High inflation, stubborn interest rates, and soaring gas prices make buying and owning a car incredibly painful right now. A typical new car costs around $50,000, putting it completely out of reach for the average American buyer. Because new cars cost so much, most shoppers turn to the used car market for financial relief. Dealers sell between 32 million and 40 million used vehicles every single year. However, recent high demand has pushed even used prices much higher.
Fortunately, one specific segment of the auto industry will soon fix this massive affordability gap. A huge supply of used electric vehicles is about to hit dealership lots across the country. A few years ago, many drivers leased brand-new electric cars to take advantage of a $7,500 federal tax credit. Those standard 3-year lease agreements are finally ending, which means thousands of drivers will soon return their electric cars to the local dealership.
The data site Recurrent expects up to 500,000 electric vehicles to finish their lease terms and enter the used market in 2026. Experts predict that the number could easily double in 2027. The shopping site Edmunds also sees a massive shift happening right now on dealer lots. Edmunds projects that battery electric vehicles will jump from just 2% of all lease returns in 2025 to 8% in 2026. During that same timeframe, traditional gas cars will drop from 93% of lease returns down to 82%.
Most drivers who lease an electric vehicle choose not to buy it when their contract ends. The final buyout price rarely makes financial sense compared to buying a different car. Instead, drivers simply hand the keys back to the dealer. This growing trend adds a massive amount of fresh inventory to the used electric car market. Secondhand buyers win big because they get a slightly used car that still features modern technology and excellent battery range.
Prices for used electric cars currently look like an absolute bargain. CarGurus noted in a recent report that used electric vehicle prices have crashed 35% since 2022. The average price for a used electric car now sits at an affordable $34,600. This massive discount creates the perfect opportunity for smart shoppers. Drivers can now ditch expensive gasoline without spending a fortune on a brand-new electric model.
Buyers already recognize these great deals and eagerly buy up the available inventory. Cox Automotive reported exactly 30,879 used electric vehicle sales in February alone. That number represents a massive 28.8% increase compared to the same time last year and a solid 4.2% jump from the previous month. Tesla completely dominated the market, selling more than 12,133 used units at independent dealerships. Shoppers also eagerly bought used electric models from Chevrolet, Ford, BMW, and Hyundai.
These used electric cars disappear from dealer lots incredibly fast. An average used gas car usually takes 53 days to sell. Meanwhile, a used Tesla Model X or Cybertruck finds a new owner in less than 28 days. We see the exact same trend in the new-car market, where the affordable Chevrolet Bolt EV sells out in just 9.6 days. The data tells a very clear story. If dealers offer the right price, everyday Americans will gladly buy an electric car.
