Why 2026 is the Best Year to Buy a Used EV

Here's a twist of irony for you: the $7,500 federal EV tax credit is gone, and that's actually about to make EVs more affordable. Not new ones—used ones. And 2026 is shaping up to be the best year in history to buy a pre-owned electric vehicle.

Let me explain the economics that are about to reshape the used car market.

The Lease Tsunami is Coming

Between January 2023 and September 2025, over 1.1 million EVs were leased under incredibly attractive terms—terms made possible by the federal government's Commercial Clean Vehicle Credit. Automakers called it a "capital cost reduction," but the money came straight from IRS Section 45W.

That credit turbocharged EV leasing. According to Cox Automotive, nearly half of all franchise EV sales were leases by 2024. Now those 36-month leases are expiring, and the cars are flooding back into the market.

Why Most Lessees Won't Buy Their Cars

Here's the key insight: when these leases were written in 2022-2023, automakers assumed EVs would retain about 50% of their value. Reality check: they're only retaining about 40%.

That means the buyout prices on these leases are higher than what the cars are actually worth on the open market. Most drivers are going to turn in their keys rather than overpay for a vehicle they could buy cheaper at a dealership.

Which Models Will Flood the Market?

Cox Automotive has identified the EVs that will dominate lease returns over the next few years:

But What About the Battery?

This is the question everyone asks, and the data is reassuring. Modern EV batteries hold up remarkably well. Study after study shows that most EVs retain 80-90% of their battery capacity after 36,000 miles.

The Price Comparison That Matters

Here's where things get interesting. According to Edmunds, the average used EV price is now just $900 above comparable gas-powered vehicles. As the lease returns flood the market, that gap is expected to flip.

When to Buy: The Timeline

The lease return surge really kicks into high gear starting in April 2026, when those 36-month leases written in April 2023 start expiring. Here's what to expect:

What to Look for When Buying

The Bottom Line

The federal tax credit created an artificial boom in EV leasing. Now that credit is gone, and those subsidized leases are returning to market. What was once a government program to boost new EV sales is about to become the best thing that ever happened to used EV buyers.

The irony is delicious: federal subsidies inflated new EV demand through generous lease incentives, and now that bubble is deflating right into the used market—without any subsidies needed to bridge the affordability gap.

If you've been on the fence about going electric, 2026 might be your year. A three-year-old Tesla Model Y or Hyundai Ioniq 5 with low miles and warranty remaining could be yours for thousands less than a new compact SUV—and you'll never pay for gas again.