The automotive landscape is witnessing a remarkable shift in 2026, with used electric vehicles (EVs) taking center stage. Despite a decline in new EV sales following the end of federal tax rebates last fall, the secondhand market is thriving. This resurgence is largely attributed to the recent surge in gas prices, which has made used EVs an attractive alternative for cost-conscious consumers.
In the second quarter of 2026, a staggering 128,000 used EVs found new owners, setting a new record according to data from Cox Automotive. This figure represents a significant 29% increase, equating to approximately 30,000 more cars sold compared to Q2 2026. The average price of a used EV now stands at around $37,000, which is about $3,000 more than the typical new gas-powered vehicle, including hybrids. This price point is a recent development, as used EVs previously changed hands for just under $35,000.
The used EV market outperforms other powertrains
Mark Strand Cox Automotive’s Deputy Chief Economist, highlighted the exceptional performance of used EVs during the group’s mid-year review. He noted that three-year-old EVs are far outpacing normal seasonal trends and outperforming all other powertrains. The Manheim Market Report indicates that the price for a three-year-old EV is now about 14% above its initial value. In contrast, non-EVs of the same age peaked around the first week of March and are following expected seasonality, with a 3.5% increase compared to their initial values.
The influx of used EVs into the market can be largely attributed to lease returns. Many of these vehicles were initially leased under a short-lived loophole that classified EV leases as commercial sales. This provision allowed for attractive lease deals, such as the $0 Fiat 500e lease. According to expert Sam Abuelsamid vehicles from this leasing era will continue to re-enter the market over the next two years.
The role of lenders in stabilizing the used EV market
Lenders have played a crucial role in absorbing valuation adjustments, helping the wholesale market digest the increase in used EVs. An earlier report in April stated that lessees are unlikely to purchase vehicles priced above market value at the end of their terms. This dynamic has contributed to the stability and growth of the used EV market.
Despite the potential for depreciation, used EVs are not particularly vulnerable due to battery degradation. Automakers have made significant strides in mitigating battery degradation as the technology has matured. However, it is advisable to avoid daily DC fast charging to prolong battery life. If daily fast charging is unavoidable, it may be prudent to retain a hybrid or gas-powered vehicle for longer.
