How well do EVs hold their resale value?

Lucid Air Dream Edition | Front view

Are you considering making the switch to an electric car? Many people are doing this right now and this is for good reason, but it is important to think about the future when it comes to electric cars and whether or not they hold their value the same as traditional vehicles. Vehicle depreciation can see motorists lose thousands of pounds when they sell their cars, so what is the situation with electric models?

Depreciation

Traditional cars tend to lose around a third of their value after just one year and over half over three. Every car is different, though, and there are various factors that determine the rate of depreciation. The same can be said for electric vehicles, but the rate of depreciation seems to be slower as electric cars are heavily in demand right now with so many people switching to save money and reduce their environmental impact.

Tesla Model S – 2021

Buying an electric

Electric cars depreciate slower at the moment, but they can also cost a lot more to buy than a traditional vehicle. There is a government grant available, but even with this, you will still be paying a fair amount more for a new electric car compared to traditional petrol or diesel-powered vehicle.

Tesla Model S Plaid 2021

Other costs 

Maintenance costs and insurance are also higher with these types of vehicles, but it is important to note that these costs will come down as electric vehicles become the norm. Additionally, it is important to take a long-term view with electric vehicles as you will make huge savings over the long term (especially with rising fuel costs).

Getting PCP gap insurance

Many people opt for a PCP deal on an electric car, which is smart as it can spread the cost and you do not have to commit to the purchase. If you do go down this path, it is important to arrange a PCP gap insurance policy. This is because electric vehicles do depreciate in value and cost more to buy. This means that if you were to get into an accident and the vehicle was written off, you could be short of thousands of pounds to clear the outstanding finance or pay for a new car.

Rivian R1T Launch Edition 2021

The electric car revolution is gathering speed and it is easy to see why. Depreciation is something that you always need to consider when buying a new car, though, and electric vehicles do depreciate. As with any type of car, there are various factors that determine the rate of depreciation, so you should always research this before entering an agreement and make sure that you have protection in place in the form of gap insurance.

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