EV Depreciation

maidhc

https://www.boards.ie/discussion/comment/121544849#Comment_121544849

In fairness it’s a fair response to EV evangelism. If your comments are even slightly directed to me you will note I have posted on and off here for the bones of two decades, mostly on motors issues.

the entire point is that not everything suits everyone. Right now I have a pure hybrid, a phev, a 20 year old landcruiser and a 75hp van that is driven by my employees in my driveway. They are all very different beasts, and the phev will cost 8k to move up 2x years next week (topic). My view is the phev is the best compromise for now and is holding its value well as a result.

Mind you the reference to cordless drills is flawed, they haven’t really moved at all since 2016, indeed I replaced my Dewalt dcd996 from that vintage last week with the same model.

Gumbo

https://www.boards.ie/discussion/comment/121545189#Comment_121545189

Was not, in any way referencing yourself.

The funny thing is that some of still have ICE too, including diesels and petrols. You buy the right tool for the job and all that.

Im looking out into the garden at 2x 520d’s and a transit at the moment 😂

waterwelly

https://www.boards.ie/discussion/comment/121544849#Comment_121544849

Bit of a rant there.

This is a thread about EV depreciation.

It would be very unfair on a potential EV driver to only see biased "everything is rosy in the garden" inputs.

Gumbo

https://www.boards.ie/discussion/comment/121545384#Comment_121545384

I copied the format of your post. I guess you consider yours not to be a rant ?

Depreciation in cars should be a given to anybody considering buying a car. It’s basic economics.

Casati

https://www.boards.ie/discussion/comment/121545189#Comment_121545189

Is that 8k to move up 2 years in a 50k+ RAV4?

McCrack

Electric cars are very boring. They are bland and uninspiring and most are bought on finance by folks that can't afford them. There's far more interesting and enjoyable cars to drive that are not electric and can be picked up far cheaper than some new electric car on tick that everyone else has and paying loan interest too.

tommythecat

https://www.boards.ie/discussion/comment/121546244#Comment_121546244

Which ones have you driven that are bland and uninspiring?

Buddy Bubs

https://www.boards.ie/discussion/comment/121546244#Comment_121546244

Like what?

eastie17

Turning into a ridiculous circular thread and is now totally off topic.

I own an EV, bought it a year ago and am perfectly happy with it. I know the drawbacks and did my research before buying. There are pros and cons to both types of cars and I dunno why this has become such a “my choice is better than ur choice and I won’t stop until u admit mine is better” nonsense conversation.

now back to the topic, anyone got thoughts on the floor for EV depreciation? I know cars generally depreciate forever until they become classics or worthless but the annual percentage drop does seem to be greater than ICE at the moment

Tesla's R ****. /end thread

Gumbo

When the afterhours idiots find an active thread!

Gumbo

https://www.boards.ie/discussion/comment/121546318#Comment_121546318

50% after 3 years seems to be about right.

After that, continue along the curve.

Casati

https://www.boards.ie/discussion/comment/121544514#Comment_121544514

Just because govt is pushing EV’s it certainly doesn’t mean that not following means you are conservative or resisting change, it could be simply because EV’s are too flawed currently for most drivers to consider one. In 2008 our govt pushed us to diesels and sales doubled to 70% of the market. Those that stayed petrol because they saw diesel wouldn’t work for them

gammon199

https://www.boards.ie/discussion/comment/121546422#Comment_121546422

Whatever the government are pushing, do the opposite

Usually works out well in the end.

Gumbo

https://www.boards.ie/discussion/comment/121546445#Comment_121546445

I seen that quote on Tic Tok on stupid immigration videos.

gammon199

https://www.boards.ie/discussion/comment/121546472#Comment_121546472

Saw

PaoloGotti

Any car both on finance was not affordable. Unless you can pay cash for a car twice over tomorrow then you can’t afford it, by my strict definition.

Edit: that was intended as a reply to specific post that didn’t work.

gammon199

https://www.boards.ie/discussion/comment/121546511#Comment_121546511

I would agree with that too

Shouldn't be spending any more than 25% of your yearly salary on car

Earn 40k, get a 10k car

Earn 100k get a 25k car

Earn 250k, get a nice 50k Tesla

Seeing people in cars worth a years salary is embarrassing

PaoloGotti

I thought I was strict!

I set it at 50% of annual take home salary. But I have no other debt.

mun1

Id say the smaller battery EV’s are gong to take a bath as PCP deals end and all the negative press (and rightly so) about public charging kick in. You can see it already with the Leaf. First thing anyone mentions is the 150km real winter range on the motorway, not the spec, heated seats, cruise control etc.

gammon199

https://www.boards.ie/discussion/comment/121546542#Comment_121546542

That 25% is actually high, 20% used to be the rule of thumb before easy credit.

Car was just A to B for many, housing, education, marital, family, holidays usually came first and still does for me.

FaaF

https://www.boards.ie/discussion/comment/121546526#Comment_121546526

Probably one of the most ridiculous posts I've seen in a while.

If you love cars and have the cash, buy whatever you want. Screw any calculations based on salary.

Besides, working off a flat 25% is madness, even if you were that way inclined. It's all about savings and disposable income.

Why should someone who inherited their forever home force themselves to spend the same maximum percentage of income versus someone who's saving hard for a deposit for their first home whilst spending 30%+ of their salary in rent?

mun1

https://www.boards.ie/discussion/comment/121546586#Comment_121546586

I bought a Tesla MY LR , which cost about 55% of my take home pay. Luckily, I had a trade in which meant i only paid out 8% of my take home pay. Don’t have any other debts, and the tesla is the best car i ever had, from a driving, economical and technology POV.

on the question of EV depreciation, there was a supply/demand inequality this time last year for all cars ( incEV’s) due to covid/Ukraine, which meant people were overpaying for the car. The market is now only correcting itself. (I got a ridiculously good price for my Audi Q4 when selling it in March 23, i know someone who tried to sell their Q4 in September 23 and were offfered @15k less for the same car)

while EV’s have always been sold at a higher price than ICE versions, this is likely coming to an end, but not in a good way.

If you paid for a new EV in 2021/2022, you will probably take a higher depreciation, as all makes are bringing down EV costs to a more sustainable price for them.

a game changer would be if a 1,000km battery makes an entrance in 2024

PaoloGotti

https://www.boards.ie/discussion/comment/121546599#Comment_121546599

Not to nit pick as I think you’re reasoning is solid - the trade in can’t be taken out of the sums unless you were gifted it.

PaoloGotti

https://www.boards.ie/discussion/comment/121546598#Comment_121546598

Ever heard of a rule of thumb?

mun1

https://www.boards.ie/discussion/comment/121546632#Comment_121546632

Take your point, The only thing that ever matters to me is the Cost of Change. Don’t care what the new cars costs, what they are giving me as trade in etc. sometimes i pay a lot, sometimes a little.

i change about every 3 years , to mostly new car, and sometimes i have to pay more than i might have wanted. At this stage in my life i am privileged to be able to afford what i want, when i want it. What I paid 3 years previous is irrelevant to me.

Don't get me wrong, i alway try to get good value, but i like fast cars . (At the moment, My fingers are twitching if anyone mentions a Porsche Taycan :) )

PaoloGotti

https://www.boards.ie/discussion/comment/121546671#Comment_121546671

Fair play. I wouldn’t be able to do it. My brain would look at the depreciation (the actual cost of changing) and see €24-30k every three years as a hard sell. But I’m a mean cnut.

maidhc

https://www.boards.ie/discussion/comment/121545915#Comment_121545915

Correct, although the end cost ended being slightly more as I went for the gr sport spec.

gammon199

https://www.boards.ie/discussion/comment/121546598#Comment_121546598

Why is it ridiculous?

Its for normal people, not silver spoon privileged people, car enthusiasts or keeping up with joneses who buy things they don’t need to impress people they don’t like. If you can afford it and it gives you pleasure to flaunt your things over others, well have at it and good luck.

Having things doesn’t make you happy; happiness comes from within.

Cars are A to B for most normal people

sk8board

I think the original conclusions of this thread was that

1. there’s now no supply issue with new EV deliveries
2. in the 2nd hand market there is less demand than expected
3. a lot of 3yr PCPs are ending, so the 2nd hand supply of EVs will continue to increase.
4. EV owners either drop prices significantly, or hold on to their cars

In the current market, prices will drop until there’s equilibrium in supply and demand.

The price that will sell a car is the level the market sits, at any point - be it a high price or a low price.

gammon199

https://www.boards.ie/discussion/comment/121546599#Comment_121546599

Your an enthusiast and that's perfectly fine, I spend money on things I like as well. Its just a rule of thumb and in general I am frugal and risk adverse.

PaoloGotti

https://www.boards.ie/discussion/comment/121546752#Comment_121546752

Your advice would help >95% of car buyers and is labelled as “ridiculous”.

FaaF

There's a difference between suggesting that something is a rule of thumb and saying things like 'Seeing people in cars worth a years salary is embarrassing'.

For the most part, rules of thumbs tend to go out the window based upon what forum a discussion is happening. It's all about priorities for our hard-earned cash.

Go to an iPhone forum and how often you should upgrade your phone and how much you should spend goes out the window. Go to a parenting forum and any rules of thumb about how much you should put away for your children's education goes out the window. Likewise, there are many here who spend ridiculous amounts on cars that would never dream of spending the cash some on the travel forum spend for a one week holiday.

Sure, if you go to a general finance forum, you might discuss the theoretical person that should spend no more than 25% of takehome pay on mortgage/rent, should be contributing 50% of their age as a percentage of salary to their pension, etc. In practice, coming to a car forum and talking about general rules of thumbs on how much should be spent on cars is going to mostly fall on deaf ears.

FaaF

https://www.boards.ie/discussion/comment/121546769#Comment_121546769

The advice to not spend your money on whatever you want? Some people have zero interest in expensive cars just the same as some have zero interest in travelling abroad. If someones overall finances are in bad shape then it's good advice but telling someone to spend no more than 25% of their annual salary on a car without an overall picture of their finances is wrong.

gammon199

https://www.boards.ie/discussion/comment/121546788#Comment_121546788

The advice I gave is a general rule of thumb and no you cant spend your money on whatever you want when you need loans, its not your money, its the banks

For housing the central bank has set strict rules of 4 times income on mortgages.

Similar rules don't exist in the exact same way for car loans, but they should.

CivilEx

https://www.boards.ie/discussion/comment/121546671#Comment_121546671

I'm on the same wavelength as you on this one. Cost to change every three years has worked for me also. I never got involved in the PCP or leasing side of things, where it's surprising the value you can get if your car has no finance on it. The first question I am always asked by dealers is if there is finance outstanding on the car. Once past that point, the cost to change is the only number, as trade in values are smoke and mirrors when trading up, particularly if a dealer is trying to sell you finance too.

We are going through a huge correction in car prices generally since last October where I think anyone thinking of trading up should think about stepping away for a few months or otherwise they will risk converting a loss on paper into an actual financial loss with increased payments / finance costs.

Gumbo

https://www.boards.ie/discussion/comment/121546486#Comment_121546486

I seen you quoted me for some reason. You’ve moved on from drills now.

Woodie40

Life is short, if driving a nice car gives you pleasure, why shouldn’t you do that.

Some people spend their money on alcohol and gambling and some don’t.

I work hard and I like cars, they have always lost money, nothing new.

FaaF

https://www.boards.ie/discussion/comment/121547059#Comment_121547059

I have the cash available and am looking at the BYD Seal and Tesla Model 3.

In addition to the traditional depreciation seen with new cars for decades, a large portion of recent EV depreciation is due to price cuts from the manufacturers. We will likely see some more of that in 2024 - particularly from those that haven't cut yet (though I do believe there will be further from Tesla and some cuts from BYD as they ramp up their supply chain).

That being said, as margins contract, the scope for further cuts will diminish and we'll be back to plain old depreciation (just look at the margins Tesla had pre-pricecuts versus traditional manufacturers - they were not sustainable and were always going to entice new entrants to the market).

I may be wasting my time though as I don't earn the €250,000 one needs to earn before they can buy a new Tesla or BYD Seal - and, possibly, the €300,000 one might need to earn before they're permitted to buy the new Model 3 Performance, when released 😂

sk8board

Like everything, people’s reasons for buying cars vary wildly, as will affordability.

i love cars, but I’ve also never had car finance of any kind over decades, even though I can ‘afford’ it.

if You’ve been on these EV forums back in 2019/20, there were countless posts from people buying into EVs (M3’s, Niro’s, kona’s etc) out of old diesels and things and this was the most expensive car of their life, but they also felt it was going to be their lowest total cost of ownership, between fuel savings and depreciation.

2020 EV sales look like a lifetime ago:

Cyrus

https://www.boards.ie/discussion/comment/121546422#Comment_121546422

Where do you get Evs are flawed for most drivers ? Take a look at average annual mileage and average journey length and come back to me.

sk8board

https://www.boards.ie/discussion/comment/121547316#Comment_121547316

I agree with you, the only people I know who actually have an obvious justification for an EV are people who do high mileage - but they also know that their cars have collapsed in value, just like any other high mileage vehicle.

however I think equally there’s a gulf between government policy being environment-based, and EV buyers being cost of ownership based.

have you ever met someone who bought their EV purely for climate reasons?

The cost of ownership argument for an EV, by and large, has not been proven yet.

gammon199

https://www.boards.ie/discussion/comment/121547316#Comment_121547316

I took a look at average annual mileage and average journey length and it told me that a lot of potential owners don't own a house, don't have a driveway, don't have thousands of euros spare to purchase an EV and they don't want to bother there landlord to install a charge point or use expensive public charging or live with parents for the next 10 years and they would rather fill up in 2 mins at the thousands of petrol stations across the country and spend money on other things instead of expensive EV's

Is that ok that they are flawed for them and they have no interest in battery cars?

Gumbo

https://www.boards.ie/discussion/comment/121547531#Comment_121547531

Where did you get this info?

I think it’s perfectly fine to have no interest in battery cars, in the same way some people have no interest in petrol cars. But I wouldn’t in a petrol forum ranting and raving why petrol doesn’t suit me. Move on, enjoy your holiday and forget bout it. Buy the car that suits you.

John arse

https://www.boards.ie/discussion/comment/121547531#Comment_121547531

You're not getting an EV for yourself then I take it???

Cyrus

https://www.boards.ie/discussion/comment/121547531#Comment_121547531

Why would the stats on average annual mileage and journey length have the data points you are suggesting, I think you are making it up.

Casati

https://www.boards.ie/discussion/comment/121547316#Comment_121547316

18.59% of new cars sold this year were EV (i.e full electric). By definition that's over 81% of most drivers bought something else that suited them better. Don't get me wrong, 18.59% is a big chunk of the market, but its still way lower than the total number of diesels/ hybrid diesels sold - and as we have seen its not down to supply issues but rather that most drivers still see some flaw with EV's.

I'm very interested in buying an EV myself at some stage, but have ordered another diesel for 241 as despite looking at all the options in detail the purchase of an EV would still be a flawed purchase for my circumstances - and its not down to the average journey length or annual mileage

Casati

https://www.boards.ie/discussion/comment/121546738#Comment_121546738

Thanks for sharing - I doubt any 221 EV at any price point could be traded in for same car on a 241 for 8k.

I saw similar cost to change on a Tiguan after two years- but was ridiculed and dismissed by some posters

graememk

https://www.boards.ie/discussion/comment/121549721#Comment_121549721

Do many diesels come with ad-blue now? I know its been creeping into smaller and smaller engines (3 out of 4 of our tractors now use it)

Buzwaldo

There is a bit of a leap of faith in purchasing a first ev (you can always find reasons not to jump)

When we did it 2 years ago we did some but not exhaustive research. Not sorry however, much prefer the electric driving experience, and enjoy the much reduced servicing required - hard to see myself going back.

Like many we have had a fair bit of depreciation due to price drops etc but price to change is probably at ‘normal’ levels. (Second hand prices were ‘unbelievably good’ for a few years there on evs, and all second hand values were a bit inflated during/after Covid)