Our Electric Car Buyer's Guide: What to Look For, What to Avoid

After you decide you're ready for an EV, here's what you need to consider.

Volkswagen ID.4
Josh Lefkowitz / Getty Images

It may seem like a whole new world out there when you're thinking of purchasing an electric vehicle. Whether you're interested in reducing your environmental impact, saving money, or enjoying the thrill of new technology, buying an EV comes with some considerations that make the experience different from buying a gasoline car.

Purchase or Lease?

One upside of leasing an electric vehicle is that you may benefit from the fast pace of technology improvement in a relatively new industry. At the end of a three- or five-year lease, the same model vehicle can have an improved range by hundreds of miles.

The downside: federal tax credits (as well as any state rebates) currently only apply to the purchase of new electric vehicles, not to leases. The dealer/owner gets the tax credit. Your dealer may apply some of the tax credit to your monthly payment, but don't count on it.

Also, be aware that not every electric vehicle qualifies for a full federal tax credit, and some don't qualify at all, depending on the make. You may not qualify either: Since it's a tax credit, not a rebate, you need to owe enough in taxes to take advantage of the credit, which is deducted from what you owe rather than given to you directly. This may change, however, with new federal legislation.

Dealership or Direct?

Legacy automakers like Nissan, General Motors, or Ford sell their EVs through dealerships. EV startup companies like Tesla, Rivian, Arcimoto, or Kandi avoid the significant expense of setting up dealerships often by selling their vehicles directly off their website rather than through independent dealerships, the same way one would buy many other consumer products: No haggling, no "let me ask my manager."

Yet in more than half of the U.S., laws prevent auto manufacturers from selling cars directly to consumers, which means dealers in those states have a monopoly on car sales. In those states, buying an EV directly online might involve purchasing the vehicle unseen and accepting delivery in a nearby state that allows direct sales.

Tesla showroom in Indianapolis
Tesla is allowed to sell its vehicles in Indiana, but only after winning a legislative battle.

jetcityimage / Getty Images

New or Used?

Whether you buy a electric vehicle new or used depends on what you want to use the car for. Are you looking for a vehicle for your daily commute, to run errands around town, or for frequent long-distance travel?

As EV technology continues to improve, a used electric vehicle is likely to have a lower range than a new one. New EVs can have a range of over 200 miles, enough to cover many road trips. But the average American drives 29 miles per day, so a used vehicle with a range of only 100 miles may still fit all your needs, especially if:

  • you are able to charge your vehicle at home, meaning there is little inconvenience of having to charge your vehicle regularly;
  • you live in a two-vehicle family, where your other car is gas-powered;
  • you take very few long road trips, so renting a car on those occasions would cost less than spending the extra money on a longer-range EV.

When considering the mileage on a used electric vehicle, keep in mind that EV warranties are generally longer than those of gas-powered cars. The federal government mandates a minimum battery warranty of 8 years/100,000 miles. In California, that mandate is 10 years/150,000 miles.

Depreciation and Resale

If you're looking for a commuter car or city car, a used EV may be a bargain, depending on the model and the model year. On average, any vehicle depreciates by roughly 60% of its original purchase price in its first five years. Depreciation depends on how much the vehicle model is in demand, however, so depreciation values may vary. A top-selling model like the Tesla Model 3 can have a higher resale value than the original purchase price.

Most EVs, however, depreciate much faster than gasoline cars, due to the fast pace of technology improvements, especially in vehicle range. A 2015 Nissan Leaf with a range of 84 miles had lost more than 70% of its original purchase price by 2021, while new models had over 200 miles of range.

Note that as with any car lease, a significant portion of the lessee's monthly payment involves paying for the vehicle's depreciation. The lower the car's anticipated resale value or “residual” value, the more the lessee is paying as a percentage of the MSRP. Your money may be better spent on leasing a car with a higher resale value, even if the MSRP is higher.

Charging Plans

One of the keys to owning an EV is having a charging plan. Any EV can be plugged into a regular household outlet, and many EV owners easily get by with nothing more than that. If you plan on installing a charging station at home, however, consult an electrician to make sure your home's electricity can support 240-volt wiring. Federal tax credits of up to $1,000 are available for the purchase and installation of EV charging stations, while many states and utility companies also offer rebates or credits as well.

For public charging stations, there are numerous companies competing for your business. Each has their own proprietary charging stations and software, and often require RFID cards to use them. Sign up for each of the services in your area (they are usually free) so that you have their cards in your possession before you even get in your vehicle.

Software Considerations

Most EVs come with custom apps that allow you to program how and when your vehicle is charging, allow you to pre-heat or pre-cool it before your drive, and a number of other features. There are also numerous apps for finding public charging stations. Each charging company will have its own app-based map, but more comprehensive apps include PlugShare, A Better Route Planner, and Google Maps.

Look for a vehicle that provides over-the-air software updates, similar to the way your phone receives frequent software updates. This improves the features and efficiency (and therefore value) of your EV. Electric vehicles are essentially computers on wheels whose main function is converting electrons into motion, so it is much easier to improve the performance of an EV via software updates than it is to improve a vehicle with an internal combustion engine.

Safety Concerns

A car fire disrupting traffic in India

Mani Babbar / Getty Images

As with any car purchase, check the National Highway Traffic Safety Administration (NHTSA)'s Vehicle Ratings and Safety Issues and Recalls for safety information about any vehicle you're considering purchasing. EVs built on a skateboard platform, with their large and heavy batteries running along the bottom of the vehicle, have a lower center of gravity and thus lower rollover potential. And with no engine in front of the driver, the “crumple zone” is larger, protecting passengers by absorbing a greater amount of energy from any front-end impact.

It's easy to find news items about battery fires in electric vehicles, stories that cater to fears about new technology. What you're less likely to see are the over 150 car fires that happen every day in gasoline-powered vehicles, which, after all, run by burning a highly flammable liquid.

Unlike EV fires, which take time for heat to build up sufficient to trigger a fire, gasoline fires are explosive and instantaneous. While data is scarce on the comparative frequency of fires, a study conducted by Battelle for the NHTSA concluded that “the propensity and severity of fires and explosions from the accidental ignition of flammable electrolytic solvents used in Li-ion battery systems are anticipated to be somewhat comparable to or perhaps slightly less than those for gasoline or diesel vehicular fuels.” As the study points out, the likelihood of safety improvements is much higher in the relatively young electric vehicle industry than in the 130-year-old internal combustion engine industry.

Do Your Homework

An electric vehicle purchase is often a long-term investment, so it pays to do your research before you make a purchase rather than be surprised afterwards. That's true of any car, but with an EV, the research can bring you into unfamiliar territory. Don't let that stop you: the journey will be worth it.