How EVs, ICE Compare In Value Retention
The analysis by comparison website Compare the Market spotlighted vehicle depreciation trends in Canada, the U.S. and Australia to find the differences in how various car brands and models retain their value after purchase.
While all vehicles depreciate in value, some maintain their value far better than others.
The booming used car market, valued at USD$1.66 trillion in 2022, is predicted to grow by 6.1 per cent annually. This surge highlights the importance of understanding vehicle resale values for those looking to trade in or sell their cars.
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In the United States, the Tesla Model Y is noted for its sharp depreciation, losing an average of 42.70 per cent in value, underscoring a broader trend where electric vehicles (EVs), including the Volkswagen ID.4 and Kia EV6, exhibit lower resale values compared to their petrol counterparts. Conversely, Australia sees better overall value retention, with the MG ZS experiencing the most significant drop at 15 per cent, while models like the Toyota Landcruiser and Mazda CX-5 fare much better.
Canada boasts even stronger resale values, with the Ford Escape leading the depreciation pack, yet only dropping to 88.09 per cent of its original value. Interestingly, the Toyota RAV4 and Hyundai Tucson in Canada see an increase in value over time, contrary to typical depreciation trends.
The report also highlights vehicles with the best resale values, with the Toyota Tacoma and Ford F150 leading in America. The Toyota Corolla stands out in Australia and Canada for retaining or even increasing in value, making a case for the investment potential of hybrid vehicles over pure electric ones.
This disparity in resale values, especially among EVs, raises questions about the long-term viability and consumer perception of electric transportation, the report said. Despite the growing market for electric vehicles, the data suggests hybrids may currently be a safer bet for maintaining value.
Adrian Taylor from Compare the Market advises car owners to ensure proper insurance coverage, considering the varying costs based on vehicle type and age, underlining the necessity of informed policy selection to safeguard against depreciation and other risks.
