New vs Used EV: Which Actually Makes More Financial Sense?

Key Facts Panel

• First-year depreciation: New EVs lose around 25% of value in year one, compared to 11.5% for petrol cars and just 1.7% for hybrids (AADA/AutoGrab 2025 Annual Automotive Insights Report)

• Multi-year retention: EVs retain roughly 68.7% of value after two years and 60.3% after three, against 92.4% for hybrids at the three-year mark (AutoGrab 2024 report, most recent published dataset)

• Used EV market momentum: Used battery EV sales grew 54.6% in the first half of 2026, with average days-to-sell falling from over 60 in January to under 40 by June (AADA)

• Real examples of the discount: A 2022 Tesla Model Y RWD is now around 48% cheaper than its original price, and the BYD Atto 3 is down roughly 39% (Savvy/RedBook data, March 2026)

• Battery protection either way: Most EVs carry 8-year/160,000km battery warranties that transfer to subsequent owners, reducing the used-buyer battery risk that used to scare people off

• Do this: if your budget is under $35,000 and you want the most car for your money, seriously shop the used market right now, prices have fallen faster than most buyers realise.

• Don't do this: assume a used EV automatically saves you money if you're relying on a novated lease and the FBT exemption, that benefit is strongest on new vehicles and needs checking carefully against a used purchase.

If you're weighing up a new EV against a used one, the maths has genuinely shifted in the last year. Used EV prices have fallen hard, some models are down close to half their original value, while new EV pricing keeps dropping too. Here's what the actual numbers say about new vs used EV Australia, not the outdated "EVs depreciate like a rock" narrative still doing the rounds.

Why new vs used EV depreciation story has changed

For years, "EVs depreciate faster than petrol cars" was simply true, and it scared a lot of buyers away from both new and used purchases. The AADA and AutoGrab data confirms that story isn't wrong even now: new EVs still lose value faster in year one than petrol or hybrid equivalents.

But the second half of that story matters just as much. Used EV demand has surged through 2026, driven partly by petrol prices spiking toward $2.50 a litre earlier in the year.

Used battery EV sales jumped 138% month-on-month in March alone, and values have been stabilising since January with upward pressure since March.

Manufacturers have noticed too, Tesla partnered with finance company Driva in July 2026 to offer guaranteed future value loans on new Model 3 and Model Y purchases, effectively underwriting resale confidence directly.

What This Means for Buying New vs Used

Factor	Buying New	Buying Used
Upfront price	Highest	Meaningfully lower, some models 40-50% below original price
FBT exemption eligibility	Full exemption available if under threshold and novated	Possible only if the vehicle was first held/used after 1 July 2022, worth confirming with your lease provider
Battery warranty	Full term from day one	Remaining term transfers, still meaningful protection on most models
Depreciation risk from here	You absorb the steepest year-one drop	Someone else already absorbed it, values are stabilising
Model choice	Full current range	Limited to what's actually listed, and some older models lack modern range/tech

The used market genuinely favours buyers with a tighter budget who don't need the newest tech, while new EVs make more sense if you're leasing through a novated arrangement where the FBT exemption materially changes the calculation, or if you specifically want a model that's too new to appear in the used market yet.

Which Used EVs Are Holding Value Best

Not all used EVs are equal on resale.

The strongest performers in the 2026 used market are the BYD Atto 3 (original and Extended Range variants), the 2025 Tesla Model Y Juniper, the Kia EV6, and the Hyundai Ioniq 5. These share two things: strong demand in the used market, and 800V or advanced 400V charging architecture that buyers aren't worried about being outdated in a few years.

Buy or Avoid: The Verdict

Buy used if: your budget is tight, you don't need the latest model year, and you want to take advantage of prices that have genuinely fallen faster than new EV prices over the same period.

Buy new if: you're using a novated lease and want the full FBT exemption without any eligibility questions, or you want a specific current-generation model with the longest possible warranty runway ahead of you.

FAQs

Are used EVs actually cheaper than new EVs in Australia now? Yes, significantly. Some models like the 2022 Tesla Model Y RWD are now around 48% cheaper than their original price, and used EV sales grew 54.6% in the first half of 2026 as buyers took advantage of falling prices.

Do used EVs still have battery warranty coverage? Most EVs carry 8-year/160,000km battery warranties from the original in-service date, and this coverage typically transfers to the next owner for whatever term remains.

Can I get the FBT exemption on a used EV novated lease? Potentially, but it depends on when the vehicle was first held or used. Confirm eligibility directly with your novated lease provider before assuming a used EV qualifies the same way a new one does.

Which used EVs hold their value best in Australia? The BYD Atto 3, 2025 Tesla Model Y Juniper, Kia EV6 and Hyundai Ioniq 5 are currently performing best in the used market, thanks to strong demand and modern charging architecture.