The government will soon hand you $4,000 to buy a used electric car. How to navigate the purchase, according to experts.

The government will soon hand you $4,000 to buy a used electric car. How to navigate the purchase, according to experts.
·5 min read
2011 Nissan Leaf
The 2011 Nissan Leaf.Nissan
  • A new federal tax incentive for used electric-car purchases is here.

  • Shoppers should understand that electric cars lose battery capacity as they age.

  • But used electric cars may have fewer problem areas than aging gasoline vehicles.

President Joe Biden has signed a bill into law that will make used electric cars cheaper than ever — but there's a lot that buyers should consider before purchasing a secondhand electric vehicle.

The Inflation Reduction Act revises the current tax credit for EV purchases and adds an up-to-$4,000 incentive for used cars. The program goes into effect in 2024 for vehicles that cost $25,000 or less bought by individuals who make no more than $75,000 per year. (The income cap is $112,500 for a head of household and $150,000 for joint filers.)

Here's what you need to know about navigating a used-EV purchase, from how to judge a car's battery health to the models to avoid.

EV batteries lose capacity over time, but they rarely die completely

If you've ever noticed that a laptop or smartphone dies faster the longer you own it, you've experienced battery degradation. The same thing happens to the large lithium-ion battery packs powering electric cars.

If an electric car was rated for, let's say, 250 miles of range when it was new, don't expect it to travel quite as far a few years down the line, experts told Insider. EV batteries tend to lose around 2.3% of their capacity annually, according to a study by vehicle data company Geotab.

Factors like a blisteringly hot climate and repeated fast-charging can accelerate deterioration and some models tend to have faster degradation than others.

One thing not to worry too much about is an EV's battery completely dying on you.

"You should look at battery packs like an engine. Obviously, a car's engine can fail, but for the most part, it's an anomaly," said Benjamin Preston, an automotive reporter at Consumer Reports.

You can minimize the risk of a bad battery

Buyers should do due diligence regarding a used EV's battery health before buying, said Chris Harto, a policy analyst at Consumer Reports. "I would not buy a used electric vehicle without having a high degree of confidence in what the current state of that battery is," he said.

Shoppers can order a state-of-health check on a vehicle through a startup called Recurrent, Harto said. Taking an extended test drive could also shed light on a vehicle's remaining range, he added, and some vehicles provide information about battery health in their settings.

It's also a good idea to check if the vehicle's battery is still under warranty, what's covered by the manufacturer's policy, and whether the warranty transfers to subsequent owners. Some companies cover battery degradation, while others don't.

Ultimately, buying any used car is going to involve some risk of unexpected issues. "It's a real shake of the dice," said Preston, adding that shoppers can use Consumer Reports' reliability rankings to guide their purchase.

Electric cars need less maintenance and there's less that can go wrong

Electric cars have fewer moving parts and need less maintenance than traditional vehicles, cutting down on potential problem areas. You don't have to worry about whether the previous owner changed their oil regularly or about transmission issues, for example.

Used EVs often have outdated tech and less range

Bear in mind that older EVs often won't offer comparable driving range to their modern counterparts. A 2015 Tesla Model S Sedan, for example, was rated for between 208 and 270 miles of range when new.  The current model gets around 400. The first-generation Nissan Leaf was rated for just 73 miles of range.

Modern EVs can generally charge faster, too.

It could make a great second car

Diminished range and limited DC fast-charging ability may be deal breakers for a primary vehicle, but an older EV can still work great for commuters or as a second car, said Jennifer Newman, editor-in-chief of the vehicle marketplace Cars.com. A used electric car might not be ideal for long road trips, but it could work great for shorter errands, she said.

Harto, of Consumer Reports, agrees. "A used Nissan Leaf with 80 miles of range might be a perfect car for your teenage kid to drive to school, drive to their friend's house, do all that," he said. "Not every vehicle in your household needs to do everything if you have multiple vehicles."

There aren't a lot of options right now

Since electric cars are only just hitting the mainstream, buyers shouldn't expect many options for secondhand EVs, said Preston, of Consumer Reports.

Many early EVs were so-called "compliance cars" built in small quantities to meet environmental regulations. Shoppers might consider avoiding those models — like the Ford Focus Electric or Fiat 500e — because parts may be hard to find if something breaks, said Harto.

The same considerations about buying a new EV also apply

You'll also want to consider other things, like how much range you'll need and where you'll charge. Check out Insider's guide for first-time EV buyers here.

Read the original article on Business Insider