Now is a superb time for these buying within the used automobile market to think about an electrical car, in keeping with new analysis from the University of Michigan.
In assessing the lifetime possession prices of used automobiles with completely different physique types and powertrains, the researchers discovered that fully electrified candidates provided the best financial savings.
For instance, in contrast with a brand new midsized SUV with an inner combustion engine, a 3-year-old used EV model provided a lifetime financial savings of $13,000, in keeping with the brand new examine printed in Environmental Research Letters. Meanwhile, in contrast with that very same new car, a used inner combustion engine car, or ICEV, would supply a lifetime financial savings of solely $3,000.
“Transportation is the second-largest portion of the average household’s budget and, in the new vehicle market, EVs are usually more expensive,” says Maxwell Woody, the lead creator of the examine. “But 70% of all vehicle purchases are used and used EVs have the lowest cost of ownership across vehicle classes.”
Woody is a analysis assistant on the U-M Center for Sustainable Systems (CSS) and the School for Environment and Sustainability (SEAS).
Kicking the digital tires
To analyse lifetime possession prices, the workforce used digital car fashions from Argonne National Laboratory, month-to-month gasoline and electrical energy costs from 17 US cities, and knowledge from Craigslist advertisements for used vehicles posted in 2024. Sabina Tomkins, assistant professor on the U-M School of Information, led the workforce’s cohort that gathered the Craigslist knowledge, which included 260,000 listings after screening 4-million uncooked knowledge factors.
Combining the real-world info with Argonne’s fashions enabled the researchers to evaluate the acquisition worth of a car. The whole value of possession was then decided by combining buy and depreciation knowledge with knowledge gathered for recurring prices together with charges, repairs, insurance coverage, upkeep and fuelling or charging in several elements of the nation.
“I was surprised by how consistent the result was. I expected EVs would be cheaper in some scenarios, for some cities or vehicle types,” says Woody. “But their costs were consistently lower across all vehicle classes and in almost all the cities.”
Senior creator Greg Keoleian, a professor at SEAS and co-director of the CSS, says that though the comparatively excessive value of recent EVs has restricted their adoption within the US, this examine may assist extra drivers select used automobiles with decrease carbon emissions.
He says: “Encouraging more adoption of EVs is key to decarbonising the transportation sector and cost is a big factor in purchasing decisions. So this is positive news, I think, for helping encourage consumers to buy EVs.”
The examine’s authors embrace Antara Green and Christian Hitt at CSS and Sally Yin and Alexander Liu on the School of Information. The examine was supported by the Responsible Battery Coalition.
Appreciating depreciation
While EV’s low value of possession is the take-home message of the examine, the workforce’s evaluation additionally revealed some notable caveats and concerns.
For occasion, used EVs lower prices probably the most when drivers can do the vast majority of their charging at house. That means drivers who can’t set up a house charger or who have to cost so much on the highway received’t save as a lot. The workforce discovered that EVs’ lifetime value of possession may creep above ICEVs and hybrids in two cities, Boston and San Francisco, due to their excessive electrical energy prices.
The workforce acknowledged considerations in regards to the battery efficiency of a used EV, which received’t match a brand new EV’s by way of capability and vary. Thus, used EVs might not be a match for long-haul drivers, however can supply 1000’s in lifetime financial savings for drivers who largely keep native. And that benefit is primarily fuelled by how rapidly EVs at the moment lose worth in contrast with different powertrains.
Woody says: “EVs have lower maintenance and repair costs than other powertrains, but the initial depreciation of the vehicle is really what drives the savings.”
As EV adoption turns into extra widespread, the depreciation hole would shrink and the enjoying area would grow to be extra stage throughout powertrains. But, for now, depreciation is making a discount for anybody contemplating a used EV.
Keoleian says: “It’s not the most positive news if you’re in the market for a new EV, knowing that your resale value may be impacted by the faster depreciation. But if you’re in the market for a used vehicle, it’s very positive news.”
The researchers have began monitoring resale knowledge for 2026 to keep watch over this development shifting ahead.