EV Prices Are Down, but It's Still Not a Good Time to Buy One

Over the past few years, car prices have soared amid rising inflation and supply chain shortages. But at least one vehicle category is beginning to see prices come down. The latest research from Kelley Blue Book shows that new electric vehicle prices are down 20% from last year. Plus, data from iSeeCars says used EV prices have tumbled nearly 30%.

That's brought the average price of a used EV to just under $41,000 and the average cost of a new EV down to around $53,400. But while these prices reflect a significant decrease over the past year, there may be more room for them to fall.

EV prices may fall further

iSeeCars Executive Analyst Karl Brauer said in a recent research report that used electric vehicle prices are in a "free fall" as demand has tapered off.

According to the report, one of the reasons why prices are falling is because gas is cheaper now. According to AAA, the average price per gallon of gas is about $0.34 cheaper than it was last year.

But prices are also falling because there's more used EV inventory available. The report noted that used EV prices are falling 10 times faster than the average used vehicle price thanks to slowing demand and more EV supply. Similarly, KBB says there are far more new EVs in supply -- 103 days of inventory -- than the typical automotive industry average of 53.

The rise in new inventory has led to some automakers cutting the prices of new models, bringing down the cost of used EVs. The iSeeCars analysis noted that when Tesla cut the prices of its new vehicles this year, it caused the value of used EVs to drop because the automaker accounts for a large part of the U.S. EV market.

And there will likely be more EV inventory on car lots in the coming years. Automakers are poised to release 90 new electric vehicle models over the next three years, which could put further pressure on prices.

Money-saving tips for EV buyers

If you need a new vehicle now and are considering an EV, there are a few things you can do to ensure you're getting the best deal possible and keeping your personal finances on track.

The first, and probably most important, is to take some time comparing the best auto loans. Not every lender will offer you the same interest rate on your loan or the same fees, so it pays to spend some time finding the one that best suits your needs.

You may also want to look at any available tax credits. There are tax credits worth up to $7,500 for new EVs and up to $4,500 for used EVs. You'll need to do a little research ahead of time because not all EVs qualify for the credits. You can find a complete list of EV tax credits here.

It's worth keeping in mind that EVs are typically more expensive to insure than the average car. Auto insurance rates are already high right now, and EVs add to that cost even more because they're more expensive to replace. Shopping around with different auto insurance companies could help keep your EV costs a little lower.

And if all of this sounds too expensive right now, remember that as more EVs hit the market soon, you may have better options as automakers compete for new EV drivers.