Used EV Prices Are Falling, But They Could Still Cost You Big Time
KEY POINTS
- Used EV prices fell 20% over the past year.
- Electric vehicles cost about 20% more to insure than gas-powered vehicles.
- Comparison shop for insurance when buying a new or used EV.
You're in luck if you've been in the market for a new or used electric vehicle. After prices for EVs soared over the past few years because of supply chain constraints and rising inflation, electrified car models are finally starting to experience price drops.
The falling prices are even sweeter because some used and new EVs qualify for the government's EV tax credits. Here's how much EV prices are falling and why you should spend a few minutes comparison shopping for the best car insurance for your EV.
Used EV prices are down 20% over the past year
EV prices peaked in mid-2022 as vehicle shortages combined with high demand. However, supply chain constraints have eased since then. And with some consumers pulling back on large expenses due to high inflation, the EV market has slowed.
Research from Edmund's shows that used electric vehicle prices have tumbled 20% over the past year. This puts the average transaction price for a used EV at around $33,787.
But you don't need to shell out that much cash for a used EV. There are plenty of used models for $25,000 or less. Even better, some qualify for a tax credit worth up to $4,000 (if it's a used EV sold from a licensed dealer priced under $25,000). Here are a few that likely qualify, according to Car & Driver:
- 2012–2014 Tesla Model S Performance and P85
- 2018–2022 Tesla Model 3
- 2019–2021 Hyundai Ioniq Electric
- 2019–2022 Nissan Leaf Plus
- 2019–2022 Hyundai Kona Electric
- 2022 Chevrolet Bolt EUV
- 2022 Mazda MX-30
Related: Did you know the type of EV you buy can affect your insurance premiums? Click here to see comparisons of the cheapest car insurance providers.
Higher insurance costs for EVs are real
If you're in the market for an EV, you've likely looked into how much money you might save on gas or how much your electricity costs will increase by charging your car at home. But one factor you might have overlooked is the higher insurance costs for EVs.
EVs typically cost up to 20% more to insure than gas-powered cars. There are a few reasons for this, including:
- The higher cost of EVs relative to gas-powered cars
- A limited number of auto technicians trained to repair EVs
- Complex equipment in EVs that's expensive to repair or replace
- EV batteries are expensive to replace
Pro tip: Skip the long phone calls by comparing insurance providers online. We've done the hard work for you with our list of the best car insurance companies.
Unless you repair your EV yourself (not recommended, unless you know what you're doing!), one of the best ways to find the cheapest car insurance is to compare rates from multiple insurers. Not all insurance providers weigh your driving record, credit score, or car model the same way.
While EV prices are falling, insurance costs are, unfortunately, moving in the opposite direction. Car insurance premiums jumped an average of 22% this year alone. This means that if there was ever a time to look into switching your insurance provider, it's now.
Our Research Expert
Chris Neiger is a full-time freelance writer with more than 10 years' experience covering personal finance and investing-related topics. He was also a writer for the BBC for three years and marketing manager for two non-profits.
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