Buying Second-Hand Electric Vehicles Still holds Value
In the automotive industry, there's a growing trend that's electrifying the used car market - the rise of electric vehicles (EVs). Over the past year, the average listed prices for used EVs, including Battery Electric Vehicles (BEV), Plug-in Hybrid Electric Vehicles (PHEV), and Hybrid Electric Vehicles (HEV), have been on the upswing.
From July to September 2025, used EV prices increased by about 2.7%, with a 2.32% rise from July to August and a further 0.39% into September. In May 2025 alone, the average used EV price rose modestly by 0.9% month-over-month and 2.6% year-over-year, reaching an average listing price of $36,053.
This upward trend in used EV prices and market demand can be attributed to several factors. Federal rebate uncertainty and incentives have driven increased interest and sales in the used EV market. Over the next two years, more than 1 million EV lease returns are expected to enter the used market, expanding supply but also increasing visibility and market activity.
Lower battery replacement costs, competitive prices closely matching internal combustion engine (ICE) vehicles, shifting consumer priorities, and a cooling new EV market are also contributing to this price surge. As new EV sales have dipped slightly, prices for new EVs have softened, pushing some consumers to look for used EV options instead.
The used EV market saw a 62.6% increase in sales in 2024 compared to 2023, showing strong growth in demand. Total used BEV inventory at dealerships in May 2024 rose 50% compared to the same month in 2024. CPO sales for BEVs, PHEVs, and HEVs combined were up 63% to 95,019 units, and all CPO sales were up 2% to just over 1 million units.
One strategy for dealing with the increased supply of used EVs is to turn them into Certified Pre-Owned (CPO) units. Scott Case, Recurrent co-founder and CEO, states that used Tesla vehicles are being bought by ride-sharing drivers, not just early adopters.
The increase in prices for these vehicles suggests growing demand beyond just early adopters. Patrick Olsen, Carfax content strategy director, stated that the increase in prices for these vehicles was a surprise and reversed a two-year downward trend. The rise in electric-vehicle listing prices may be due to consumers rushing to take advantage of the up to $4,000 used-BEV tax credit from the federal government before it expires.
Despite the surge in demand, Tesla models still accounted for a majority of that inventory, but the brand's dominance is shrinking. CPO sales for PHEVs were up 38% to 15,347 units, and HEVs were up 71% to 58,983 units. This diversification in the used EV market indicates a broader acceptance and adoption of electric vehicles among consumers.
In conclusion, the used EV market is experiencing rising average prices due to strong demand, federal policy effects, improving total cost of ownership, and market dynamics influenced by new EV sales trends and consumer behavior. As the trend continues, we can expect to see more electric vehicles on the roads and in dealerships, providing a sustainable and cost-effective alternative to traditional ICE vehicles.
- As the demand for electric vehicles (EVs) continues to grow, fueled by federal rebate uncertainty and incentives, technology advancements, and shifting consumer priorities, finance experts anticipate further increases in used EV prices.
- The expansion of the used EV market, due to more than 1 million EV lease returns expected in the next two years, coupled with lower battery replacement costs and competitive prices, is poised to make electric vehicles a more accessible and financially viable option for the general public.
