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Depreciation Thoughts

Riviot

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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.
Correct. It assumes equal depreciation rates to the Tacoma, so anyone looking to sell after 5 years and get the "latest and greatest" may not be at that much of a loss. Just more up front costs. For those of us planning to hold for the long haul, 10 years is near break even point. After that, it's savings.

It's the same logic for going solar, up front investments for longer term returns, a concept understandably hard for most Americans to swallow. "It's my money and I need it now!"
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MReda

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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.
I can offer my personal experience, doing exactly what you are suggesting. I recently sold one of my vehicles, but for the last few years, I owned two cars, an Audi S4 and a Lexus LX470 (this is basically a Lexus branded Land Cruiser 100 series). One for fun, one for hauling stuff into the mountains. The Lexus is not the most interesting thing to drive, but it just works. The Audi is a great car to drive, but it mostly sits in the garage. With the exception of commuting, almost every time I drive somewhere, I need to take the Lexus.

In years passed, I've had plenty of periods where I've owned two cars (or more, plus motorcycles) to juggle different needs, this is just the most recent example.

I think it really comes down to which need is the more frequent need. For me, it's the utility, and ability to handle rough roads.

If you want to compare financials, depreciation is something to consider, but others have pointed out TCO. You are doubling costs like maintenance, insurance, tires, and even just using up a garage space. As much as I like having multiple cars, the dream is to have one that really satisfies the need. Too soon to tell if the R1T will do it, but that's my hope.
 

emoore

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I also keep my cars a long time and the TCO calculations look great compared to an ICE truck. My biggest concern is that since I tend to keep my cars for a long time can I replace the battery pack after 8 years (at a cost of course)? Battery technology will be much better in 8-10 years and I would like to take advantage of that but not have to buy an entire new truck.
 

DucRider

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Short term depreciation will be low as long as Rivian is in a low production - high demand phase. Look at the Model Y (or even Model 3) for examples.

Nobody "needs" an 800+ HP adventure vehicle, and there will be cheaper alternative to solve your actual transportation requirements - even with a boosted "fun factor" allowance.

This vehicle is approaching equaling the total cost for all of our 4 wheel vehicles over the last 40 years (at least without an adjustment for inflation) and does indeed give serious pause. The last vehicle purchase we financed was in 1986. We buy 1-2 year old vehicles and keep them for ~10 years (depends on when we guess repair costs are going to become significant).

We have been leasing our EVs for about 8 years - both Hondas that are/were not available for actual purchase. They met our needs, allowed us to get into the EVs with relatively little commitment, and were put out there at bargain prices. Did some math a year or so ago that is interesting.

We bought a 1 year old used hybrid one month before we leased our Fit EV. We leased the Fit for 5 years (extended at a lower cost), then switched to the Clarity Electric. Our EV to hybrid annual miles are pretty close to 2:1 (both of us will pick the EV when given the choice).

  • Looked at the depreciation of the hybrid (we bought at <70% of original MSRP), plus maintenance costs (I do my own oil changes/tuneups).
  • Looked at the total lease and maintenance costs on both the EVs. The Fit EV included everything - all maintenance and even new tires when we extended the lease. It even came with a 32A Leviton EVSE and included $0 deductible comp/collision insurance - all we had to provide was liability.
  • Leasing the Hondas for 7 years cost less than buying the hybrid - without factoring in lower fuel costs (or perks like insurance/EVSE).
What does that mean for the Rivian - not a thing. No way I could have run the above scenario when first leasing the Fit EV, and anything about the Rivian long term is pure guesswork. Do I expect the Rivian to be cheaper than buying an ICE (something we shudder at the thought of and have said "never again")? No.

For us it goes in the recreation/vacation/hobby category as a gradual replacement for our motorcycles. We've been tent camping off of the motorcycles for over 35 years and have been to many (most?) of the locations in the West that show up in the RAN thread. The ground has gotten harder and rockier, the rain wetter, the cold colder, and the heat hotter as we have aged. A RTT and the R1T may be our next step. We'll still take long trips on the bikes, but likely transition to motels and the parks/hiking/camping will be from 4 wheels. Maybe the Rivian but we need to test drive it and give it some hard thought before dropping $75K. We are renting a roof top tent in July to see what we like/don't like about it. If we hate it, then a Rivian is much harder to justify.

All of our vehicles moving forward will be EVs - the experience is that good (for us). The only question is what those vehicles will be. For recreational travel the only game in town today is Tesla (wth their supercharger network). The RAN and Rivian vehicle specs make them a serious contender moving forward. We are not in a place where we have to get one now - we can wait for the explore Max Pack (that is a possibility even though my configuration is currently LE). Or maybe even longer for a dual motor lower HP vehicle.

If we go the RTT route in the next year or two, the choices (for us) are Rivian or Model Y. The CT is off the table for a number of reasons, and not much else ticks the boxes for range, available charging, and a roof rack that can support a small RTT. The id.4 has an outside chance if the EA buildout accelerates significantly.
 

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JeremyMKE

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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.
Totally agree, I am for sure rationalizing what I know is too much money to spend on transportation. It is NOT and investment for me but I am hoping for some flexibility that resale affords me. I have been very lucky the cars I have owned for the last 10-15 years have held a strong resale value.

We are on our 4th Sienna the first three were leases and the resale out-performed the lease. The 4th Sienna was bought outright and is our forever minivan. Minivans RULE BTW.

We leased because young children make vehicles disgusting among other reasons.
My BMWs were used and desirable models so I did ok, 5 series wagon and the M5.
 
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SANZC02

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I think you can look at a 2016 Model S RWD in the used market, right now seems like they are in the 39K range. It is a 5 year old car that was in the 75-80K range when new. That is a good indicator of the used price, keep in mind 4WD Trucks and SUVs tend to hold there value a little better than a sedan.

You also have to factor in the 7500 (plus what ever local incentives there are) if you add that to the 39K then the actual value would be 46.5K to you as you already would have pocketed the tax incentive (or you have to make that 77500k initial value be 70000k).

As other people mentioned in this thread, if you are looking at depreciation to justify purchasing a new car, you would never be able to make the case to pull the trigger.

For me I justify this Rivian purchase the same way I justified the Model S purchase 5 years ago. I like it, I want it, and other than having 80K less money in the bank will not negatively impact anything so may as well use that hard earned cash to put a smile on my face.

That being said, I would never recommend this purchase to anyone if it is going to cause any sacrifice or hard ship to the personal/family budget. This absolutely is a want decision not a need and should only be done if you can afford to spend the money.
 

JeremyMKE

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Resale for Tesla is very complex.

There I said it, HOWEVER, the fact that all the Model S' basically look the same is a specific choice that Tesla made. IMO it influences resale value.

To the average consumer they can buy a 2016 Model S and it appears to be identical to their neighbor's 2021 Model S plaid.

This will influence what someone is willing to pay. Percieved value is something. Buying a 2016 Model S for 40K might be palatable because it looks like you have the latest and greatest.

I got a $140K car for $40K Consumer might spend more when looking at that Perceived Value

Just a theory....
 

SANZC02

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Resale for Tesla is very complex.

There I said it, HOWEVER, the fact that all the Model S' basically look the same is a specific choice that Tesla made. IMO it influences resale value.

To the average consumer they can buy a 2016 Model S and it appears to be identical to their neighbor's 2021 Model S plaid.

This will influence what someone is willing to pay. Percieved value is something. Buying a 2016 Model S for 40K might be palatable because it looks like you have the latest and greatest.

Just a theory....
Probably does not hurt that is comes with free lifetime supercharging that is transferable... :)

On that note though, you can look at 2015 models with the old nose and they are in the 35-40K range as well and a year older. I think a lot of it has to do with people want EVs and there is just not a lot of options out there. That will probably help the Rivian as well in the used market in the 4 to 5 year range, probably not beyond that though as more and more options become available and start hitting the used markets.
 

n8dgr8

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New & expiring tax credits will have an effect on resale value.

My wife really wants to keep our Model S. I am pleasantly surprised at its resale value after 6 years ... very tempted to trade it in for a brand new Model Y for little additional money. Typically we keep cars for 14 years.
 

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Moonjock

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I'm interested but don't really care, the R1T will be replacing my 2002 Avalanche. My kids drive our 1999 Saturn. I usually drive then till dead or almost dead.
 

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I'm interested but don't really care, the R1T will be replacing my 2002 Avalanche. My kids drive our 1999 Saturn. I usually drive then till dead or almost dead.
I'm usually done once the third wheel falls off. I drive 'em till they drop and then donate or dump 'em.
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.
Amen to that! Years ago, BMW ran an ad where one guy says to his friend "My BMW retained 95% of it's value after one year." to which his friend exclaimed "I wish all my investments did that well!" I'm guessing the friend was a day-trader. If anyone wants to entrust all of their assets to me and would be thrilled to get 95% of them back in a year, feel free to message me. ?
 
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DuckTruck

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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.
Nailed it!???
 

Ryanj

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Hello all! Relatively new here and the Rivian reservation family but equally excited about our over the top family hauler (R1S). We have had 3 EVs now starting with the i3 which my wife adored and now have the Model 3 and e-tron. With experience in 3 brands EVs, I believe that a huge factor In future values is OTA updates. As I know many of the the Tesla owners on here can testify to, waking up to a new update always feels exciting. I tend to be In the ”latest and greatest“ category rather than “drive it until it dies” but with OTA updates and potential minor hardware upgrade options ie. MCU, we can now have both. IMO, this will have a significant impact on used EV values.

Even with exponential battery improvements, I believe that we could see a shift to longer ownership periods and higher resale values. Even the legacy brands are reluctantly adding OTA updates thanks to Tesla and now Rivian changing the game.

Anyway, more food for thought in trying to compare new EVs to traditional ICE depreciation.
 

riviancanucknb

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Trucks and true SUVs hold their value better than sedans in general. so you have that going for you at least.

Also, these cars are highly unlikely to drop in value for the first 12 months, when demand will exceed supply. The same happened with the Model S when it launched and is now even still true with the Model Y... used lower mileage Model Ys are so hard to come by that you will end up almost paying the same as buying new. Hell I have seen them HIGHER than new advertised as "skip the wait".

I fully expect the same to be true of Rivian for the first 12-18 months.
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