Plug-in hybrids (aka PHEVs) have been around for a while now. That means the cutting-edge vehicles of a few years ago are now coming off leases and ending up on used car lots. A used PHEV can be tempting, especially with (at least for now) the potential eligibility for a federal tax credit. But the prospect may also cause more trepidation than a typical used car purchase.
PHEVs are more complicated than combustion cars — and have complications buyers aren’t familiar with. Some high-profile PHEVs have been subject to recalls and suffered reliability issues. Battery technology and the market are also evolving. So, we don’t know precisely how PHEVs will age and how much buyers will value them when they do.
As with any used car purchase, prospective buyers must do their due diligence and answer some critical questions before proceeding.
How do you plan to charge and drive the PHEV?
The first natural question when buying a plug-in hybrid: do you need one? A plug-in hybrid can seem like the “best of both worlds” on paper. But theory differs from practice.
The optimal environment for using a PHEV — short trips, convenient plug access — overlaps heavily with the optimal use case for an EV. Buyer fear or being unable to buy the type of car desired (a used three-row family minivan, for instance) as an EV may be the reason to go PHEV.
Alternatively, if a buyer has a legitimate concern that would preclude an EV — lengthy roundtrip commutes or long road trips — a conventional hybrid would likely deliver as good if not better efficiency, cost less up front and be less of a nuisance.
PHEVs can make a lot of sense and be very efficient — when you can charge them regularly with regular plug access. Helpfully, buyers don’t need to install a Level 2 charger. Many PHEV batteries can be charged overnight on a standard 110V wall outlet. Ideally, the manufacturer-provided charging cable is in working order. If not, buyers can typically purchase a third-party portable charging cable for between $100 and $200.
Is the used PHEV eligible for the federal tax credit?
For now, a used plug-in hybrid can still be eligible for a federal clean vehicle tax credit worth up to $4,000. The vehicle and the buyer must meet certain thresholds to qualify.
The vehicle must be sold from a dealer, be priced at or below $25,000 and must be at least two years out from the calendar year in which it is bought (in 2024, it would have to be the 2022 model year or older). The PHEV’s battery pack must have a capacity of at least 7 kWh and a GVWR under 14,000 pounds.
The federal tax credit is income-limited for the buyer. A buyer may not have earned more than $150,000 as a joint filer, $112,500 as a head of household or $75,000 as an individual.
How much battery warranty does the used PHEV have?
Replacing a battery on a plug-in hybrid is a rare occurrence. The failure rate on PHEV batteries in vehicles built in 2016 and later — not counting recalled vehicles — is “well under one percent.” But if you need to replace the PHEV battery, it’s a repair that can cost several thousand dollars. And it’s something you’d ideally want to do under warranty.
PHEVs typically have bumper-to-bumper and powertrain warranties similar to those of combustion vehicles. But many newer ones also have battery warranties stretching to 100,000 or even 150,000 miles. A battery warranty is great for peace of mind when buying a used PHEV. It should also help protect resale value on the back end if the buyer doesn’t keep the vehicle past that 100,000-mile mark.
Has the PHEV battery degraded over time?
All batteries degrade over time. But degradation should not be too much of a concern when buying a used plug-in hybrid — at least a recent vintage one. Vehicle batteries are lasting longer than manufacturers initially feared. Rates of degradation depend on the individual vehicle and aren’t always linear. But broadly, a PHEV battery should stay in the usable range (at least 70-80% of its initial capacity) past 100,000 miles.
PHEV batteries, in particular, are designed to be resilient. Most PHEV batteries have a lot of unused capacity. That lets the PHEV battery, constantly being filled to 100 and drained to 0, stay within a happy operating range and place less stress on the battery.
Range loss also matters less for PHEVs than EVs. Let’s presume a battery experiences a 10 percent range loss. An EV offering 225 miles of range instead of its initial 250 miles is a bigger deal than a 27-mile range PHEV offering 24 miles before the gas engine kicks in.
Testing degradation yourself will be tricky; most dealers won’t let you borrow the car, drain the battery with simulated daily usage, and compare it to expected results. The dealership should be able to provide a battery health test to determine the state of the vehicle’s battery. Failure to do that should raise suspicion. So should a posted range figure on a full charge that looks far less than what it should be.
Do you plan to drive your used PHEV in cold weather?
Like full EVs, plug-in hybrids can lose all-electric range in extremely cold weather. Like in EVs, the main culprit is heating the cabin, which is hard to do efficiently. Heat pumps allow a vehicle to warm the cabin more efficiently. But that technology is relatively new for full EVs, let alone PHEVs.
Some PHEVs use an electric heater, which saps power and, consequently, range from the battery. Other PHEVs don’t have an electric component for heating and run the gasoline engine when needed to heat the vehicle. Either way, you can lose much of the efficiency you typically would gain driving a PHEV, especially an older PHEV with less than 20 miles of range.
Has the used PHEV been appropriately serviced?
Service history is essential when buying any new car. A plug-in hybrid can be the worst of both worlds from a service perspective. You have intricate and expensive battery packs and electric motors like an EV. But unlike an EV, you also have all the moving parts and traditional maintenance required for a combustion vehicle.
Ensure the seller has detailed, up-to-date service records and that necessary services have been performed. Like EVs, PHEVs can be harder on their tires than combustion vehicles with the additional weight. Ensure the tires are in good condition and formulated to handle the extra burden from the plug-in hybrid.
Has the PHEV’s software been updated?
All cars are de facto tech products now. Many modern reliability issues are going to be software-related rather than mechanical. You want to ensure that a used PHEV has installed all of its software updates and that the interface works correctly.
A newer infotainment system — less likely to be outmoded and more likely to be supported with updates — is better than an older one. The capability to do over-the-air software updates without a trip to the dealer is also helpful.
Conclusion: Should you buy a used plug-in hybrid?
A plug-in hybrid should not scare used car buyers off in a vacuum. Yes, a PHEV will lose efficiency and performance as it ages. But so do combustion vehicles. The expected lifespan for the battery is not that far off most combustion engines. With due diligence, buyers can be confident about what they are buying. The ultimate question with a used PHEV is not so much whether buying one is prudent but whether a PHEV is the vehicle you need.
If a buyer does opt for a used PHEV, the best strategy is to find the newest vehicle with the least wear and tear available within the budget. PHEV tech has become more capable and more resilient in recent years. A longer remaining lifespan means greater value, whether that means a longer ownership tenure or better back-end resale value.
