Used EVs Now Most Cost-Efficient for Buyers

New study finds used electric vehicles offer the greatest lifetime savings compared to new and used internal combustion engine vehicles.

Jan. 27, 2026 at 9:23pm by Ben Kaplan

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A new study from the University of Michigan found that used electric vehicles (EVs) offer the lowest lifetime ownership costs across all vehicle classes, with up to $13,000 in savings compared to new internal combustion engine vehicles. The researchers analyzed real-world data on used car prices, fuel and electricity costs, and other ownership expenses to determine that the rapid depreciation of EVs makes them a more cost-effective option for used car buyers.

Why it matters

Encouraging more EV adoption is crucial for reducing transportation-related emissions, and this study suggests that used EVs can be a more affordable option for many consumers. However, the findings also highlight that the high initial cost of new EVs remains a barrier to wider adoption, and that used EV buyers need to consider factors like home charging access and regional electricity prices.

The details

The researchers used virtual vehicle models, real-world pricing data, and ownership cost information to assess the lifetime costs of different vehicle types. They found that a 3-year-old used EV offers $13,000 in lifetime savings compared to a new internal combustion engine midsize SUV, while a used internal combustion engine vehicle only offers $3,000 in savings. The key driver of these savings is the rapid depreciation of EVs, which offsets their higher initial purchase price. However, the researchers noted that used EVs may not be ideal for long-distance drivers due to potential battery degradation, and that high electricity costs in some cities like Boston and San Francisco could erode the cost advantage.

  • The study was published on January 28, 2026.

The players

University of Michigan

The research was conducted by a team at the University of Michigan, including the Center for Sustainable Systems and the School for Environment and Sustainability.

Maxwell Woody

The lead author of the study, a research assistant at the U-M Center for Sustainable Systems and the School for Environment and Sustainability.

Greg Keoleian

The senior author of the study, a professor at the U-M School for Environment and Sustainability and co-director of the Center for Sustainable Systems.

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What they’re saying

“Transportation is the second-largest portion of the average household's budget and, in the new vehicle market, EVs are usually more expensive. But 70% of all vehicle purchases are used, and used EVs have the lowest cost of ownership across vehicle classes.”

— Maxwell Woody, Research Assistant (Mirage News)

“Encouraging more adoption of EVs is key to decarbonizing 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.”

— Greg Keoleian, Professor (Mirage News)

What’s next

The researchers plan to continue monitoring resale data for 2026 to track how the cost dynamics between used EVs and other powertrains evolve over time.

The takeaway

This study suggests that used electric vehicles can now offer the most cost-effective option for many car buyers, providing thousands in lifetime savings compared to new and used internal combustion engine vehicles. This could help drive greater EV adoption and reduce transportation emissions, though high upfront costs for new EVs and regional electricity price variations remain challenges.