Do Electric Cars Depreciate as Fast as Petrol/Diesel Prestige Models?

It’s generally accepted that the prestige cars – BMW, Mercedes-Benz and Audi, for example – build models that stand the test of time and hold their value, although you may take a big hit on depreciation in the first three years of ownership. That is one reason why so many people have switched from buying, to renting, a prestige car over the last decade.

But what about pure electric cars? How quickly do they lose their value?

Vanarama’s latest round of research looks at a range of EVs in production right now and asks the question that anyone with 70K to spend is asking; what will that luxury EV be worth in a few years time? Vanarama has picked ten all-electric models that you can buy right now, from Volkswagen’s dinky e-Up! to the award-winning Jaguar I-PACE.

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Using a leading online car valuation tool, they chose a sample March 2020 reg vehicle and varied the mileage to gauge its impact on value.

It isn’t a surprise to see Audi, Jaguar and Tesla in the top spots, but the positions below are more interesting. VW’s all-electric e-Up! is expected to drop less than £4k in its first 5,000 miles on the road – a percentage change of only 16%. In stark contrast, BMW’s i3 dropped nearly £10k over the same distance.

Another wild card is the Hyundai Ioniq Electric, which also finds itself at the more wallet-friendly end of the table, with a drop of only 17% after 5,000 miles. That’s good enough to have it brushing shoulders with Tesla’s Model S, a model that’s more than twice as costly.

Add another 95,000 miles to the clock and the gap between the best and worst performers narrows. The Jaguar I-PACE’s strong start is undone here, shedding almost half of its £70k-plus price tag and putting it on par with the Nissan LEAF. With over £40k between the two, as of leaving the factory, it’s perhaps the best indicator of changing trends.

At the other end, the e-Up! is again – and quite literally – punching above its weight. Only the e-tron and two Tesla models pip it to the podium, with a drop of 39% on its base value. At little over £23k, it’s the cheapest on our list and undercuts the top three by over £48k. Behind the e-tron, the Model X and Model S are the best performing, on losses of only 28% and 35% after 100,000 miles.

tesla-direct-line-driverless thatcham ratings NCAP

Although far from underdog status these days, Tesla’s been credited for its rise from obscurity over the last decade or so; the American EV builder was arguably the first to capitalise on the battery-shaped gap in the automotive industry.

But, considering you’ll part with almost £90k for the X and S, it’s the Model 3 that will likely produce the most sales. Starting at £42,500 for the Standard Range Plus variant, it’s still pricey, but affordable enough to sit in the middle of our price scale.

And the valuator tool we’ve used reckons it’d lose around 34% between 5,000 and 100,000 miles – certainly far from the worst we’ve looked at above. It just missed out on making our table because of recent price changes, but this is one to keep an eye on.

CitigoeIV electric car how much is UK list price

Do Electric Cars Depreciate Faster Than Petrol and Diesel?

In short, no, says Vanarama, although nobody really knows how the used car market will look next year once we factor in about a million lost jobs, more green taxation and less commuting curtailing demand overall for any new car purchase – especially on fianance.

After 100,000 miles, however, it’s the F-PACE that fares best against its battery-powered sibling, losing 44% of its base price – five percent shy of the I-PACE. You’ll also pay around £30k less for the privilege; another win.

Despite being the cheapest model we’ve looked at, the VW Up! seems to come off worst. But, for a model that starts at £13k, the losses aren’t as hefty, pound for pound.

Should I Consider Electric Cars Based on Their Lower Depreciation?

Generally, then, the combustion-engined models depreciate quicker than their alternatives but it’s worth considering the ever-improving nature of EV tech. The original Nissan LEAF launched not even ten years ago, but has already near-on doubled its range; what’s to say there won’t be a similar jump in the next decade?

That’s a double-edged sword, though, as continued advances may harm the values of the models above. Ultimately, the best way of looking at it might be affordability, both long and short term. If you want to cut down on the cost of a brand-new motor, a petrol, diesel or even a hybrid could come in quite a bit cheaper than something solely battery powered.

Obviously if you want to cut on annual running costs; fuel bills, non-existent road tax and – in theory – less servicing cost – then an all-electric EV will appeal. Right now, Tesla looks like a long term winner, but fashions change within the EV market, so next year could see a new Audi or BMW that becomes the `must have’ hipster car on the block. You can see the full Vanarama research here by the way. 

 

About alastair walker 10562 Articles
20 years experience as a journalist and magazine editor. I'm your contact for press releases, events, news and commercial opportunities at Insurance-Edge.Net

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