Used Electric Cars Overtake Gas In Cost Savings

For years, the electric vehicle (EV) revolution seemed like a distant promise for most car buyers—especially those on the hunt for a budget-friendly used ride. High sticker prices and concerns about battery longevity kept many Americans and Europeans alike clinging to their trusty gas-powered cars. But new research and recent market data reveal a dramatic shift: used electric vehicles are not only catching up, but in many cases have become the most cost-effective choice for buyers across the United States and Europe.

According to a University of Michigan study published on January 27, 2026 in Environmental Research Letters, owning a three-year-old electric SUV can save drivers a whopping $13,000 over seven years compared to buying the same model new. In contrast, buyers of three-year-old gas SUVs see only about $3,000 in savings over new models. The study, which analyzed over 260,000 vehicle listings across 17 major U.S. cities, factored in everything from purchase price and insurance to maintenance, fuel, taxes, and resale value. The results upend the conventional wisdom that electric vehicles are always pricier in the long run.

“Used electric vehicles represent a large opportunity to minimize household vehicle spending while reducing greenhouse gas emissions,” said Maxwell Woody, the study’s lead author from the University of Michigan’s Center for Sustainable Systems, as reported by Study Finds. Woody and his colleagues found that the economics of EVs change dramatically once they hit the used market. While new EVs do lose value faster than their gas counterparts—retaining about 58% to 67% of their original price after three years, compared to 70% to 84% for gas cars—this rapid depreciation is a boon for used car shoppers. Buyers can snap up nearly-new electric vehicles at steep discounts, often with several years left on their original battery warranties.

The savings don’t stop at the sale price. Over seven years, owners of used electric SUVs typically spend around $9,600 on maintenance and repairs, compared to $14,200 for similar gas models. That’s thanks to the simplicity of electric drivetrains: no oil changes, no spark plugs, fewer moving parts, and even brakes that last longer due to regenerative braking. The study also found that even those who rely solely on public charging stations—where electricity can cost two to four times more than home charging—still save money in most cities. The biggest savings, however, go to those who can charge at home overnight, taking advantage of lower off-peak electricity rates.

Location matters, too. Cleveland emerged as the cheapest city for vehicle ownership, while New York City topped the list for expensive gas and hybrid car costs, largely due to high insurance rates. San Francisco, with its sky-high electricity prices, was the most expensive city for electric vehicle owners. Meanwhile, Chicago imposes hefty annual fees on EVs, and Boston and San Francisco were the only cities where electric and hybrid vehicles cost about the same to own.

One common worry among used EV buyers is battery longevity. Most manufacturers offer battery warranties lasting eight years or 100,000 miles, with some stretching to 10 years or 175,000 miles. If a battery fails within this period, the replacement is covered. However, concerns about battery health still depress resale values—ironically creating the very discounts that make used EVs such a bargain for savvy shoppers. The study’s authors suggest that policies such as extended battery warranties or certified battery health reports could help ease buyer anxieties and further accelerate the shift.

But what about Europe? The story there is much the same—if not more dramatic. According to new figures from the European Automobile Manufacturers’ Association (ACEA), battery electric vehicles accounted for 17.4% of all new car registrations in the European Union in 2025, up from 13.6% the previous year. That’s 1,880,370 new BEVs hitting EU roads in a single year, despite overall new car registrations rising by just 1.8% and remaining below pre-pandemic levels.

The growth is being driven by the EU’s four largest markets: Germany, the Netherlands, Belgium, and France, which together accounted for 62% of new BEV registrations. Germany led the charge with a staggering 43.2% year-over-year increase in BEV sales, followed by the Netherlands (18.1%), Belgium (12.6%), and France (12.5%). Meanwhile, the combined market share of petrol and diesel cars plummeted from 45.2% in 2024 to just 35.5% in 2025, with France experiencing the steepest decline—a 32% drop in new gas and diesel registrations.

Hybrid-electric vehicles now make up the largest segment of new car sales in the EU, capturing 34.5% of the market, while plug-in hybrid EVs (PHEVs) hold a 9.4% share. This changing landscape suggests that the European transition to electrified transport is well underway, even as some brands stumble. Tesla, for example, saw its EU sales fall sharply from 326,525 in 2024 to 238,656 in 2025, with its overall market share dipping from 2.5% to 1.8%—the largest drop of any carmaker.

These trends reflect more than just shifting consumer preferences; they signal a fundamental transformation in how people view vehicle ownership. For the 70% of Americans who buy used rather than new, and for millions of Europeans facing stricter emissions rules and urban low-emission zones, electric vehicles are no longer a luxury or a gamble—they’re often the smartest financial choice. Policymakers on both sides of the Atlantic are taking note. The University of Michigan researchers suggest that expanding public charging infrastructure at apartment buildings and condos could help renters and urban dwellers access the same savings as homeowners. They also recommend that governments consider policies to extend battery warranties or provide battery health certificates for used EVs, helping to build consumer confidence and keep the market momentum going.

Of course, the picture isn’t entirely rosy. The University of Michigan study warns that its findings reflect 2024 market conditions, which could change if federal EV incentives are rolled back or if new models and technologies shift depreciation patterns. The research also points out that sample sizes were limited for some vehicle types, such as electric pickup trucks, and that factors like vehicle range and manufacturer reputation—which can influence resale values—weren’t directly accounted for. On the European side, the ACEA notes that while BEV sales are growing, there’s still “room for growth” if the region is to meet its ambitious climate and transportation targets.

Still, the data paints a clear picture. Whether you’re shopping for a used car in Cleveland or considering a new BEV in Berlin, the electric option is increasingly likely to save you money—and help the planet in the process. As the market matures and more models hit the road, it seems the age of the affordable electric vehicle has truly arrived.

With the economics of car ownership shifting under our feet, the question for many buyers is no longer "Can I afford to go electric?" but "Can I afford not to?"