Used Electric Vehicles Emerge as the Lowest-Cost Cars Over Time

Soaring car prices and long-term financing have reshaped the U.S. auto market. Today, more than one in five American car buyers pays over $1,000 per month for a new vehicle loan, placing growing strain on household budgets. Against this backdrop, new research suggests a clear alternative: used electric vehicles now offer the lowest total cost of ownership in the U.S.

Study Finds Used EVs Deliver the Greatest Long-Term Savings

A recent study from the University of Michigan, published in Environmental Research Letters, concludes that three-year-old electric vehicles are the cheapest cars to own over a 10-year vehicle lifespan. According to the findings, a used midsize electric SUV can save owners approximately $13,000 compared with a new gasoline-powered SUV in the same class. By contrast, a used gas SUV delivers only about $3,000 in lifetime savings.

Why Used EVs Outperform Other Powertrains

The study highlights two major forces driving this cost advantage. First, electric vehicles depreciate faster than gas-powered cars during their early years, making them far more affordable on the used market. Second, EVs benefit from lower energy and maintenance costs over time, especially when owners rely primarily on home charging.

“Transportation is the second-largest expense for most households,” said Maxwell Woody, the study’s lead author. “While EVs are often more expensive when new, used EVs have the lowest ownership costs across nearly all vehicle classes.”

Charging Behavior Plays a Critical Role

The research emphasizes that charging patterns significantly influence total costs. The study assumes that EV owners charge 80% of the time at home and 20% using public chargers. Home charging costs were calculated using a mix of off-peak, part-peak, and peak electricity rates, reflecting real-world usage patterns.

The analysis also accounts for Level 2 home charger installation and permitting costs, recognizing that many used EV buyers are first-time electric vehicle owners.

For drivers who rely exclusively on public DC fast charging, costs rise considerably. In those cases, a used EV may cost more to fuel than a hybrid vehicle, though it still remains cheaper than a fully gasoline-powered car.

How the Researchers Built the Comparison

The study focuses on vehicles sold after three years of initial ownership, with total vehicle life set at 10 years, resulting in a seven-year ownership period for used buyers. Researchers analyzed 260,000 used vehicle listings from Craigslist, covering four powertrain types:

• Internal combustion engines (ICE)

• Hybrids (HEV)

• Plug-in hybrids (PHEV)

• Battery electric vehicles (BEV)

Average fuel and electricity prices from 17 U.S. cities were included, alongside vehicle performance data from Argonne National Laboratory’s Autonomie model.

Importantly, the vehicles evaluated were synthetic representative models, not specific makes or models. This approach ensured consistency across powertrains, though it also limited real-world representation in certain segments.

New EVs Still Struggle to Compete on Cost

While used EVs dominate on affordability, the study finds that new electric vehicles rarely offer cost advantages over gas or hybrid alternatives within a seven-year ownership window. In categories such as small SUVs, midsize SUVs, and pickup trucks, new EVs showed the highest total cost of ownership.

However, once depreciation is absorbed by the first owner, the economics shift dramatically in favor of used electric vehicles.

What This Means for Car Buyers

For consumers shopping new, faster depreciation may be a concern. But for used-car buyers, the findings are clear. “If you're in the market for a used vehicle, this is very positive news,” said Greg Keoleian, senior author of the study and co-director of the Center for Sustainable Systems.

As affordability becomes a defining issue in the U.S. car market, used EVs are emerging as the most cost-effective choice for long-term ownership.

Recommend Reading: Why 2026 Could Be the Smartest Year to Buy a Used Electric Vehicle