Are Used EV's Affordable for Bad Credit Borrowers?

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Meghan Carbary has been writing professionally for nearly 20 years. A published journalist in three states, Meghan honed her skills as a feature writer and sports editor. She has now expanded her skill-set into the automotive industry as a content writer for Auto Credit Express, where she contributes to several automotive and auto finance blogs.


, - April 12, 2021

Electric Vehicles, or EVs for short, are making a big splash in the auto industry right now, as more automakers vow to cut down on the production of internal combustion engine cars; or at least ramp up the production of EVs.

This means more used EVs hitting the market – and possibly more affordable alternatives for credit-challenged consumers who want to keep it green.

Electric Vehicles Seeing More Sales

Even though traditional fuel engines still make up the lion's share of the auto market, EVs are growing in popularity. According to Experian's State of the Automotive Finance Market for the fourth quarter of 2020, EVs and hybrids made up 6.7% of new vehicle financing, a jump of nearly two percentage points since 2019.

Even with this growth, sticker shock is still keeping many borrowers at bay, especially those with lower credit scores. On average, EVs have a sticker price that's around $19,000 more than their gas-powered cousins. However, with the recent push for more environmentally friendly vehicles, prices on some makes and models have dropped considerably.

In fact, the price of purchasing a new EV has dropped considerably in the last few years alone which may put some EVs, especially used ones, within the price range for borrowers with bad credit. There's still a wide variety in the market when it comes to electric cars – they can range from around $100,000 to $30,000 on average for new models. However, there's a wide range in the used market as well, with costs ranging from under $10,000 to around $30,000 depending on the make, model, and dealership.

Looking for Used EVs With Bad Credit?

EVs don't have the best resale value, so taking on a used one means that you may not get any return on investment if you decide it's not for you. If you're wondering whether or not a used EV is the way to go for you, there are a few things that you should consider before taking the plunge.

Consider these factors before signing on the dotted line:

  • EV batteries lose potency over time just like a phone or laptop battery. This means that no matter how much or little they're used, EVs are likely to need a new battery at some point, and may not give you the same range per full charge on a used model that you're expected to get when new.
  • If you're considering a used EV whose battery isn't giving you the power or range you're expecting, you may be able to use this as a bargaining chip for some savings. To see the health of the car's battery, get a report from the dealership service center. You can also charge the battery to full and look at the estimated range, then compare this to the original estimated range on a full charge to get an estimate of the health of the battery.
  • Get a complete vehicle history report. One of the important things to find out in your vehicle history report is whether or not the battery has already been replaced. If the battery has been replaced and still isn't carrying the charge expected, or has already been replaced several times, you may want to reconsider.
  • Find out about the extended warranty on the car, especially the battery. New EVs typically come with an extended warranty on the battery, if nothing else. However, this warranty isn't always transferable to subsequent owners. The standard EV battery warranty is typically around eight years or 100,000 miles, whichever comes first.
  • Know the range you need and what the battery capacity is. Your dealer should be able to tell you what your original battery capacity was, and if the vehicle came equipped with any different charging capabilities. See how the capacity stacks up to the mileage you need to drive, and make sure to know where the charging stations are in your area (and what level they are) if you're going to need to charge anywhere other than at home.
  • Remember that not all EVs charge at the same rate. The cost to charge can also fluctuate more than the price of gas. Additionally, the time of day which you charge your car can impact the cost. Before truly considering an EV make sure that you're able to install a home charging port for your type of vehicle, and know how it will impact your electric usage and cost.
  • Before taking delivery of an EV make sure that all the charging accessories are included. These can cost around $300 to $600 new, and that's a hefty extra expense.

Finding an Affordable Used Car

When you're concerned with getting the most bang for your buck, but still want to be environmentally conscious, a used EV may be within your reach as a bad credit borrower. However, you're most likely going to need to shop with a special finance dealer that works with subprime lenders.

These lenders don't work everywhere, but we know where to find them at CarsDirect. You can look for new and used EVs right here with us, and when you're ready to take the plunge, simply fill out our fast, free auto loan request form and we'll get you matched with a dealership to start the process. Don't hesitate, get started now!

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Meghan Carbary has been writing professionally for nearly 20 years. A published journalist in three states, Meghan honed her skills as a feature writer and sports editor. She has now expanded her skill-set into the automotive industry as a content writer for Auto Credit Express, where she contributes to several automotive and auto finance blogs.


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