How to Finance a Used Electric Vehicle in Australia

Not everyone wants or needs a brand-new electric vehicle. The used EV market in Australia is growing, and buying second-hand can be a smart way to get into an electric vehicle at a lower price point.

But financing a used EV is a little different from financing a new one. Here is what you need to know.

Can you actually finance a used EV?

Yes, absolutely. Used EVs are financeable just like any other used vehicle. However, not every lender is equally comfortable with them. Some lenders have restrictions around the age of the vehicle, the maximum kilometres, or the battery condition.

That is where having a broker comes in handy. Rather than approaching individual lenders yourself and hoping for the best, a broker knows which lenders on their panel are happy to finance used EVs and which ones to avoid. It saves time and avoids unnecessary credit enquiries on your file.

What do lenders look at with used EVs?

Lenders will typically consider the age of the vehicle, the make and model, the asking price relative to the market value, the remaining battery capacity or health, and the vehicle's service history and odometer reading.

Battery health is the big one that is unique to EVs. A petrol car's engine degrades too, but battery capacity is easier to measure and more directly tied to the vehicle's value and usefulness. If the battery has degraded significantly, some lenders may be cautious.

How to check battery health before you buy

Before committing to a used EV, it is a good idea to get a battery health report. Some manufacturers provide this through their dealer network, and there are also independent services that can assess battery condition.

Look for the state of health (SoH) reading, which tells you what percentage of the original battery capacity remains. A used EV with 85% or more SoH is generally considered in good shape. Anything below 70% may affect both the driving range and the finance options available to you.

What finance options are available for used EVs?

The same structures that apply to new EVs apply to used ones. For personal buyers, a secured consumer loan is the most common option. For business buyers, chattel mortgage and finance lease are available, depending on your circumstances.

The main difference is that interest rates on used vehicle finance can sometimes be slightly higher than on new vehicles, and maximum loan terms may be shorter. Your broker can give you a clear picture of what is available based on the specific vehicle you are looking at.

If you are curious about chattel mortgage specifically, we have a full breakdown of how chattel mortgage works for EV buyers.

What to watch out for

Buying used always comes with some extra due diligence. With EVs specifically, keep these in mind:

• Check for any remaining manufacturer warranty, especially on the battery. Some EV manufacturers offer battery warranties of eight years or more, and this may still be valid on a used purchase.
• Confirm the vehicle has not been flood-damaged or involved in a significant accident. Water and high-voltage battery systems do not mix well.
• Make sure the charging infrastructure at your home or workplace is sorted before you buy. A used EV is only useful if you can charge it conveniently.
• If you are buying privately rather than from a dealer, get a PPSR check to make sure there is no existing finance owing on the vehicle.

Is a used EV a good deal?

It can be. You avoid the steepest part of the depreciation curve, and you still get the benefit of lower running costs. Just make sure you do your homework on the specific vehicle, especially around battery health.

If you are weighing up whether an EV is worth it financially, our comparison of EV running costs vs petrol cars might help you make the call.

For a broader overview of vehicle finance options across different asset types, Aussie Finance Hub covers the lot.