Better residual value: Hybrid cars versus plug-in cars
c hybrid offers best residual value compared to all hybrids and plug-ins
How does plug-in depreciation compare to hybrids?
Obviously, no one wants to buy a new car and then drive off the lot and suddenly realize its worth drastically less than what was paid. Unfortunately, all new cars lose value as soon as the dealer hands you the keys, which is why savvy financial folks, such as Warren Buffett, only buy slightly used cars.
And residual value after 5 years is an even scarier number.
So do hybrid or electric cars hold their value better?
ALG’s Eric Lyman recently told Cars.com that, overall, hybrid cars hold their value better than plug-ins. Take away tax credits, and the numbers aren’t even close.
Overall, the Toyota Prius c takes top honers, with 44 percent residual value after 5 years. The regular Prius came in second at 42 percent.
The Chevy Volt — after the tax credit — is the top plug-in at 36 percent. Take away the tax credit; however, and the Volt drops to 32 percent. The Nissan Leaf came in at 31 percent, but only 23-24 percent without the tax credit.
Ultimately, it comes down to the battery. As the battery in plug-ins degrades over time, so do the values of plug-ins, especially in pure plug-ins. Fortunately, much work is now being done to find new ways of extending the life of plug-in batteries, such as in back up power systems. As these secondary uses of plug-in batteries become successful, the residual value of plug-ins could increase.
Larry,
That is consistent with what I was getting.
Mid to high 30′s is higher than the cost of a Volt after the tax credit, and pretty close to the original cost….
As far as the impact of expected battery life on the 5 year residual value, that is basically a guestimate at this early stage in EV deployment.
ICE’s have a 100 year history from which to make a better estimate of the residual value at 5 years. EV’s are still writing that history…
well one can search auto trader and look for used Volts and get some idea. What effect did the tax credit have on the residual value? I would think the “value” of the car is different than a car without a tax credit so are we calculating the residual value with regard to the original list price or the original list price minus the credit?
I would also think the expected life of the battery affects the value. Is the battery life measured in miles or hours?
I note that a lot of vehicular equipment that is not used as passenger vehicles on highways is measured in hours.
but anyhow you can find used Volts and the one year old models seem to be selling in the mid to high 30′s.
I’m curious how the source came up with these estimates considering plugins haven’t been around for 5 years yet to determine what their value will be at the 5 year point.
So far they only real world data on plug in residual value is for the Volt and Leaf after one year. I don’t have the Leaf numbers, but the Volt is holding 95% of its original value after one year. This is the highest residual value of any vehicle on the market and it bucks the trend of vehicles losing significant value after driving off the lot.
Will that same pattern of significantly exceeding other vehicle residual values continue to occur at the 5 year point? Who knows? Certainly not these folks that did this study…