Insurance for Used EVs: Risks, Costs, and What to Look For

Historically, the used EV market has been quite sparse. EVs are still a relatively new market, and used inventory has been limited as drivers continue to adopt this new technology. In recent months, however, there has been a sizable increase in the used EV market as leases from the last few years expire and vehicles are returned to dealerships.

According to a new Cox Automotive study, used EV sales in January were up 21 percent year-over-year and up 20 percent compared to December 2025.¹ The most popular used EV brands were Tesla, Audi, Ford, Chevrolet, and BMW.

Federal EV tax credits expired on September 30, 2025, which has resulted in slightly lower market prices for both new and used EVs as manufacturers and dealers look to make up for the loss of these financial incentives, based on new data from iSeeCars.com.² Most used electric vehicles have seen an average price decrease of around 4 percent, the notable exception being Teslas, which have increased by around the same amount.

While data on insurance costs for used EVs is not widely available, in general, EVs cost an average of $3,613 annually to insure, compared to $2,356 for all car types. Of course, these are general trends and not absolutes. Insurance rates depend on many different factors, and some EV drivers pay less for car insurance than some gas car drivers. And in most cases, a used EV will be cheaper to insure than a new one.

The main reasons why EVs tend to be more expensive to insure than gas cars come down to purchase price and repair costs. Generally speaking, the more expensive a car is to buy, the more it costs to insure. However, purchase price is less of a factor when it comes to used EVs, as they are priced comparably to gas-powered vehicles. Part of the reason for this is that EVs depreciate faster than gas-powered cars.

The iSeeCars.com study indicates that, since the expiration of the federal tax credits, the average price of used EVs between one and five years old is $30,666, while the average price of used internal combustion engine cars is $31,249. The average cost of used EVs is even lower when Teslas are taken out of the equation.

Specialized Repairs Lead to Higher Costs

EVs require specialized parts and labor, so they tend to be expensive to repair if they’re damaged. Unfortunately, this is the case even if you buy a used EV. The most expensive part, by far, is the battery, which costs thousands of dollars to replace and presents the biggest risk to insurers.

Additionally, some repairs for gas-powered vehicles can be done more affordably using aftermarket parts, but there is not as big a market for these types of parts for EVs, further driving up repair costs. There also isn’t as wide a network of repair shops and technicians who are trained to work on EVs, so repairs can take longer and may be priced at a premium.

Even if you get a good deal on a used electric car, you’ll still need to factor in repair and insurance costs.

Here are some considerations to think about if you’re going to be purchasing and insuring a used EV in the near future.

Battery-Related Risks

As mentioned earlier, the battery is the most important and most expensive component in an electric car. EV batteries are designed to last a long time — usually at least eight years — but many factors can affect their usable life, including charging habits and climate exposure. When buying a used EV, it’s important to verify the vehicle’s maintenance history and current estimated range. Keep in mind that standard insurance will not cover gradual battery wear and tear.

EV batteries present a complex risk to insurers, as they often cannot be repaired the way a gas engine can, and replacement can easily cost more than the vehicle’s actual cash value (ACV). This leads to EVs being more likely to be declared total losses than gas-powered cars, particularly used EVs, as they’re already older at the time of purchase and have lower value.

Some insurers may take the battery degradation into account when determining the vehicle’s ACV, though it can be tricky to prove, especially if the battery was damaged in an accident.

When shopping around for insurance for a used EV, here are some tips to help you get the best possible rate:

• Get multiple quotes: No matter what type of car you’re looking to insure, always shop around for several quotes before making a decision. Rates can vary greatly, particularly when it comes to used EVs, so it’s a good idea to get quotes from at least three companies, if not more.
• Consider increasing your deductibles: If you’re getting full coverage insurance, consider choosing a higher deductible for your comprehensive and collision coverages. Higher deductibles result in lower premiums and can help somewhat offset the higher cost of EV insurance.
• Bundle policies: Most insurers offer bundling discounts for purchasing more than one policy type, and they work the same for electric cars. As long as you have an auto policy and a second (or more) qualifying policy, you should be eligible for a discount. The biggest savings usually come from bundling auto with home insurance.
• Ask about discounts: In addition to bundling, there are many discounts that EV owners can take advantage of. Some companies, such as Travelers, even offer a discount specific to EV drivers. Other common potential discounts include good driver, low mileage, and good student discounts.

Buying a used EV can provide significant savings compared with buying a new one, but insurance is an important ownership cost to keep in mind. Factors like specialized repair requirements lead to higher premiums for both new and used EVs.

Before purchasing, it’s worth comparing insurance quotes and understanding how insurers value EV components to avoid surprises and ensure a used electric vehicle makes sense financially when taking the full cost of ownership into account.