Used EVs to Flood Market in 2026, Prices Will Drop

If you've been waiting to buy an electric vehicle, your patience is about to pay off in a big way.

Starting in April 2026, over a million three-year-old EVs will flood used car lots across America. These vehicles were leased between 2023 and 2025 under highly attractive terms made possible by a $7,500 federal credit that no longer exists.

The timing creates a perfect storm for buyers. Nearly 60 percent of new EVs sold in early 2025 were leased rather than purchased, compared to just 30 percent of regular cars before the pandemic. All those leases are now coming due at once.

Here's why prices will drop. Most lease buyout prices were set higher than current market values, so drivers will simply return their vehicles instead of purchasing them. That means dealerships will suddenly have way more used EVs than usual competing for buyers.

Cox Automotive predicts EVs will jump from 5 percent to 15 percent of all lease returns at their wholesale auctions between September 2025 and September 2026. By 2027, nearly one in five lease returns will be electric vehicles.

The most common models hitting lots will be Tesla Model Y and Model 3, Hyundai Ioniq 5, Volkswagen ID.4, and Ford Mustang Mach-E. These aren't beat-up clunkers—they're well-maintained, three-year-old vehicles with plenty of life left.

The Bright Side

This inventory surge means everyday families can finally afford to go electric without the new-car sticker shock. Dealers are preparing certified pre-owned programs with battery warranties to give buyers confidence.

CarMax notes that when inventory increases, it creates "a wider range of more affordable options for customers." Translation: competition drives prices down, and buyers win.

Scott Case from Recurrent sees this as the moment when EVs truly go mainstream. Second-time buyers who want to upgrade and families ready to add an EV as their second car will finally have affordable options that fit their budgets.

If you already own a newer EV and plan to trade it in, experts suggest doing it sooner rather than later. But if you're shopping? Wait until spring 2026 when selection peaks and dealers are motivated to move inventory.

The federal credit may be gone, but it created something even better: a massive supply of quality used EVs about to become accessible to millions more Americans.