Surge of off‑lease electric vehicles expected to drive down used EV prices

Rising gas prices tied to the war in the Middle East are pushing some drivers to consider electric vehicles.

Industry analysts say the timing may be ideal for shoppers looking for a deal.

Joseph Yoon with Edmunds said that more than 300,000 electric vehicles are expected to be returned from leases, sending a wave of used EVs and hybrids into the market.

He said that influx is likely to lower prices.

Three years ago, a surge in EV leases was fueled by the Inflation Reduction Act, which offered a $7,500 federal tax credit to EV owners.

While that credit has since expired, many of those vehicles are now reaching the end of their lease terms and heading back to dealerships.

Yoon said the growing supply of used EVs could benefit buyers.

"So if you're in the market and maybe a new EV is a little bit too expensive for you, I think looking at a nearly new used EV is of great value," he said.

Yoon noted that many of the vehicles coming off lease will have fewer than 40,000 miles and will still be under warranty.

Advances in battery technology, he added, have also improved longterm durability.

"You should be able to get easily over 200k miles, close to 300k miles in range and they will be a lot cheaper than you could ever imagined," he said.

Among the models expected to hit the market are the Tesla Model Y and Model 3, the Hyundai Ioniq 5, and the Ford Mustang MachE.

Industry experts say dealerships will need to prepare for the additional volume.

Some may allow customers to purchase the vehicles for less than the contract's stated residual value.