What a weird and useless metric to think of when buying a new car. They will pay you just less then the cost of a replacement, so why does buying a car with a higher book value mean anything? Like are you just picturing yourself in an crash when looking at cars?
Unfortunately, you can’t ignore depreciation. It’s rarely possible to actually drive a car into the dirt, as they can last for hundreds of thousands of miles if properly maintained.
Even if you intend to drive the car into the ground, you usually can’t. Every time you get on the road it’s a roll of the dice. Over enough time, eventually you roll snake eyes. You can be the best driver in the world, you can’t beat physics. If someone pulls out of a parking lot right in front of you, you’re going to crash. You can’t skill your way out of minimum stopping distance.
And this happens, depreciation matters regardless of your choices. The insurance company is going to offer you a settlement based on the depreciated value of the vehicle. Sure, in theory you could say, “well, they gave me the value of a 10 year old car, so I’m just going to buy another copy of the same car I just totaled!” But that rarely works in practice. Once they get that old, you really have to worry if the old owner took care of it properly or not. Driving a car into the dirt works well when you can be the original owner and know that the maintenance has been kept up with.
In the context of OP, depreciation means that a “$50K when new” car may only be worth ~$35K if you choose to buy it 1-2 years later.
So it’s not so much about it’s residual value at any point in time, but rather how EVs tend to have a steeper depreciation curve at the beginning - making lightly used models a more attractive bargain.
I drove a 20+ year old car up until I had a kid, and suddenly I started to care about those safety features from the previous 20 years (like airbags and crumple zone improvements).
True that. Just got hit with a 2k maintenance bill for my 20 yo vehicle and looking to pivot to an EV. It helps that I don’t drive much and work from home but I’m certain that my wife would prefer to drive the EV to and from work rather than her hybrid.
Maybe I’m weird, but I never consider depreciation. If the car is worth anything more than scrap value, it’s not yet time for a new car.
It matters if you are in a collision for the payout.
What a weird and useless metric to think of when buying a new car. They will pay you just less then the cost of a replacement, so why does buying a car with a higher book value mean anything? Like are you just picturing yourself in an crash when looking at cars?
Unfortunately, you can’t ignore depreciation. It’s rarely possible to actually drive a car into the dirt, as they can last for hundreds of thousands of miles if properly maintained.
Even if you intend to drive the car into the ground, you usually can’t. Every time you get on the road it’s a roll of the dice. Over enough time, eventually you roll snake eyes. You can be the best driver in the world, you can’t beat physics. If someone pulls out of a parking lot right in front of you, you’re going to crash. You can’t skill your way out of minimum stopping distance.
And this happens, depreciation matters regardless of your choices. The insurance company is going to offer you a settlement based on the depreciated value of the vehicle. Sure, in theory you could say, “well, they gave me the value of a 10 year old car, so I’m just going to buy another copy of the same car I just totaled!” But that rarely works in practice. Once they get that old, you really have to worry if the old owner took care of it properly or not. Driving a car into the dirt works well when you can be the original owner and know that the maintenance has been kept up with.
Tell that to my 40 year old daily driver. Just fix your stuff…
In the context of OP, depreciation means that a “$50K when new” car may only be worth ~$35K if you choose to buy it 1-2 years later.
So it’s not so much about it’s residual value at any point in time, but rather how EVs tend to have a steeper depreciation curve at the beginning - making lightly used models a more attractive bargain.
I drove a 20+ year old car up until I had a kid, and suddenly I started to care about those safety features from the previous 20 years (like airbags and crumple zone improvements).
Can cost you more to maintain it though.
EV cost more to maintain then gas?
I mean not replacing a 20 year old car can cost you more than a monthly payment of a newer car. My ev has been going strong.
True that. Just got hit with a 2k maintenance bill for my 20 yo vehicle and looking to pivot to an EV. It helps that I don’t drive much and work from home but I’m certain that my wife would prefer to drive the EV to and from work rather than her hybrid.
Yeah, my friends are complaining about $50 a week for gas and I’m around $40 a month for electricity.