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Discussion Starter #1
You might of viewed the report from AAA 2020 on cost of ownership.
Screen shot attached. I am floored on the higher cost for electric as a result of HIGHER depreciation and finance costs.
Do you buy this?
I welcome your thoughts.
ronmontreal
 

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Interesting. Depreciation has been pretty bad with EVs in the last 3 years since battery performance/range just a few a years ago was very poor and it does affect resale value. I do agree with all the other points and feel they are correct. I was looking the other day.....

Let's take the Kia Soul EV from 2016. MSRP $32,800 Today's KBB book value with 12000 Miles per year is $10000. depreciation of $22,800
2016 Kia Soul ICE, MSRP $16500 Today's KBB book value with 12000 miles per year is $10,553, a depreciation on $5947.

A huge difference. I think the tides are turning and values may hold better, but they may be right in today's outlook.
 

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The table attached doesn't say what the starting price was, or if rebates were applied. Also, the electrical cost (fuel) seems to be about double what I'd expect. Also, the distance traveled is not quoted. So it's pretty useless.

We all know that an EV costs more upfront so the depreciation will be higher. However, this is only a consideration if you plan on changing vehicles relatively quickly. If you drive a lot and/or own for a long time then the table is flat out wrong.

My Toyota Echo/Yaris averaged $CAN9.86/100 km for fuel and maintenance (excluding purchase price) over 330,000km (6.2 litres / 100 km life ave). My IONIQ is at $1.71/100 km (and I use < 0.1% free charging). And let's be honest, the Yaris is as thrifty a vehicle as you'll get AND it's definitely not in the same league as an IONIQ. I agree that an EV isn't for everyone and that in many circumstances it's not going to be financially viable, but I feel this comparison was carefully crafted to show ICE vehicles in a good light and EV's in a bad light.

My break even period over a comparable ICE vehicle (Mazda 3) taking everything into account (purchase, finance, depreciation, maintenance, etc) was about 7 yrs. But the ICE started being a little over $12,000 cheaper.
 

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Depreciation is largely linked to subsidies received on initial purchase, dropping resale price by a similar amount. Otherwise, variance from ICE cars depends on brand and model. Telsa, less. i3, Leaf, more. I would think the Ioniq falls in the middle, although the recent give away leases in the NE USA may bring it into the higher depreciation category.
 

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Discussion Starter #6
shrug My family tends to drive cars until they are a best fit for recycling. Resale has little effect in our purchasing decisions.
I do too J.

I feel I save about 90$C per month in fuel alone (for my driving profile) My insurance was even lower when i bought my IoniQ in august 19. But that depreciation threw me and that's why I sollicited some input.
regards
Ron
 

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I do too J.

I feel I save about 90$C per month in fuel alone (for my driving profile) My insurance was even lower when i bought my IoniQ in august 19. But that depreciation threw me and that's why I sollicited some input.
regards
Ron
Same with me. My documented savings on US fuel is $3.64 per day or $108 US per month. . I drive my cars until dead and revive them at least once. I never factor in depreciation in purchasing a car. Matter of fact, I typically take advantage of it for my used car purchases. I cannot wait two years to see what the Kona EVs will be selling for. Maybe under $20K.

The benefits of the EV outweigh any depreciation in my mind unless I am in a traffic accident and have a total loss. That is where it bites you. AAA assume's everyone buys a new car every 3-4 years and loves car payments. As an FYI I did a search on a posting site for used '19 Ioniq EV's in USA. Base Models are selling for $22-23K. And Limited's $26-27K. Basically $10K loss or depreciation in one year. I am glad Hyundai includes GAP insurance in the lease!

Interesting comparison though, I looked at 2019 Ioinq Hybrids. They have an MSRP of $28-29K and are still selling for $23-25K so only a $3-4K loss in depreciation.

So an EV is not the best choice for folks who care about depreciation. I think this is the point that AAA wants to make.
 

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Discussion Starter #8
I do too J.

I feel I save about 90$C per month in fuel alone (for my driving profile) My insurance was even lower when i bought my IoniQ in august 19. But that depreciation threw me and that's why I sollicited some input.
regards
Ron
Might I suggest nburd a replacement value rider on your car insurance. If you keep your car longterm, as I do,
you should have the replacement value guaranteed by your insurer at least for 6 years like I do. That way car is replaced or assured like new. No depreciation loss! Just a suggestion.
ron
 

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The substantial depreciation might be a US thing. Here in Sweden, I haven't seen the price of second hand electric cars falling any more than fossil cars. (You should of course deduct the 60,000 SEK government subsidy before you use the price of a new electric car for comparison.)

They may even keep their value better than fossil cars. There is a shortage of used electric cars that can, at least in part, be explained by the fact that they are being exported to Norway in large quantities.
 

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I a
Might I suggest nburd a replacement value rider on your car insurance. If you keep your car longterm, as I do,
you should have the replacement value guaranteed by your insurer at least for 6 years like I do. That way car is replaced or assured like new. No depreciation loss! Just a suggestion.
ron
I got the New England lease deal so if anything happens, I am still 6-8k. in the black for a few years, depreciating quickly after that. My total due Hyundai If I wreck it is $16,500. If I paid full price, then for sure I would need to look into something like that. Thanks for the recommendation. We will see what’s it books for in 2022 when the lease is up and I buy it out for $13,500. Thanks again.
 

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Discussion Starter #11
I a

I got the New England lease deal so if anything happens, I am still 6-8k. in the black for a few years, depreciating quickly after that. My total due Hyundai If I wreck it is $16,500. If I paid full price, then for sure I would need to look into something like that. Thanks for the recommendation. We will see what’s it books for in 2022 when the lease is up and I buy it out for $13,500. Thanks again.
16,500$ is a lot of green.. US or Can$. I'd be holding that steering wheel tight..but that's me! Good luck.
ron
 

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16,500$ is a lot of green.. US or Can$. I'd be holding that steering wheel tight..but that's me! Good luck.
ron
US and it’s fully insured. It’s insured for full book value by the insurance company. My total amount due to Hyundai if the car is wrecked or a total loss is $16500 with payments to date subtracted. The lease deal was essentially 1/2 of sticker . So if wrecked, I actually would come out positive for a few years. I certainly love my car and hope that does not happen. I assume it’s lost several thousand from MSRP already.

With EVs depreciating fast, it will lose value quickly.
 

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Lets see what the value is when regular hits 4$+ a gallon. Then lets see what AAA says, when people cant drive their Land Rovers anymore because they cant afford 1000$ a month.
Also- If I remember, the big hybrid scare happened back around 2005-2006 when the Honda Insight batteries started to go and it was a crisp 5000$ for a replacement battery. Those times have come and gone. Technology has advanced and these warranties are a lot better.
I still think “anticipated depreciation” is a joke and a scam for a tax write off for these companies.
 

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Lets see what the value is when regular hits 4$+ a gallon. Then lets see what AAA says, when people cant drive their Land Rovers anymore because they cant afford 1000$ a month.
We're already well past that in Sweden, which may explain why we don't see that depreciation here. The desire to own electric cars grows all the time, even though we are well behind Norway.

The gasoline here is typically around 15 SEK per liter, approximately USD 5:70 per gallon!
 

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I dont think depreciation has as much influence on used value as the rapid technology advancements. When computers first came out they were expensive but the price for new dropped rapidly as the technology advanced making used ones almost worthless. Same with EV. In about 5 years, when solid state batteries are perfected, todays EV will loose a lot of there value to obsolesces. This is why I like leasing so much.
 

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I dont think depreciation has as much influence on used value as the rapid technology advancements. When computers first came out they were expensive but the price for new dropped rapidly as the technology advanced making used ones almost worthless. Same with EV. In about 5 years, when solid state batteries are perfected, todays EV will loose a lot of there value to obsolesces. This is why I like leasing so much.
The implication in this is that current EVs may be losing notable value through depreciation on a market expectation that battery technology will improve dramatically in a relatively short period of time, or (more probably) through government actions in more ecologically-enlightened countries mandating a move away from fossil fuel vehicles causing new EVs to drop significantly in price in the near future due to growing competition in the sector.

I'm not sure either of these factors is likely - at least quickly enough that it would materially impact current EVs being sold off dealer lots, but it does seem that leasing EVs is a sensible option for many.

Personally, I'm not sure that I care much about depreciation in this context. Just about all cars lose significant value when they are driven out of the showroom for the first time. To my mind, one of the great benefits of buying my Ioniq is that it cost so much less to buy it and drive it away that the loss of value is meaningless in the context of other fuel-efficient offerings that are more expensive to buy and less efficient to run.
 

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Improving battery technology is definitely not a big factor in depreciation. Batteries are getting a little cheaper every year but the big breakthroughs promised since the 1970’s and even earlier have failed to materialize.
 

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Discussion Starter #19
The implication in this is that current EVs may be losing notable value through depreciation on a market expectation that battery technology will improve dramatically in a relatively short period of time, or (more probably) through government actions in more ecologically-enlightened countries mandating a move away from fossil fuel vehicles causing new EVs to drop significantly in price in the near future due to growing competition in the sector.

I'm not sure either of these factors is likely - at least quickly enough that it would materially impact current EVs being sold off dealer lots, but it does seem that leasing EVs is a sensible option for many.

Personally, I'm not sure that I care much about depreciation in this context. Just about all cars lose significant value when they are driven out of the showroom for the first time. To my mind, one of the great benefits of buying my Ioniq is that it cost so much less to buy it and drive it away that the loss of value is meaningless in the context of other fuel-efficient offerings that are more expensive to buy and less efficient to run.
The implication in this is that current EVs may be losing notable value through depreciation on a market expectation that battery technology will improve dramatically in a relatively short period of time, or (more probably) through government actions in more ecologically-enlightened countries mandating a move away from fossil fuel vehicles causing new EVs to drop significantly in price in the near future due to growing competition in the sector.

I'm not sure either of these factors is likely - at least quickly enough that it would materially impact current EVs being sold off dealer lots, but it does seem that leasing EVs is a sensible option for many.

Personally, I'm not sure that I care much about depreciation in this context. Just about all cars lose significant value when they are driven out of the showroom for the first time. To my mind, one of the great benefits of buying my Ioniq is that it cost so much less to buy it and drive it away that the loss of value is meaningless in the context of other fuel-efficient offerings that are more expensive to buy and less efficient to run.
I agree Andy.
 

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Discussion Starter #20
The implication in this is that current EVs may be losing notable value through depreciation on a market expectation that battery technology will improve dramatically in a relatively short period of time, or (more probably) through government actions in more ecologically-enlightened countries mandating a move away from fossil fuel vehicles causing new EVs to drop significantly in price in the near future due to growing competition in the sector.

I'm not sure either of these factors is likely - at least quickly enough that it would materially impact current EVs being sold off dealer lots, but it does seem that leasing EVs is a sensible option for many.

Personally, I'm not sure that I care much about depreciation in this context. Just about all cars lose significant value when they are driven out of the showroom for the first time. To my mind, one of the great benefits of buying my Ioniq is that it cost so much less to buy it and drive it away that the loss of value is meaningless in the context of other fuel-efficient offerings that are more expensive to buy and less efficient to run.
The implication in this is that current EVs may be losing notable value through depreciation on a market expectation that battery technology will improve dramatically in a relatively short period of time, or (more probably) through government actions in more ecologically-enlightened countries mandating a move away from fossil fuel vehicles causing new EVs to drop significantly in price in the near future due to growing competition in the sector.

I'm not sure either of these factors is likely - at least quickly enough that it would materially impact current EVs being sold off dealer lots, but it does seem that leasing EVs is a sensible option for many.

Personally, I'm not sure that I care much about depreciation in this context. Just about all cars lose significant value when they are driven out of the showroom for the first time. To my mind, one of the great benefits of buying my Ioniq is that it cost so much less to buy it and drive it away that the loss of value is meaningless in the context of other fuel-efficient offerings that are more expensive to buy and less efficient to run.
I agree Andy.
Improving battery technology is definitely not a big factor in depreciation. Batteries are getting a little cheaper every year but the big breakthroughs promised since the 1970’s and even earlier have failed to materialize.
Y
The only thing I would add is that I believe you will see more revolutionary battery technology improvements in the years ahead (5) that will make the last 35 years pale in comparison.
 
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