How to Purchase a Used Battery Electric Vehicle

#liverichly There are entire books devoted to their tactics, how to defeat them, and how to emerge victorious at the dealer. I’ve got a simpler solution. Never set foot on a car lot!

Last post, we went over how to pick out a vehicle. I offered the opinion that money rich and time poor people want a battery electric vehicle (BEV), and that because they are improving so quickly, we should get cheap ones and replace them regularly.

Does gasoline run in your veins? Do you have a passion for classic cars, for the roar of an engine on an open road? Do you love using a clutch to keep your motor in the power band? Well, this post isn’t for you. This post is about how to minimize the hassle of regularly replacing an inexpensive, reliable vehicle that fits your mission, so you have more money and time left over for everything else in your life!

First, let’s acknowledge a truth abut buying vehicles: dealers are out to get you.¹ Americans really only haggle on Craigslist and FB Marketplace, in giant business deals, and when buying cars and houses. Salespeople at the dealers do this all day every day, whereas you wander in only once every few years. They are going to eat your lunch! I worked at a car dealer in the back office in college, and the salespeople would come back and congratulate each other every time they ripped someone off, only to hand them off to the financing person who would really screw over the customer using complicated loans.² There are entire books devoted to their tactics, how to defeat them, and how to emerge victorious at the dealer. I’ve got a simpler solution. Never set foot on a car lot!

The moment you set foot on a car lot, the chance of paying more goes way up. Even Kelly Blue Book (KBB) will tell you this. When you put a vehicle into KBB, it will give you three prices, the amount a dealer will pay you for the vehicle, the amount a private party will buy or sell for, and the amount a dealer will sell you the vehicle for. The last one is always the highest and the first one is always the lowest. On top of that, the dealer does not respect your time. They employ tactics like, “checking with their manager” and then just go get a coffee in the back.³ They make you go over absurd amounts of paperwork that’s irrelevant. So we’re going to skip all that. We don’t have the time, and why give them the money?

So we’re going to buy our vehicle one of two ways. If it’s a Tesla or another brand that doesn’t do dealers and will sell used, just go on their website, pick out a vehicle that hasn’t been in an accident, and hit buy!⁴ Also, just as a thing, when you buy a BEV, get the version with the smaller wheels. It will have better ride quality and handling, require cheaper tires, and most importantly, have a higher range!

If, however, you want a “traditional” brand that does dealers, we’ll do classifieds instead. cars.com, cargurus.com, autotrader.com, craigslist.com, ebay.com, and many other sites offer the ability to tell whether a vehicle is being sold by a dealer or not, although many dealers lie on their listings and claim to be a private party, so be sure to discard those! Don’t buy from Carvana, CarMax, or similar, unless you need a very specific vehicle. While they mostly lack the terrible incentives and practices of traditional dealers, their prices are high and non-negotiable, and the occasional negotiation is good for you, at least if it’s an even playing field!

Are you worried you won’t get a warranty? Don’t. The service departments at dealers are where the dealers make most of their money. Even if something is covered under warranty, they’ll try to find something else to overcharge you for. BEVs generally have two kinds of problems: minor ones that you as a wealthy person will shrug and pay for, and the battery slowly aging to the point where the car is junked. One of the reasons that dealers are so hostile to BEVs is because they need so little service. You set aside some money every month with an automatic transaction for maintenance, repairs, and your next vehicle.⁵ Right? Right?

Next, let’s contact the seller and get the battery health and VIN number. Ask how far the vehicle says it will go on a full charge. Divide that into the EPA listed range.⁶ Discard any vehicles that are well below the average battery health for their mileage. This means that the original owner was probably hard on the battery, regularly running it down to 0% and charging it to 100%, instead of babying it by running it from 20% to 80% most of the time. This is not a 100% surefire way to tell the battery health, but it will get you close enough, for most vehicles. Before you buy, you should look up the actual battery health check procedure for your model and year and have the seller perform that..

Run the VIN number through carfax and make sure that it’s never been in an accident.⁷ Unfortunately, there’s a scam that Texas has failed to crack down on, so if the vehicle was originally sold somewhere outside of Texas, but then was retitled in Texas, you shouldn’t buy it. It was likely moved to Texas to hide the accident. Private parties are less likely to do this, but some dealers do it all the time, so watch out.

Pick three vehicles to test drive. If you need to go some distance to get them, make sure that you’ve pre-arranged an inspection at a local mechanic. Don’t start haggling yet. We want the seller to be set up for sunk cost fallacy.⁸ Also, why put in effort if the vehicle turns out to have some deal killer? For example, I don’t know why, but the Tesla performance seats, which are widely lauded as super comfy, are instant⁹ back-ache city for me.¹⁰

Pick the most favorable vehicle to test drive, get it checked out with your mechanic, and only after you have the bill of clean health, start haggling! We’ll go over how to negotiate in general in a future post, but a good negotiator figures out what the other party wants that you don’t value, and then gives it to them in exchange for something you do value, which is generally a lower price. Perhaps they are interested in a quick sale, or perhaps they want someone who’s going to really love the vehicle. Figure it out, and play to your strengths, but also don’t be at all afraid to walk away. There are plenty more vehicles out there. Negotiation is a life skill, and this isn’t wasted time. Practicing here will pay dividends enormously on houses, job offers, business sales, future vehicles, etc.

The seller may be worried about scams. Unfortunately, that’s part of life these days! Once you reach an agreement, you should both sign a quick "bill of sale” document, which you should have printed out and brought with you. It will say that the seller is selling you the vehicle, and have blanks for their name, price, the VIN, etc. Make sure that the bill of sale specifies that they turn over not only a valid title, but transfer control in the associated app and any accessories you want as well!

Then, offer to go with them to your bank and they can watch the cashier write a cashier’s check as they sign over the title. That way, they can be sure the cashier’s check is genuine. Alternatively, you can send them cryptocurrency such as US Dollar Coin (USDC), or even pay cash! However, if you are going to use USDC or cash, meet in a physically secure place! Never use Venmo, PayPal, Cash App, Zelle, etc. to buy a vehicle. These apps are not designed for this use-case, and there’s a good chance they will flag the transaction as fraud even when it’s not, creating enormous hassle.

Note that nowhere in this process did I talk about financing. Simply put, it’s not worth your time. Even if rates, which are above 5% as of the time of this writing, go back down, you might only earn a few hundred dollars on the time value of that money, even for a pretty expensive vehicle. And all the readers of this blog have plenty of cash to write a big check, because you’ve been saving up with an automatic transaction. Right? Right?

Lastly, it’s time to get the vehicle registered, insured, buy accessories, and customize it for you! And then, of course, you probably have a vehicle that you need to sell as well. But those are posts for next time!

Buying a BEV from a private party will take the same amount of time or less as buying from a dealer if you do it properly. It will likely save you at least 10% the cost of the vehicle, so following this process is almost certainly worth your time!

1. Look. I’m going to be really harsh on dealers here. I’m not going to say that every dealer is out to get you; it’s just that the majority of them encourage behavior that while mostly legal, doesn’t have a place in polite society. And those that do try to be honest are a dying breed, even though they were never common. Auto dealers in the USA are increasingly owned by conglomerates that rival the size of the auto manufacturers! So while I hate to write off an entire category of business in the general case, I feel justified doing it here.

2. At least the readers of this blog are less likely to fall for that bit!

3. I’ve watched them do it! And don’t think you can win by going with Carvana or similar. Yes, they won’t waste as much of your time. But you pay even higher prices.

4. Make sure you can back out if you go to pick it up and the battery health is terrible when you actually get it, but with Teslas, the only battery that has ever had problems was the 90KWhr one they put into the Models S and X for a few years. Just don’t get that trim level. Also, go on youtube and look for videos that show you what items to check when you take delivery.

Tesla will happily fix problems that are there when you pick up the vehicle, but I can pretty much guarantee that unless the previous owner went over the vehicle with a fine toothed comb, there will be something stupid and small wrong with the vehicle. Maybe a switch just isn’t hooked up. Perhaps the taillights were installed wrong and take on water, but the previous owner never noticed because the live in a desert. There will be something.

5. A warranty is a kind of insurance. Remember that all insurance is a trade of a guaranteed loss for the hope of avoiding a big loss. And the entity writing the insurance policy needs to make a profit. You’re rich, so you don’t need to worry about buying insurance for small things. You’ll just cover them out of pocket.

6. So for example, a 2020 Model X Long Range Plus advertised 371 miles of range when new. If the current owner says that it reads 352 when fully juiced up, then (352/371) * 100 = 94.9% battery health, which is pretty respectable for a 4 year old vehicle.

7. If it was anything more than a minor fender bender, the battery pack might have suffered damage. BEVs are better in many ways, but once the battery pack is bent in an accident, you may have to write off the whole vehicle due to worries about spontaneous combustion. Lithium Iron Phosphate (LFP aka LiFePO4) batteries are less susceptible to this issue.

8. Sunk cost fallacy, in this case, means the seller is going to spend some time corresponding with on you. They are going to view that time as an investment in a successful sale, so when you threaten to walk away if they don’t lower the price, they are more likely to give you the price you need.

9. Ok, it actually take 90 minutes. I must be a different shape than people who normally buy these vehicles.

10. One thing I like to do is drive new, interesting vehicles on vacations. I use Turo.com for this. For example, I have an upcoming trip and I’m renting a F150 lightning, trying it out on Tesla’s supercharging network to see if it really works seamlessly, how it does on a 2-4 hour trip, etc. That way, I get to get the fun of a new vehicle experience, and I can tell if I’d ever like to purchase a F150 Lightning of that model year and trim level someday.

I once drove a second generation Miata and the top of the windshield was precisely at eye level, so I couldn’t see a thing without craning my neck! I never would have guessed this without sitting in the cockpit, but that vehicle was entirely useless to me.