The Expert Podcast

The price of new vehicles, electric vehicles, and even gas vehicles has skyrocketed. The average prices for any kind of significant vehicle, such as a car costing $40,000 to $50,000, are now putting you at a car payment of about a thousand dollars a month. That's pretty significant—more than some people pay in rent, or at least they used to before rents went up. As electric vehicles become more popular, many people might think, "Should I buy a used electric vehicle (EV) to save some money?" Well, there's more to it than just buying a used vehicle.

When it comes to electric vehicles, used EVs have one particular risk associated with them that you really have to check into: the battery. There's an excellent article from MarketWatch about when buying a used EV is smart and when it's not. The main factor is the battery's health. According to the article, here's how to weigh the risks. Electric vehicles are the future, as we know. Many states are banning gas vehicles, and they are really pushing hard to get electric vehicles to become more common.

As these used vehicles percolate through the system, there will be some opportunities to save money and buy a used EV. But it's extremely important to evaluate the battery. Here's why: even in this article, it says it's all about the battery. The lithium-ion battery in an EV is comparable to the engine in an internal combustion car. In a gasoline car, the engine is the heart of the vehicle—the core driving component. In a vehicle run by electricity, it's the battery. After a number of cycles, it begins to lose its ability to fully charge, just like your cell phone or your computer, and the range will gradually decrease.

Battery degradation doesn't happen overnight, but as it decreases, the car becomes less valuable. If you purchase an electric vehicle with a 250-mile range and it drops 15, 20, or even 30 percent, you're going to be down to a 160 or 170-mile range pretty quickly. You might think, "Can it really drop 30 percent?" Well, if you look at the warranties on most EVs, the new car warranties typically last eight years or 100,000 miles, usually in that range. However, the warranty doesn't kick in until the battery is less than 70 percent of its original charging capacity. Most EV manufacturers consider a battery with 70 percent or more of charging capacity to be fully functional.

So, you could have a vehicle with a battery that is 28 to 29 percent reduced in capacity and still not be able to put in a warranty claim for a new battery. What does that mean? It means you'll be on the hook for the cost of a new battery if it needs to be replaced. The cost of new batteries can be up to $20,000. We've actually seen more than that on our channel. We've had examples of repair orders for batteries that have cost $30,000 or more. In some cases, there aren't even any replacement batteries available for certain electric vehicles. So, even if you wanted to pay $50,000, you couldn't get another replacement battery.

Here's the takeaway: when you're shopping for a used EV, check the range. Get a used car inspection or have a local EV mechanic calculate if the range is what it's supposed to be. If you have a vehicle that you need to count on to get you to a certain destination every day and your range isn’t going to get you there, or you have to recharge it every other time, that might defeat the purpose of buying a used EV in the first place.