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.
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.
I said I’d drive my first car until the wheels fell off.
Well, one day it actually did, coming around a bend on a highway. Fortunately there weren’t many other people driving out at the time. I ended up flipping it over on the embankment, single-car collision.
I stayed true to my word. Never fucking said it about another car since.
All cars get driven to the ground. You save money by being the only owner, and not changing car every 3 years. In that case, depreciation is irrelevant. Your insurance case is far from being average.
Then assume straight line depreciation between the car brand new and the car when it is scrap. If a $60,000 car lasts 20 years and you own it the whole time, you can consider the depreciation to be $3000/year if you’d like.
Either way, at the end of the car’s useful life you need to be prepared to pony up more money to buy the next one.
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.
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.
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.
Here, it’s like 200€ to 30€ a month if you can charge home. That buys a lot of depreciation.
The insurance is a lot higher though, so that eats a lot of the benefits.
Not if you aren’t diving a Tesla. My 2023 Nissan is only 20% more than my 2017 Kia.
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.
I said I’d drive my first car until the wheels fell off.
Well, one day it actually did, coming around a bend on a highway. Fortunately there weren’t many other people driving out at the time. I ended up flipping it over on the embankment, single-car collision.
I stayed true to my word. Never fucking said it about another car since.
All cars get driven to the ground. You save money by being the only owner, and not changing car every 3 years. In that case, depreciation is irrelevant. Your insurance case is far from being average.
If you’re going to reply, at least address what I wrote. You completely ignored everything I wrote.
I just had a muffin for breakfast. Quite delicious!
Then assume straight line depreciation between the car brand new and the car when it is scrap. If a $60,000 car lasts 20 years and you own it the whole time, you can consider the depreciation to be $3000/year if you’d like.
Either way, at the end of the car’s useful life you need to be prepared to pony up more money to buy the next one.
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.
It matters if you are in a collision for the payout.
That’s what I do too. I just thought I’d pull out depreciation before a genius does.
That’s how you lose a fortune to the sunk cost fallacy
But it’s the much more environmentally friendly way of owning literally anything.
Sorry, what? Can you elaborate on how hanging on to a paid off car and just performing maintenance is a sunk cost fallacy?