Car Research

People are always hoping to find a hidden gem when they're shopping for a used car: something that is inexpensive to buy, cheap to maintain and "good on gas."

If you have a place to plug in — and that's an important if — a used electric vehicle will check off all those boxes. EVs are significantly less expensive to purchase and maintain than comparable used gas-powered cars.

Most EVs lose their value more quickly than do comparable gas-powered vehicles. At Edmunds, we saw EV depreciation in action recently when we sold our long-term 2016 Telsa Model X. We paid $144,950 for the car new and were initially offered $66,000 at CarMax: That's a 55 percent drop in value. We got $90,101 when we sold the SUV on eBay, whittling the value loss down to 38 percent.

Or take a more extreme example: the Fiat 500e. The average price of a new 500e is $32,392, according to Edmunds transaction data. But when it's 3 years old and sold as a used car, its average price is $8,669. That's a 73 percent drop in value. If it were a Honda Civic, the depreciation would be closer to 30 percent.

A number of reasons are behind the EV value crash. "State, federal and manufacturer new-car incentives are effectively lowering the starting price of the car, which is then reflected in the used-car market," said Ivan Drury, senior manager, data strategy for Edmunds. Other factors in low used EV prices include a very low demand for electric vehicles and the rapid pace of technological improvements that leave used EVs in the dust, he said.

While some people are content with simply buying an inexpensive used car, others want to go a step further and reduce their carbon footprint. In such cases, a used EV can be a compelling purchase. That said, it may not be the best choice for everyone. Here are a few reasons why you might — or might not — want to buy one.

Pros

They're a bargain: The EV's diminished resale value is a con for the person who bought one and is trying to sell it. But it's a pro for you as a used-car shopper. The savings will vary by model, but on average, used EVs cost 43 to 72 percent less than new ones.

If you search the classified listings for EV models that have been out for at least three years, such as the Fiat 500e or the Nissan Leaf, you'll find a number of them for less than $10,000. You would be hard-pressed to find a 3-year-old gas-powered vehicle for the same price. And if you did find one, it is sure to have double or triple the miles on the odometer.

You'll get a smoother driving experience: Since an EV does not have an internal combustion engine, it's smoother and quieter and it vibrates less than a gas-powered vehicle. Affordable conventional cars in this less than $10K price range are likely to be older, smaller four-cylinder cars that are, in the words of Dan Edmunds, our director of vehicle testing, "coarse and lack refinement." Further, the added weight of the EV's battery will make the car feel more planted to the road.

They're good for the environment: Unlike a gas-powered car, an EV does not produce tailpipe pollutants that contribute to global warming. If your local power plant uses renewable energy to produce the electricity for your EV, there's no pollution from that source either. Even the assertion that an EV hurts the environment when it draws electricity from a coal-powered plant has been largely disproven.

And when you buy a used EV, you're helping the environment even more than if you bought a new one. EVs do have a slightly greater carbon footprint when they are built due to their complexity. However, a study from the Union of Concerned Scientists found that "battery electric cars make up for their higher manufacturing emissions within 18 months of driving — shorter-range models can offset the extra emissions within six months — and continue to outperform gasoline cars until the end of their lives."

In other words, a used EV will have already been driven to the point at which it is positively affecting the environment.

The cars are in better condition and require less maintenance: EVs have fewer moving parts than traditional cars, so there isn't much that can break down. In general, used EVs will have fewer miles on the odometer, and so they've had less wear and tear on the brakes, the tires and the suspension. This is the silver lining of their more limited range.

EVs also require less regular maintenance. Most conventional vehicles call for a major service in the third year, which can often cost a few hundred dollars. Compare that to the Nissan Leaf, for example, which requires only a tire rotation, brake fluid and cabin filter replacement in its third year.

You may have carpool access: If you live in a state that allows you to drive an EV solo in the carpool lane, the lane access stickers are usually transferrable to the next owner.

Cons

The possibility of diminished battery performance: Anyone who's owned a battery-powered device has seen its performance fade over time. The same thing can happen to electric vehicles — particularly early models. We'll spare you the chemistry lesson, but suffice it to say that as EV batteries age, you may see reduced performance and range. Driving in high temperatures, charging to maximum capacity, and draining the battery to a low voltage all take their toll.

Because EVs have a much bigger battery, this performance drop happens much more slowly than it does with a smartphone or a laptop. The EV's battery cooling system is another factor in how it behaves over time: Liquid cooling helps preserve battery life and performance, and many, but not all, EVs have these systems. The Nissan Leaf, for example, has an air-cooled battery.

Battery fade was a vexing issue for some owners of early Nissan Leafs (2011-2012), particularly the ones consistently driven in hot climates.

Nissan projected that Leaf batteries would retain 80 percent of their capacity under normal use after five years. After an investigation into the instances of battery fade in the Phoenix area in 2012, it revised that figure for that region.

"Based on actual vehicle data, we project the average vehicle in that market to have battery capacity of 76 percent after five years — or a few percentage points lower than the global estimate," Carla Bailo, senior vice president, Research and Development for Nissan Americas, said in an open letter to Leaf owners. "Factors that may account for this differential include extreme heat, high speed, high annual mileage, and charging method and frequency of the Nissan Leafs in the Phoenix market," said Bailo.

Nissan reminded its customers that these cars were only a small subset of all the Leaf vehicles in the world, and most Leafs' batteries were aging as intended, with 80 percent of capacity after five years. Nissan ended up changing its battery chemistry for the 2013 model-year Leaf, which made the battery more resistant to warmer temperatures. The Leaf community has nicknamed it the "lizard" battery.

The charging factor: Do you have a place to charge an EV? Is the plug rated at 240 volts? Is the wiring in your home old? If so, you'll likely need to hire an electrician to prepare your home for an EV. The charging station itself can run from $200 to $750, depending on the brand and features. The installation costs can vary tremendously based on electrician labor rates and the extent of rewiring required. This cost can range from $200 to several thousand dollars, according to plugincars.com. If you're on the high end of installation costs, setting up your home for charging could eat away at the potential savings of owning a used EV.

If you plan on making do with public chargers, make sure you look into the pricing for the stations you intend to use. Some stations charge by the hour, which can add up over time.

Outdated technology: If you commit to buying a used car and keeping it for a few years, you'll have to come to terms with the fact that its key technology will quickly become outdated. Technology gets outdated on traditional gas vehicles, too, but the effects are magnified for EVs because battery performance and range are rapidly improving. Take the 2015 Nissan Leaf, for example. It has an EPA-estimated 87 miles of range. By contrast, the 2018 Leaf has a range of 151 miles. The 2018 Chevrolet Bolt's range is 238 miles.

Battery life uncertainties: Modern electric vehicles (dating from around 2011) haven't been out long enough to accurately judge how long their batteries will last. If you're the second buyer, you may not know the car's charging history and the effect that's had on the battery.

If the EV's battery flat-out fails, however, you may have recourse. Even if the car is out of its basic warranty period (typically three years), the battery should still be covered under the federally required warranty: eight years or 80,000 miles. California's zero-emission vehicle regulations require even more coverage. EVs and hybrids sold in California, and the states that have adopted this standard, must carry a minimum 10-year/150,000-mile warranty on their battery systems. As of this date, those states are Connecticut, Maine, Maryland, Massachusetts, New Jersey, New York, Oregon, Rhode Island and Vermont, according to the California Air Resources Board.

But not all automakers cover battery degradation, meaning the loss of charging capacity and, subsequently, the loss of driving range in the event that happens. If your car's maker does provide that coverage, capacity loss must fall under a certain threshold to be covered. If the manufacturer doesn't cover capacity loss, the battery must stop functioning altogether for the warranty to kick in.

If you have to pay for a new EV battery, no matter what the reason, it won't be cheap: It costs about $5,500, plus labor, to replace the battery on a Nissan Leaf, for example.

Diminished resale value: An electric vehicle's depreciation curve tapers off after a few years, so you won't have the steep loss that the original owner experienced. Even so, if you plan on trading it in toward your next vehicle, you won't get a lot for it. Selling it yourself on the private-party market is a better bet.

Summing up

Buying and owning an EV make for a different kind of car experience. EVs have some strong pros and a few cons that you should consider carefully before you buy. But once you resolve how you'll charge, the purchase may well make sense. You can pay very little to buy an EV. You won't spend a nickel on gas, and if you have the right setup, you won't spend much on charging either. You'll avoid many maintenance and repair costs that confront most used-car owners. In other words, you can wring a lot of value out of the car even if its resale value is low.