be greener than a new one. Since most of the carbon emissions associated with electric vehicles come from making the battery, once it’s produced, it is very low carbon – even if your local power runs on coal. The more years any EV is on the road, the lower its annual emissions.
Another thing that sets a used EV apart from a used ICE is that EVs wear and age much less quickly than their cousins, so you don’t see the same age-related failures and maintenance issues as you do with a 5 year old gas car.
A lesser known perk of a used EV is that many of the new-car bugs are worked out. Someone else had to deal with the recalls and replacement parts, and it’s now smooth sailing. While some drivers may see it as a compromise to sacrifice the newest tech, others may find comfort in knowing exactly what they will get. However, it’s worth noting that older tech may mean slower charging speeds or lower range.
When buying used, you also get to select an EV from available inventory. This means you can get your car sooner and avoid buyers remorse as new options hit the market in the months it takes you actually get your car. Finally, the used EV market typically offers more budget friendly options. For the near future, used EV prices remain at an all time high, but bargains can still be found if you’re willing to compromise on tech or range.
The big downside:
The main concern with a used EV is that the battery is no longer brand new. With far fewer moving parts than a gas car, a used EV should have very little mechanical wear, but the battery does require consideration. Over the first 20-30,000 miles of its life, a lithium ion battery can lose 5-10% of its capacity as it goes through totally normal chemical processes. This happens because some of the lithium in the battery is used to make a protective coating around one of the nodes, called the SEI. However, once this happens, battery degradation generally slows down and smooths out. How much this initial battery degradation matters to you depends on the original range of the car and your day to day needs. Typically, the limited decrease in battery capacity is barely noticed by EV owners, but it is something that disproportionately concerns new EV shoppers. Recurrent can help ease any anxiety about used battery condition with its shopper reports.
The silver lining:
Any degradation in battery capacity is balanced by the longer warranties that cover EV batteries. They start at the federal minimum of 8 years or 100,000 miles, and some manufacturers have even longer warranties.
Another note on the Federal Tax Incentive:
For years, the main financial incentive for a new vs. used EV was the federal tax credit, often making the math look better for a new EV, especially non-GM or non-Tesla models. However, as of August 2022, the Inflation Reduction Act was signed into law, totally revamping the electric car incentive program. There is now the first ever, federally funded incentive for used EVs, and some new restrictions and laws governing incentives for new ones. Excitingly, in 2024, the tax credits can also be applied as point-of-sale rebates by transferring them to a dealership.