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Depreciation Thoughts

MReda

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Few vehicles can be considered investments so spending $75k on a vehicle is rarely a wise use of money. there are cheaper ways to get from A-B and still be able to haul things, go offroad, etc. We spend that much on a vehicle because we want to and because we can but not because it's the best financial decision.
This is exactly correct.

Buying the Rivian is not a good financial decision.

Buying a slightly used Tacoma is almost definitely a better financial decision, at least in the market where I live.
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Rhidan

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My brain says depreciation will be high, primarily if new EV tech is released.

My gut says depreciation could be low for the LE vehicles. Jeep Wranglers and Toyota Tacomas have the highest resale value of any vehicles. That could be due to perceived reliability, but these vehicles also have a perception as "outdoor adventure vehicles." Rivian is clearly trying to position the R1T and R1S in the same way. I also think supply will exceed demand in the first few years. You can look at any comment section on a Rivian post on twitter, instagram, or youtube. Its just a stream of people saying they love Rivian but its too expensive and they cannot wait to purchase a used R1T. Tesla vehicles have also held their value much better than a Bolt or Leaf. We all are sort of betting on Rivian delivering an awesome and reliable electric vehicle in June.
 

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Initially, you'll probably see some buyers "flip" their Rivian for more than they paid. But I don't expect that to last more than a few months.

I definitely think we'll see $35k used Rivian's in 5-8 years. We'll see them for even less than that.
That raises an interesting point, what premium might a Rivian command in the first few months? I actually have early preorders on two, an R1T LE and an R1T Max Pack. If the market is there then I'll consider flipping the first to finance the second. Thoughts?
 

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That raises an interesting point, what premium might a Rivian command in the first few months? I actually have early preorders on two, an R1T LE and an R1T Max Pack. If the market is there then I'll consider flipping the first to finance the second. Thoughts?


Seems like a high risk Gamble...
 
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njcoach24

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This is exactly correct.

Buying the Rivian is not a good financial decision.

Buying a slightly used Tacoma is almost definitely a better financial decision, at least in the market where I live.
This is where I am torn. Because Tacoma would be what I would probably buy if there wasn't the option of the Rivian tempting me. Tacomas seem to own the adventure space, along with Jeeps, so it will be interesting to see if the Rivian can crack it. And most adventure people usually don't like to drop tons of money on the actual vehicle, a lot of the best adventure cars/trucks can often be 20 years old...it's the accessories and build outs that seem to be where most of the money is spent.

Which is why I am thinking do I want 2 cars (adventure Tacoma and fun Mustang - I used to have one in my younger years and to this day is my favorite car) or 1 R1T...maybe if my fun stocks go up I'll buy R1T and Mustang lol.
 

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That raises an interesting point, what premium might a Rivian command in the first few months? I actually have early preorders on two, an R1T LE and an R1T Max Pack. If the market is there then I'll consider flipping the first to finance the second. Thoughts?
I think it's likely that at least a few early-LE deliveries will have that opportunity, if they want it.
 

skyote

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I'm also in this for the long run. I'm willing to pay to have this vehicle & performance now, as well as help a company that I like & believe will be successful in the long term.

I might be tempted to upgrade at the next big tech leap, either in batteries or autonomous driving, but I think that is 5+ years down the road. I really want to enjoy my Rivian over that span.

Another thought in the back of my mind is what an LE might be worth some day, if Rivian becomes a successful & iconic company. They have the makings to become what I see as a diehard brand.
 

CommodoreAmiga

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Jeep Wranglers and Toyota Tacomas have the highest resale value of any vehicles.
I doubt "reliability" plays any part in resale value, for Jeep.

I believe the high-resale value for Wrangler/Tacoma have something to do with the fact they rarely update those models. The Wrangler and Tacoma only get updated every ~10 years (Tacoma: 1996-2004, 2005-2015, 2016+; Wrangler: 1987-1995, 1996-2006, 2007-2017, 2018+). Brands that maintain models for long periods of time tend to have more stable resale value.

That said, I think these models are also a bit of an enigma. The Wrangler was unique in the market, for most of it's life. It'll be interesting to see what happens now that Ford Bronco is giving it meaningful competition. The Tacoma perplexes me. There is an extremely loyal following, but not matter how hard I look, I can't grasp why. It's not a particularly handsome vehicle. The powertrain can best be described as the mechanical implementation of "beige". The fact the frame isn't fully-boxed and hydroformed and that the rear brakes are still drums is an active insult to the consumer. But some people beg for sloppy seconds. Quite odd.
 

irish26

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Difficult prediction. Another factor would be the possibility of Rivian having the opportunity to lower prices the same way Telsa was able to do with the Model S over the years. I've seen stickers from Model S' in the 140s that were produced in the first couple of years. Before the refresh, the 2020 performance model was selling for $91k before options.

Is it possible the current $75k R1T is selling for $55k in 3 years? That would certainly affect resale value.
 

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Is it possible the current $75k R1T is selling for $55k in 3 years? That would certainly affect resale value.
It's possible. Battery tech is getting better and cheaper, so that's your most likely avenue to reduce cost. Unfortunately, massive price drops in the R1 lineup would be devastating to resale value for early adopters.

I hope that Rivian keeps the R1T/S "luxury" and keeps the pricing stable, while including more tech/gadgets, luxury, and range.

I think introducing the R2/R3 series at different price points would be better.

This would let Rivian grow the customer base and offer products at many price points, while keeping the luxury market and protecting resale value of early adopters.
 

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Difficult prediction. Another factor would be the possibility of Rivian having the opportunity to lower prices the same way Telsa was able to do with the Model S over the years. I've seen stickers from Model S' in the 140s that were produced in the first couple of years. Before the refresh, the 2020 performance model was selling for $91k before options.

Is it possible the current $75k R1T is selling for $55k in 3 years? That would certainly affect resale value.
The deliberate nature of Rivian's communication and control they are exhibiting gives me optimism. Controlling brand and resale value is a corporate competency.

Look at Apple and the discounting they do, it is highly controlled.
BMW leveraging leasing and corporate financing to influence the resale value of their cars and project value.

If Rivian can provide a tiered offering that maintains their brand value that will be a huge win for their longevity.
 

Riviot

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Explain what you mean by TCO....but if I think what it means you are correct vs the used truck at at 6-10 years old.
Rivian R1T R1S Depreciation Thoughts Screenshot_20210414-080807~2

Investopedia: The total cost of ownership (TCO) is the purchase price of an asset plus the costs of operation.

Edmunds: True Cost to Own pricing system calculates the additional costs you may not have included when considering your next vehicle purchase. These extra costs include: depreciation, interest on your loan, taxes and fees, insurance premiums, fuel costs, maintenance, and repairs.

Most TCO deduct your remaining value if you were to sell after TCO period. My "5yr monthly" is purchase price+all costs (except depreciation) /60 months. It's the actual out of pocket cost. I did a "10yr monthly" as well.

Attached is my full spreadsheet, it includes my Rover, wife's Civic, Tesla M3, Kona EV, Rav4 Prime, MPG/mi per Kw comparison, and Rivian models cost comparison. Unfortunately this site doesn't allow .xlsx so it's in a pdf. You should be able to convert back easily though.

**EDIT**
I took taxes off Tacoma and Rivian after learning I'm not subject to sales tax if registering the vehicle in my Home of Record and operating/residing outside of the state. (Military jargon for tax-free)
 

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njcoach24

njcoach24

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Screenshot_20210414-080807~2.png

Investopedia: The total cost of ownership (TCO) is the purchase price of an asset plus the costs of operation.

Edmunds: True Cost to Own pricing system calculates the additional costs you may not have included when considering your next vehicle purchase. These extra costs include: depreciation, interest on your loan, taxes and fees, insurance premiums, fuel costs, maintenance, and repairs.

Most TCO deduct your remaining value if you were to sell after TCO period. My "5yr monthly" is purchase price+all costs (except depreciation) /60 months. It's the actual out of pocket cost. I did a "10yr monthly" as well.

Attached is my full spreadsheet, it includes my Rover, wife's Civic, Tesla M3, Kona EV, Rav4 Prime, MPG/mi per Kw comparison, and Rivian models cost comparison. Unfortunately this site doesn't allow .xlsx so it's in a pdf. You should be able to convert back easily though.
Thanks for sharing this. When you look at all the numbers this way its very interesting. Comparing New to New.
 

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The best "value" will vary from person to person... But if I'm reading your numbers, correctly, the difference in monthly cost between a Tacoma and R1T is only $334 a month over 5 years or $63 a month over 10 years... For me, the R1T delivers SO MUCH MORE than the Tacoma, that I would gladly pay a $334 premium... And keeping the truck for 10 years the $63 premium is a no-brainer.
 

888tom888

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I find this thread amusing. Cars/RV's/Trucks are such an emotional item. Look at how many people are salivating for info. I'm one of those. I think its wise to be able to afford the vehicle you want. Buy it/lease it/finance it then enjoy the crap out of it. It is not, IMHO an investment. Whether it retains its value or depreciates 39% or 65% what does it matter. Conventional wisdom has always labelled cars as assets. Cars are a means to an end. Time on earth is short. If I'm buying a car focused on resale, then I'm doing the wrong thing. Its a depreciating item that I want, not need. So I cannot wait.
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