Do Electric Cars Hold Their Value?
What is electric car depreciation?
Electric car depreciation refers to the decline of an electric car’s value over time. Different cars depreciate at different rates, with a range of factors influencing the car’s resale value. It’s unlikely that a car will ever increase in value, but some models do hold their value better than others. This also applies to electric car depreciation. The electric car depreciation rate is particularly relevant when purchasing a new car with personal contract purchase (PCP) finance. The car’s predicted worth influences the monthly payments, so if an electric vehicle (EV) were to drop in value, the payments would be higher.
What factors contribute to the depreciation of electric cars?
Multiple aspects can sway the depreciation of electric cars. They experience the same depreciation factors as petrol or diesel vehicles, but with some added influences because of their design. Examples include:
- Mileage
- Age
- Vehicle condition (interior and exterior)
- Service history
- Battery condition
- EV type (full, hybrid, etc.)
Feel free to check out our guide on how to maintain your EV to help reduce depreciation.
How fast do electric cars depreciate?
The AA claims that a new car will lose roughly 60% of its value after its first three years at an annual mileage of 10,000 miles. Although this figure also applies to electric cars, some factors have specifically affected EV depreciation. Initially, the lack of demand for electric vehicles and the scarcity of charging stations contributed to their depreciation. Now, with over 20,000 EV charging points in the UK, the overall performance of EV depreciation has improved. Due to the increasing number of clean air zones, EVs are more sought after, improving their resale value.
Do electric cars depreciate faster than petrol cars?
Data suggests that EVs depreciate faster than petrol and diesel models on average. However, the rate depends on a range of influences, including brand, model, desirability, mileage, and condition. With the UK Government pledging a by 2035, there will be an increasing demand for electric cars, which may help improve the depreciation rate of these cars.
Does brand matter when it comes to an electric car’s depreciation rate?
Car depreciation rate by model is a common question. In general, the more desirable a brand is, the more likely it is to retain its value over the years. However, the brand is not the be-all and end-all. Other considerations highlighted previously, like mileage, condition, and age, also play a big part.
Which electric car holds its value best?
The most sought-after models tend to hold their value best. As one of the world’s most in-demand brands, Tesla tends to buck the depreciation trend. Examples include the Model 3 and Model Y. Performance EVs like the Porsche Taycan also perform well. The cars offer impressive acceleration, speed and handling, while also presenting the benefits of an electric vehicle.
How can EV leasing protect you from electric car depreciation?
Leasing an electric car helps you avoid the impact of depreciation, as you aren’t paying towards ownership. Monthly payments are fixed for your lease term, so you can budget easily and accurately. Synergy offers a range of EV lease deals with best-in-class customer service to support you throughout your leasing journey, proven by our Feefo 10 Years of Excellence Award. To find out more, contact us today.
