EVs are the hottest deals in the used market

Tumbling prices and federal incentives are fueling demand for used electric vehicles, which have now sold faster than pre-owned gas-powered cars for three months in a row.

Driving the news: While prices for preowned hybrid and internal combustion engine (ICE) vehicles have remained stable since January, used EV values are still falling rapidly, according to data from iSeeCars, which examined around 1.6 million listings of 1- to 5-year-old used cars between August 2023 and August 2024.

• By August, used EV prices were down 25% year-over-year, costing an average of $26,839. That’s around $8,800 cheaper compared to 2023.

• As a result, used EV buyers saved an average of 11.4% compared to ICE customers and 9.8% compared to hybrid shoppers.

• Listing prices for preowned hybrids and gas-powered cars have remained much more stable compared to EVs, hovering around the $30,000 mark since January. That said, they’re still down 6% and 4.4% year-over-year, respectively.

What this means: With prices falling so quickly relative to hybrids and ICE cars, demand for EVs is starting to outpace other models in the used market.

• While all car types are selling faster, preowned EVs have seen the biggest boost in speed, spending roughly 17 fewer days on the market than they did in 2023.

• Although ICE, hybrid, and battery-powered cars aren’t too far apart in terms of sales rate, used EVs have now sold faster than ICE for all of June, July, and August. That’s a big change from before, as used EVs typically sold slower than all other model types up until this June.

• However, used hybrids remain king when it comes to outselling other models. Last month, they spent an average of only 37.1 days on the market, compared to 38.6 days for EVs and 39.6 for ICE.

Bottom line: Preowned shoppers have clearly taken note of declining prices. Although discounts like what we saw before the pandemic are still a ways off, a used car buyer’s best bet for getting a deal is to shop electric. On the other hand, it’s important for dealers to keep the $25,000 maximum in mind when pricing used EVs. Matching that price point can help move inventory, but discounting too quickly can result in missed income: paying attention to what buyers are willing to pay (i.e., the transaction price average) can help retailers maximize their profit margins.

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