If you tried to sell your older iOS or Android phone, you certainly know that you cannot expect a big amount of money. Since technology is advancing at an exceptional speed in the last two decades, this is something that we need to be prepared to. The same goes for cars. Their value stars decline as soon as they are not considered to be at a top-notch level or when they are not among the newest products of the company.
Naturally, some of the vehicles manage to preserve their price for a quite long time. Ultimately, they will need to face the harsh truth and the damage to the price as time passes. Literally, there is no example of a vehicle that preserved its original price after some time.
When you talk to the experts from the automobile industry, you will learn that gadgets that are included in the vehicle have a massive influence on the depreciation of the price. Buyers need to be aware of that. When you are opting for a new vehicle, you need to have in mind that some of the gadgets could hurt their price really bad pretty soon.
This even goes for high-tech vehicles that you’ve recently obtained. Shoppers rarely take this into consideration the potential resale value of the vehicle they intend to buy. Sadly, sometimes you need to say goodbye to your beloved vehicle. This is when you are probably to resale it, either to a new buyer or to a junk car buying company. If you are in the state of Washington, you can check it here.
Now, let us take a look at what we know about the speeding depreciation of high-tech cars in 2024.
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New Car Depreciation
Naturally, new car prices are ones that depreciate the fastest. Many of them are losing 10% of their original value as soon as you drive them from a lot of a car sales company. At the end of the first year, it could lose up to 20% of the price. Every year after the first one, you can expect that it can lose 15%-25% of the original price per year. In the fifth year after you purchased it, the price could be 60% lower. If you are planning to resale your vehicle, you are going to be faced with a serious loss of value.
Used Car Depreciation
Since the first year is the most drastic when it comes to deprecation, you can save up to 20%-30% when buying a one-year-old vehicle. After the first year, used cars can lose up to 17%. Maybe the perfect choice for you is to buy a vehicle which is two years old. After you have decided to resale that vehicle, you can be sure that it could preserve some of its value.
Can You Calculate it?
Calculating a depreciation rate of a car is hard and it depends on the model. However, there is a formula that can roughly show you at what numbers you are looking at. You can multiply the value of the vehicle with 0.75 in the first year. Every year after that, you can multiply it with 0.825. Do it for the next five years and you will have at least some kind of idea what is the potential decrease of value for your vehicle. This especially goes for new cars.
How Fast Can It Happen?
When it comes to finding an answer to how fast it could happen to your vehicle, it’s hard to say. However, you need to be prepared that your $8,000 vehicle that has the newest infotainment system and top-notch safety gadgets can be worth less than $1,000 in the next five years. As we said, the reason is that technology advances so quickly that manufacturers can even follow as they would like. Imagine that. Well, then you can have an idea of how it is hard for a potential buyer to calculate the future, or resale, price of the vehicle he or she just bought. It’s like with every product, it has a lifespan, and after that, it’s not as good anymore.
Can it be Prevented?
Sadly, this is something that can’t be prevented. The manufacturers started adding many tech connectivity to prevent the future decline of the price. However, we can say that we don’t have our hopes up. We have an example of the Tesla company. They are producing high-quality cars that have truly exceptional gadgets like Wi-Fi connectivity. At the same time, their cars have software capabilities.
This means that they can be updated frequently and by doing that, maybe the company will succeed in preserving their original prices. Since their vehicles are pretty young, its hard to say if they will succeed in doing it. If you take a look at some expert’s opinions like the ones at webuytotaledcars.com, you will see that they all agree that this is uncertain. As we said, you can draw a parallel with so many other products and you will have the same result.
What About E-Cars?
According to research done by people at iSeeCars, we can see that e-cars have the same fate as regular cars. In this study, we can see that cars purchased five years ago can preserve only 50% of their original price. When it comes to e-cars, their worth drops by 60%. Some models have their worth dropped by 70%, which is a disaster if you are looking to resale it at some point. For example, you can have a look at the case of the Nissan Leaf, which is an all-electric vehicle. This model suffered a 71.7% decline in worth in only five years. Some of the heaviest losers were Chevy Volt and Ford Fusion Energi.
Naturally, cars that are breaking often cannot expect to reach a certain level of resale value. When it comes to e-cars, their low operating costs could even boost their resale value after some time. However, several elements prevent that from happening. When someone buys an e-car they are coming with government incentives on the front end. As you probably know, these are not coming when you are buying regular cars. This is the reason e-cars don’t hold their value for too long. The conclusion is that they are not as popular in the resale market for this reason.