It’s an Outrageously Good Time to Buy a Used EV

The news that Hertz is selling off one-third of its electric vehicle fleet after limited demand and costly repairs means U.S. consumers just got 20,000 more choices when shopping for a used EV. And with prices continuing to fall, now may be one of the best times to snag a pre-owned electric at a nice discount. But buyer beware.

Last year, used car prices finally began to slip after pandemic-induced supply issues. EVs led the way, with pre-owned models down 22% from the previous year, according to Cox Automotive. Tesla saw the biggest price drops, specifically with the average Model 3 going for 21% less than the year before. Hertz’s liquidation of its EVs is certainly going to help keep used prices in check, particularly in oversaturated markets.

“EV inventory is already far outpacing current consumer demand,” says Pat Ryan, Founder and CEO of CoPilot, a AI-driven car shopping assistant. “Used EVs have a market days supply of 51, compared to 43 for used gas-powered cars and 44 for used hybrids.” And it’s even higher for new models.

Ryan suggests the reason for the glut comes down to a few issues: Early adopters and luxury buyers made the switch to electric a few years ago, limiting demand while also keeping a steady supply of pre-owned vehicles hitting the market. There’s also price, charging, and even a partisan divide. And with traditional automakers like GM and Ford overproducing EVs relative to demand (newcomers like Tesla aren’t necessarily seeing similar problems), there are a lot of new and used options to choose from.

But for EV shoppers that might be a “potential advantage,” says Ryan. “Now might be a good time to buy as some dealers will likely be hoping to make a deal in order to move inventory off their lots.”

What kind of deal is the real question. While a $21,500 Tesla Model 3 may seem enticing, the same issues that plagued Hertz – including the high cost of repairs – should give some buyers pause.

“If someone did want to buy a car from Hertz, buyers should be aware that most rental companies fix their vehicles in-house,” says Tom McParland, the owner of Automatch Consulting. “And if the car was involved in an accident that history may never appear on a Carfax.”

While fleet vehicles are relatively well-maintained to ensure they’re on the road and making money, anyone that’s regularly rented a car knows the wear and tear is substantial. The high-tech systems that power modern EVs are one thing, but the most costly item – the battery – is where buyers have to be the most vigilant.

“The big issue with used EVs is that it is currently difficult to accurately ascertain what the remaining battery life is," says McParland. Because of that, he says, “a lot of the higher-mile cars will end up wholesaled and picked up by those questionable used car lots with ‘guaranteed credit approval.’”