Electric car myth: Depreciation makes electric cars unattractive

Apart from buying a home, a car is the biggest investment you can make. That's why it's important to know how depreciation works. Every car loses value from the moment you drive it off the forecourt.

In fact, the depreciation of electric cars is slightly higher than that of combustion engine cars at the beginning. However, this makes used electric cars extremely attractive offers. And if you lease your electric car, you don't have to worry about depreciation – after all, you can simply return the car at the end of the lease term and you won't be left with the depreciation.

In this chapter of our series debunking myths about electric cars, we show you how to turn the depreciation of electric cars to your advantage.

• Myth 3: Electric cars are a bad investment because they depreciate more quickly
• Depreciation is not an electric car phenomenon, but a new car problem
• Why do electric cars lose value more quickly at first?
• A used electric car offers nothing but advantages
• Should you lease, finance or buy your used electric car outright?
• Summary: The depreciation of a new electric car is to your advantage when buying a used electric car

Myth 3: Electric cars are a bad investment because they depreciate more quickly

In short:

• Cars always lose value. New cars experience the greatest depreciation. It doesn't matter whether it's a petrol, diesel or electric car.
• Electric cars lose around 48.5% of their value in the first three years, which is approximately 12 percentage points more than petrol cars.
• This makes them more attractive as second-hand vehicles: used electric cars are significantly cheaper to buy and often have low mileage.
• As second-hand vehicles, electric cars offer excellent value for money, especially because maintenance costs are lower.

Discover used electric cars from Gowago

Depreciation is not an electric car phenomenon, but a new car problem

The fear that electric cars allegedly ‘immediately lose a lot of value’ is only half the truth. The fact is: every new car loses value rapidly as soon as it leaves the showroom. This applies to the VW Golf as well as the Tesla Model Y.

However, the residual values do differ:

• Petrol: approx. 64% of the new price
• Diesel: approx. 63%
• Electric cars: 51.5%

Why do electric cars lose value more quickly at first?

When you hear that the value of an electric car depreciates faster than that of a petrol car, you might think that this has something to do with quality or reliability.

This is yet another pub debate, but it is fundamentally incorrect. As you can read in our chapter on the longevity of electric cars, electric cars are also low-maintenance and inexpensive to run as used cars.

The loss in value has completely different reasons:

• Purchase premiums and discounts: Many electric cars were sold with subsidies or discounts, which can depress the resale value.
• Short model cycles: New generations of electric cars with greater range are coming out faster. However, thanks to over-the-air updates, many used electric cars are always up to date in terms of software. (Link)
• Uncertainty about batteries: We have already looked at this above. But not everyone is smart enough to read the Gowago blog to find out the truth about electric car batteries. Many buyers are still concerned about the battery and are therefore reluctant to purchase a used electric car.

A used electric car offers nothing but advantages

This loss in value is your biggest advantage when purchasing or leasing a used car.

Even as a used car, you get a modern, technically cutting-edge electric car for significantly less money. That's because manufacturers usually go all out with electric cars:

• state-of-the-art driver assistance systems

• clever interior design,

• innovative infotainment systems

• comfortable, quiet driving experience

Many used electric cars are still almost as good as new after three years and have less than 50,000 km on the clock. And because there are fewer moving parts (no gearbox, no timing belts, no cylinders, etc.) in an electric car, you don't have to worry about sudden repairs. You can find more information on this in our chapter on the maintenance costs of a used electric car.

A used electric car is therefore a cost advantage for you:

• Lower price and less maintenance than a used combustion engine car.

• Lower repair costs than a used combustion engine car.

• And constantly up-to-date technology, because updates are delivered wirelessly.

Should you lease, finance or buy your used electric car outright?

Ultimately, how you acquire your used electric car is up to you. In all cases, the depreciation has already stabilised. This is beneficial for your budget when signing the contract and at the end of the contract or when reselling.

• With leasing, you have the advantage of being able to return the electric car after a few years and lease a newer one. At Gowago, you can get your used car lease at 3.99% interest. This applies to all of our offers.
• When purchasing with a car loan, you have the flexibility of monthly payments with full ownership. This means you can do whatever you want with the car and have no mileage restrictions. Our interest rate for car loans is 5.9%, regardless of the car you choose or your financial background.
• If you buy it with cash, you are completely independent.

Gowago gives you the choice. Whether leasing, car loan or cash purchase. With Gowago Certified Pre-Owned electric cars, you can drive according to your needs.

Everything you need to know

Summary: The depreciation of a new electric car is to your advantage when buying a used electric car

The greater depreciation of electric cars mainly affects new cars. For you as a buyer of a used car, this is a win. After just a few years, you can often get a top-of-the-range electric car with less than 50,000 km on the clock at a significantly lower price than comparable used combustion engine cars. Added to this are lower maintenance costs and wireless software updates that keep your car in good condition and up to date in the long term.
Used electric cars are not only cheaper to buy, but also cheaper to maintain – a smart investment for the future.

Let's debunk the other myths! Let's Go.

That was just one of many myths surrounding used electric cars.
There are several other preconceptions that persist – but have little to do with the facts. Discover the other myths now and find out why a used electric car is often the better choice.

To the overview of electric car myths