Used Car Cost Comparison

I have been looking at used electric vehicles as my next car purchase and am finding quite a few low-mileage Nissan Leafs along with a few other brands. It can be difficult to decide what is the best deal, so I have been working on a quantitative approach to determining this. I am planning on taking advantage of the federal tax credit for used cars, which means the car price cannot exceed $25,000 and it needs to be a 1-owner car at least 2 years old.

Here is what I have so far (explanations follow the table):

Car Purchase Price Sale Price Mileage Age Certified? Price Ratio Mileage Ratio Overall Ratio
2020 Nissan Leaf SV $38,410 $23451 17266 3 Yes .40 .48 .83
2019 Hyundai Ioniq Limited $37,745 $22900 26490 4 Yes .40 .55 .73
2018 Kia Soul EV Plus $37,035 $18400 37055 5 No .50 .62 .81
2020 Nissan Leaf SV $39.105 $23488 13188 3 No .40 .37 1.09
2020 Nissan Leaf SV $38,490 $23888 16123 3 No .38 .45 .85

These are cars within a 75-mile radius of my house. The purchase price is the original price as shown on the original sticker that is available in the Carfax. The sale price is the current asking price (side note: not one of them is willing to budge on the price). The price ratio is calculated by the following formula: [(Purchase price - Sale Price * (1-.018)) / Purchase Price]. The .018 is an attempt to normalize the sale price due to whether or not it is certified. Kelly Blue Book says there is a 1.8% increase, although I have seen some sites say it is as high as 5% to 8%. The mileage ratio is calculated by the following formula: [Mileage / (12000 * Age)]. The 12000 represents the average miles per year a typical car is driven. I know this number varies as well depending on the site. The price ratio should be as high as possible while the mileage ratio should be as low as possible. Therefore, to calculate the overall ratio: [Price ratio / Mileage ratio]. This number should be as high as possible.

I had been focusing on the first car in this list since it is certified, however my analysis shows that the best deal is actually the Leaf with the 1.09 ratio. I played with changing the certification from 1.8% to as high as 10%, but it doesn't change the numbers enough. Can anyone comment on if this is a valid approach, or is this an exercise in futility? Maybe there is a better way for me to take certification into account? I have this table in Microsoft Excel, so it makes it easy to change numbers around to see the effect. I am curious about any thoughts on this.

I won't comment on the financials, but instead on value for money. The 2020 Leaf appears to me to be the best Leaf every made. In 2021 they made changes to the throttle and brake pedal that I found distinctly worse. My 2021 also had a defective blower motor, which I just got replaced under warranty.

I think the tax credit for used cars only applies to cars bought from a dealer. I don't know how that works with 'one-owner' but maybe the dealer doesn't count. Just FYI in case you were not aware.

goldbrick said:

I think the tax credit for used cars only applies to cars bought from a dealer.

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Indeed.

Mentioned at https://www.irs.gov/credits-deductions/used-clean-vehicle-credit. D, E and F at https://www.irs.gov/newsroom/frequently-asked-questions-about-the-new-previously-owned-and-qualified-commercial-clean-vehicles-credit can also help.

Yes, all of these cars are at dealerships, so they should all be eligible for the $4000 credit, plus another $2000 in PA. I also found a 2019 Bolt at a nearby dealership that seems to be a good deal as well.

Once you add in sales tax/fees it may just be better to purchase a brand new 2023 Leaf S 40 KWh version and take the $7,500 Federal Tax Credit. In my area, the net price of a new S comes to $26,400 after sales tax and fees and the tax credit.

When I use a quantitative method I also focus in on the battery KWh. A Used 2019 Leaf Plus with the 62 KWh battery after four years should generally have about 80% capacity remaining or a range of 173 or more. Compared to the New 2023 Leaf's 40KWh and 149 mile range.

Perhaps a price per KWh calculation is more revealing. Of course, you would want to use the Leafspy app to verify battery state of health on any used Leaf or a similar app on the other contenders.

Using the $24,000 used leaf prices from your calculation and assuming they have the 62KWh battery and are three years old with 84% capacity remaining or 52.6 KWh the cost per KWh on the used would be $456.27 per KWh. After factoring in tax/fees and the $4,000 credit you would be around $22,720 (depending on your local taxes/fees) or $431 per KWh depending on your tax/fees.

If the Used Leafs you are looking at are only came with the 40KWh battery and are down 84% to 34 KWh, capacity, the $22,700 net cost above would result in a cost per KWH of $667.

The New Leaf S at $30,650 and 40 KWh would be $766 per KWh before the federal tax credit and tax and fees. After all taxes/fees and the $7,500 federal tax credit the cost for the S would be $23,700 in an area with an 8.35 sales tax rate. The net cost per KWh now drops to $592

The New 2023 40 KWh Leaf would be the superior purchase in a strictly financial sense, if you are comparing New vs Used 40 KWh battery Leafs.

However, a one-owner Leaf Plus with the 62 KWh that has a good state of health will likely be the better choice in financial terms.

A new leaf also eliminates the unknown vehicle history and provides greater warranty coverage. If you factor in what the value of "new" means to you in dollar terms, you likely have a your answer.

However, everyone values different elements when purchasing a vehicle. I may value new, the red color and a 62KWh battery. Someone else may value technology, blue color and the 40 KWh battery. By placing values to what is important to you is what is important. Two months after you buy a vehicle none of these calculations will matter to most people.

Kopavi said:

Once you add in sales tax/fees it may just be better to purchase a brand new 2023 Leaf S 40 KWh version and take the $7,500 Federal Tax Credit. In my area, the net price of a new S comes to $26,400 after sales tax and fees and the tax credit.

When I use a quantitative method I also focus in on the battery KWh. A Used 2019 Leaf Plus with the 62 KWh battery after four years should generally have about 80% capacity remaining or a range of 173 or more. Compared to the New 2023 Leaf's 40KWh and 149 mile range.

Perhaps a price per KWh calculation is more revealing. Of course, you would want to use the Leafspy app to verify battery state of health on any used Leaf or a similar app on the other contenders.

Using the $24,000 used leaf prices from your calculation and assuming they have the 62KWh battery and are three years old with 84% capacity remaining or 52.6 KWh the cost per KWh on the used would be $456.27 per KWh. After factoring in tax/fees and the $4,000 credit you would be around $22,720 (depending on your local taxes/fees) or $431 per KWh depending on your tax/fees.

If the Used Leafs you are looking at are only came with the 40KWh battery and are down 84% to 34 KWh, capacity, the $22,700 net cost above would result in a cost per KWH of $667.

The New Leaf S at $30,650 and 40 KWh would be $766 per KWh before the federal tax credit and tax and fees. After all taxes/fees and the $7,500 federal tax credit the cost for the S would be $23,700 in an area with an 8.35 sales tax rate. The net cost per KWh now drops to $592

The New 2023 40 KWh Leaf would be the superior purchase in a strictly financial sense, if you are comparing New vs Used 40 KWh battery Leafs.

However, a one-owner Leaf Plus with the 62 KWh that has a good state of health will likely be the better choice in financial terms.

A new leaf also eliminates the unknown vehicle history and provides greater warranty coverage. If you factor in what the value of "new" means to you in dollar terms, you likely have a your answer.

However, everyone values different elements when purchasing a vehicle. I may value new, the red color and a 62KWh battery. Someone else may value technology, blue color and the 40 KWh battery. By placing values to what is important to you is what is important. Two months after you buy a vehicle none of these calculations will matter to most people.

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You make a good point about the battery size. The problem I have is there are no new Leafs available right now in my area, so I would need to order one. Plus, my tax liability is not quite high enough to get the full amount (I would probably be around $6000).
Unfortunately, the IRS is expected to release the battery requirements any day now, and it is expected the Leaf may only qualify for half of the tax credit. To get the full tax credit, one has to be in possession of the vehicle prior to release of the battery guidance update. This is why I have been delaying my purchase. Also, another advantage is that for a used car I can get a trim level that is otherwise out of my price range. In any case, you have given me something else to think about, which I do appreciate.