Electric Car Depreciation Rate, Which Cars Devalue Quickest?
Electric car depreciation is widely thought to be slower than traditional petrol and diesel cars. However, there are question marks over the longevity of electric cars once they enter the second-hand market.
The UK government is aiming for battery-powered electric cars to dominate the roads in the near future. From 2030 onwards, automotive companies are not permitted to manufacture anything other than electric vehicles.
So where does that leave drivers in terms of the sell-on price of your electric car? And what are the best electric car models to invest in?
In the article, we reveal which cars devalue the quickest and discuss what the average car depreciation is per year. This is important to know to ensure you don’t lose out financially by paying for your car in monthly payments.
What is the Average Car Depreciation Per Year?
The average car depreciation per year can vary depending on several factors, including the specific make and model of the electric vehicle, market demand, technological advancements, battery life, and government incentives.
It is estimated the average car depreciation per year for electric cars is around 15-20%+. We Buy Any Car reveals that electric cars depreciate by 15-35% in the first year but the rate falls to between 40-49% after three years
But that’s still better than the average car depreciation for traditional petrol and diesel cars. According to the AA, a new car can lose 40% of its value after the first year and 60% after 3 years. At best, new cars decline in value by 10% per year.
What is the Average Car Depreciation After 3 Years?
It is estimated that electric cars depreciate at a rate of around 15-20% per year during the first three years of ownership. This is based on data and studies conducted on electric vehicle depreciation patterns.
How is the Average Car Depreciation Calculated?
Cars depreciate in relation to market demand. Specific electric car models can influence their depreciation rates. Factors such as the availability of charging infrastructure, brand reputation, and competition from other electric vehicle manufacturers can impact the depreciation rates of certain models.
The electric cars that lose value the quickest are the vehicles that don’t have the most advanced technologies. And given the technology for electric cars is advancing at a rapid rate, the average car depreciation per year could drop quicker than is currently projected.
Check out whatcar.com's list of the 10 electric cars which lose value the quickest.
If you are intending to buy a new electric car, take into consideration the factors that depreciate the value.
Government incentives, such as tax credits and rebates, can affect the depreciation rate of electric cars. When these incentives phase out or change, it may impact the resale value of electric vehicles that were previously eligible for such benefits.
The battery is a crucial component of an electric car, and advancements in battery technology can influence depreciation rates. As battery technology improves, older electric cars with less efficient or outdated battery systems may experience faster depreciation.
Having said that, you should expect electric car batteries to survive for 10-20 years. Battery longevity should, therefore, support the second-hand electric car market, but buyers should be aware there is a higher likelihood of experiencing more maintenance issues when buying a second-hand electric vehicle.
Electric cars with shorter ranges may depreciate more quickly compared to those with longer ranges. Increasing consumer demand for longer-range electric vehicles can impact the resale value of models with limited range.
Excess Insurance for Electric Vehicles
Excess insurance can help you to avoid financial loss in the event that your electric car is written off in an accident or stolen. Given the rapid car depreciation rates, could protect the return on your investment.
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