Electric car depreciation

[chic0821]

I am also on a Porsche forum, I know, wash my mouth out with salt Anyway this video is worth a watch. He is the most boring video maker ever, so save 20mins of your life & start the video at 20 minutes to see the depreciation. He has a Taycan & even Porsche don't want it back in part exchange, but he also mentions Audi e-tron. Guess most makes are similar

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[Bobby Dazzler]

I am also on a Porsche forum, I know, wash my mouth out with salt Anyway this video is worth a watch. He is the most boring video maker ever, so save 20mins of your life & start the video at 20 minutes to see the depreciation. He has a Taycan & even Porsche don't want it back in part exchange, but he also mentions Audi e-tron. Guess most makes are similar

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He’s an expert at milking the same few words. He makes TGETV look like an amateur.

 

[st13phil]

As Harry Metcalfe said a few weeks ago, the manufacturers are all required to meet minimum new EV sales proportions from this year onwards, so the last thing they want is to lose a potential new sale to a used example on their forecourt. Hence they’re not really interested in taking in a used EV.

As always, politicians intervening in markets have unwanted consequences.

 

[Bobby Dazzler]

As Harry Metcalfe said a few weeks ago, the manufacturers are all required to meet minimum new EV sales proportions from this year onwards, so the last thing they want is to lose a potential new sale to a used example on their forecourt. Hence they’re not really interested in taking in a used EV.

As always, politicians intervening in markets have unwanted consequences.

There’s some truth in that, but it’s not the whole story.

It’s not often said because it doesn’t fit the anti-EV zeitgeist, however Porsche are now having to deal with their first volume model which have been bought by fleets. They’re all coming back at the same time, and the typical Porsche buyer has no interest in a Taycan apart from a brand new one as a company car or to put through the books. Unfortunately this is happening when car values are in free fall - not just EVs - so a handful od secondhand EVs is too many. Porsche dealers have not been not buying in or at least low-balling part-exchanges for more than a year.

 

[MeQ]

I can’t see my EQE being worth anywhere near the balloon payment at the end of term so will end up handing it back and starting again with something newer.

That being said depending on battery condition (which I will know the history off) I will possibly try to buy it again if I find out they will be reselling it approved used.

 

[SpikyMikey]

He’s an expert at milking the same few words. He makes TGETV look like an amateur.

And without wishing to criticise (but I will ), whilst delivering that whole unnecessarily-long rant, he only checked his mirrors about 4 times and his instruments about twice. He never even saw the potholes!

 

[zipdip]

Well it is no secret that EV second hand prices have tanked,this has to be down to a number of things,number one is the general public are not wanting to buy a EV,the only drivers who are fine with a EV is one that does local mileage and can charge the car at home or work,number two is the car makers thought they could get away with hiking the EV's price certain that the hype of the advertising would get people flocking to buy,which has not happened,number 3 is there is no real market for second hand EV's this leaves the price in no mans land,dealers are not buying,number 4 is that companies who have been running EV's for practically nothing are now ending lease agreements and so there are lots of cars on the market.
The car dealers I know told me a couple of months ago that they had no EV for sale,and they still don't ,one who is a risk taker say's he has been tempted by the prices but he feels he could be buying before the bottom has come and so would be stuck with it or sell at a loss.
Today in the Mail in their money section is a article from a supposed petrol head who has bought a Mazda MX30 EV from a Vauxhall dealership it was traded in a one year old 900 miles on clock for 19 grand it seems that this car was in the 35 grand range new,the petrol head says he and his wife do not do alot of miles a year and the car is perfect for them,and so thats is the only outlet to joe public,as long as you do a small mileage these EV's are ok to buy and no car maker can exist on those sales especially as these sales are not new cars.

 

[st13phil]

There’s some truth in that, but it’s not the whole story.

It’s not often said because it doesn’t fit the anti-EV zeitgeist, however Porsche are now having to deal with their first volume model which have been bought by fleets. They’re all coming back at the same time, and the typical Porsche buyer has no interest in a Taycan apart from a brand new one as a company car or to put through the books. Unfortunately this is happening when car values are in free fall - not just EVs - so a handful od secondhand EVs is too many. Porsche dealers have not been not buying in or at least low-balling part-exchanges for more than a year.

Absolutely.

Porsche (and Audi with their e-tron range) concentrated on selling high-end high-performance EV’s into the lease market and are now reaping the seeds they sowed.

 

[W1ghty]

There was a story in the DT the other week about trade in values on the Taycan suddenly becoming £20,000-40,000 less than a few months ago , something to do with the newer model having a higher range .
On Autotrader you can see new Taycans for up near £150k and 2020/21 models at £50k

 

[Londonscottish]

I was trying to follow the logic of what he was saying about chopping in his Taycan for a 911 but got completely lost in finance-speak gobbledygook. Don't understand that world.

I THINK he was trying to say that;

1 He'd bought (or leased or hired) the Taycan for £120k new
2 He wanted to chop it in against a 911 he fancied through a Porsche dealer
3 That dealer wouldn't take the Taycan as p/x
4 Dealers that would take the Taycan were offering £20k less than he expected/needed
5 Motorway etc were offering even less

Have I got it right so far?

The upshot of the shit depreciation was that he was either stuck with it or had to sell it outside of Porsche. Unless he found £20k cash.

Is that about it?

 

[markjay]

I am also on a Porsche forum, I know, wash my mouth out with salt Anyway this video is worth a watch. He is the most boring video maker ever, so save 20mins of your life & start the video at 20 minutes to see the depreciation. He has a Taycan & even Porsche don't want it back in part exchange, but he also mentions Audi e-tron. Guess most makes are similar

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I didn't watch the video, but I am surprised that anyone would buy a £100,000+ car like this with their own cash - I would be willing to bet that all new Taycan's were supplied on a lease....

At any rate, he's probably right about the facts and figures, but I can't imagine that there are very many people out there who find themselves in his situation - i.e. buying a £100,000+ car (any car - EV or ICE) in cash then trying to trade it in shortly afterwards only to discover they've lost a small fortune.

Having said that... some YouTubers are reportedly making millions, and so it might actually be a good strategy to buy a car that deprecates like a free falling lift, then moaning about it online and get 674,000 views in just 10 days - buying the Taycan might just be the best investment he's ever made!

 

[markjay]

Found online:

"You can expect to make up to $6 per 1,000 views. This means that your estimated earnings would be $1,200 to $6,000 for every million views on the videos you post."

He's got almost 700,000 views in 10 days.... let's he how far he can get.

 

[Londonscottish]

I didn't watch the video, but I am surprised that anyone would buy a £100,000+ car like this with their own cash - I would be willing to bet that all new Taycan's were supplied on a lease....

At any rate, he's probably right about the facts and figures, but I can't imagine that there are very many people out there who find themselves in his situation - i.e. buying a £100,000+ car (any car - EV or ICE) in cash then trying to trade it in shortly afterwards only to discover they've lost a small fortune.

I couldn't figure out if he'd actually bought it in the traditional sense or was trying to roll over some sort of financing arrangement.

Like I said when he said he'd "make it clear" I was none the wiser.

What IS clear is that when the govt creates loads of tax breaks for buyers of new cars that don't apply on the s/h market then the value of those cars is going to fall off a cliff.

As I've said in the past, my wife would like an electric Fiat 500. But the list price new is so mental (twice the price of the equivalent petrol) that, even now, the s/h prices still have some way to go before I bother to look seriously.

If and when they get down to $10k-ish for a 5 year old example with a spec as high as the one she's got then fair enough.

 

[W1ghty]

I was trying to follow the logic of what he was saying about chopping in his Taycan for a 911 but got completely lost in finance-speak gobbledygook. Don't understand that world.

I THINK he was trying to say that;

1 He'd bought (or leased or hired) the Taycan for £120k new
2 He wanted to chop it in against a 911 he fancied through a Porsche dealer
3 That dealer wouldn't take the Taycan as p/x
4 Dealers that would take the Taycan were offering £20k less than he expected/needed
5 Motorway etc were offering even less

Have I got it right so far?

The upshot of the shit depreciation was that he was either stuck with it or had to sell it outside of Porsche. Unless he found £20k cash.

Is that about it?

Yes , exactly (I think )

 

[st13phil]

What IS clear is that when the govt creates loads of tax breaks for buyers of new cars that don't apply on the s/h market then the value of those cars is going to fall off a cliff.

Bingo!

 

[BTB 500]

As I've said in the past, my wife would like an electric Fiat 500. But the list price new is so mental (twice the price of the equivalent petrol) that, even now, the s/h prices still have some way to go before I bother to look seriously.

There was a news story recently that they had reduced production of the 500e due to poor sales. And only a couple of days ago it was reported that they were looking at re-engineering the 500e to take an ICE. Both are mentioned here:

Electric Fiat 500 could be given petrol engine | Autocar

Current petrol 500 could be replaced by a converted 500 EV as new EU cybersecurity rules come into force

www.autocar.co.uk

 

[markjay]

I couldn't figure out if he'd actually bought it in the traditional sense or was trying to roll over some sort of financing arrangement.

Like I said when he said he'd "make it clear" I was none the wiser.

What IS clear is that when the govt creates loads of tax breaks for buyers of new cars that don't apply on the s/h market then the value of those cars is going to fall off a cliff.

As I've said in the past, my wife would like an electric Fiat 500. But the list price new is so mental (twice the price of the equivalent petrol) that, even now, the s/h prices still have some way to go before I bother to look seriously.

If and when they get down to $10k-ish for a 5 year old example with a spec as high as the one she's got then fair enough.

The tax breaks only apply to new cars sold on a business lease.

And for the people who drive these cars, depreciation isn't relevant, because the monthly lease cost is fixed, so they don't care what happens to the car at the end of the lease period when it goes back to the finance provider.

The issue is that these cars end up flooding the market at the end of lease period, so anyone who happened to be foolish enough to buy one privately (with cash or finance), will find it very difficult to sell on.

I am pretty sure that people who bought a Ford Focus Diesel privately ten years ago had a similar experience when trying to px it after 3 years, however the sums involved then were much lower (and YouTube was still in its infancy).

 

[Petrol Pete]

I was trying to follow the logic of what he was saying about chopping in his Taycan for a 911 but got completely lost in finance-speak gobbledygook. Don't understand that world.

I THINK he was trying to say that;

1 He'd bought (or leased or hired) the Taycan for £120k new
2 He wanted to chop it in against a 911 he fancied through a Porsche dealer
3 That dealer wouldn't take the Taycan as p/x
4 Dealers that would take the Taycan were offering £20k less than he expected/needed
5 Motorway etc were offering even less

Have I got it right so far?

The upshot of the shit depreciation was that he was either stuck with it or had to sell it outside of Porsche. Unless he found £20k cash.

Is that about it?

As I understand it is that he bought it with is own money so as to make his content 'real' ,as watching vlogs of some bloke who has nothing to say about his car because it's not his and it will be 'going back' after 3 years would be even more boring....

I might be wrong , but if someone on here would like to watch all of his videos for the answer, be my guest

 

[Bobby Dazzler]

I watched it. He did buy it with Porsche finance. The fact that he’s talking about negative equity suggests that it’s HP or PCP rather than a lease.

Ending a lease eary means paying the remaining schedule of payments over the full term, and has nothing at all to do with the value of the car at that point in time.

It’s common for car finance deals to result in negative equity when terminating early. In percentage terms you could find yourself in the same situation in a supermini..

In a normal market the rate of depreciation reduces over time but the repayments remain the same, and so as a result payments catch-up towards the end.

This is not dissimilar to mortgage repayments reducing the capital at a faster rate towards the end as interest makes up a smaller proportion of the monthly repayment.

Like many manufacturer finance deals designed to shift metal, the residual value is likely to be high, as doing so reduces monthly payments bagging more sales.

If he bought a £120k luxury car on a finance deal, and didn’t expect to be in negative equity in the event that he chose to terminate early, then he is very naive or daft.

 

[markjay]

...If he bought a £120k luxury car on a finance deal, and didn’t expect to be in negative equity in the event that he chose to terminate early, then he is very naive or daft.

Or very smart. Like this chap, for example:

MrBeast shows what a one million dollar a night hotel looks like

MrBeast, aka Jimmy Donaldson, took his crew to a $1 million-a-night hotel in Huntington, New York, for his latest video

www.ladbible.com