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Depreciation Thoughts

njcoach24

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Cars in general are worth less than 20% after year year one....by five years has lost 60% of its value. On a 75K car that's 45K in depreciation. 75K is serious moolah and I really love the Rivian, look at pictures every day and dream of where I'm going in it. I'm enticed by the idea getting a used used for 35K and used classic muscle car for 15K...and have 25K left over to add overlanding accessories to my 35K truck like a RTT, racks, bars, , ect...and be under the 75K.

Obviously I will lose the state of the art tech that the Rivian offers + EV and possibly reduced service costs. But I'm really looking at long term value, is 75K the best use of money on one car if it will really be worth only 30-40K in a couple of years.

I want it but am enticed by the used car market. Anybody else have these thoughts or thoughts on this topic?
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jimcgov3

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There are a couple questions that need to be answered first...

How long do you plan on keeping this Rivian?

What is this $35k used overlanding rig?

I know we are years away from a TCO on a Rivian, but what is the 5 year TOC on your $35k used truck?

I think you will be surprised how much that $35k used truck over 5 years will actually be vs Rivian.
 

CommodoreAmiga

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I expect depreciation to be high. I wish it weren't, but realistically, it will be.

There are a lot of factors stacked against us, when it comes to resale value. High initial cost, EV, rapidly improving technology, brand uncertainty, take your pick.

I was a bit relieved when Rivian announced the 8 year, 175k mile powertrain warranty. It made me feel a bit better about keeping the truck, long term. For me, that's the only realistic way that I can justify the high cost -- amortize it over a long service life.
 

Caymanwent

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Cars in general are worth less than 20% after year year one....by five years has lost 60% of its value. On a 75K car that's 45K in depreciation. 75K is serious moolah and I really love the Rivian, look at pictures every day and dream of where I'm going in it. I'm enticed by the idea getting a used used for 35K and used classic muscle car for 15K...and have 25K left over to add overlanding accessories to my 35K truck like a RTT, racks, bars, , ect...and be under the 75K.

Obviously I will lose the state of the art tech that the Rivian offers + EV and possibly reduced service costs. But I'm really looking at long term value, is 75K the best use of money on one car if it will really be worth only 30-40K in a couple of years.

I want it but am enticed by the used car market. Anybody else have these thoughts or thoughts on this topic?
If you can find a used car in perfect condition you are always way ahead. To me, I really take car of a car when I buy it so it is always worth more to me than what I can sell it for. Unless I get into an accident, I donā€™t see how I age a car by 20% in the first year.
 

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It will be interesting to see how the Launch Editions depreciate. If the vehicle is as awesome as we hope, the production capacity is low, and the demand is high, then Economics 101 says that resale value will be high.

I donā€™t think anyone will be getting a $35k Rivian (that hasnā€™t been in a major accident) in the first 5-8 years.
 

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njcoach24

njcoach24

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There are a couple questions that need to be answered first...

How long do you plan on keeping this Rivian?

What is this $35k used overlanding rig?

I know we are years away from a TCO on a Rivian, but what is the 5 year TOC on your $35k used truck?

I think you will be surprised how much that $35k used truck over 5 years will actually be vs Rivian.
If I drop 75K I plan on keeping it 10 years + but might need to drop a wrap or something mid life to keep me from not getting sick of it. Problem is tech improves so quickly now, will I want the latest and greatest in 10 years (probably yes) but I won't want to drop another 75K I'm sure.

35K would be either a used Tacoma or similar sized pickup to Rivian but I like the Tacoma look. I know the quality isn't comparable. I'm calculating the extra money for accessories as 5-15K depending on what I want....like the idea of a camp kitchen just not sure its a good idea to cook next to your truck in the woods with bears and having your tent above your kitchen. So I wouldn't get that but everything else I'm sure I want.

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.
 

azbill

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I always take what I believe is an uncommon approach to cars, at least these days. I usually drive my vehicles until they drop, i.e. have to go to the scrap yard. In the last 20 years, I have only traded in 1 vehicle. I currently have 2 vehicles that are 2008 models, one of which is a Saturn Sky, which they only made 54K of and will be a collectors item in the future. The other is a GMC pickup that is approaching 200K miles and is not worth much even as a trade-in.

So for me I could care less about depreciation, it is totally about how useful the vehicle will be over its lifetime. This is also why I have never leased a vehicle.
 
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njcoach24

njcoach24

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It will be interesting to see how the Launch Editions depreciate. If the vehicle is as awesome as we hope, the production capacity is low, and the demand is high, then Economics 101 says that resale value will be high.

I donā€™t think anyone will be getting a $35k Rivian (that hasnā€™t been in a major accident) in the first 5-8 years.
Just for fun I'm looking at used Model S & X...each of those at 4-5 years old...selling on Tesla website 2016 S - 43K, loaded with features and low miles, 2017 S - loaded/low miles at 47K. 2017 X, loaded/low miles at 58K. New X starts at 85, New S starts at 75.

I don't know if its fair to compare Tesla vs Rivian since its not really in the same class and Tesla is the hotness right now. Maybe Lucid vs Tesla will be a better comparison when those start selling but even Tesla's don't hold that well. To lose 35K+ in a couple of years, unless you are buying the car in cash these people must be under on what they owe on their loans or just breaking even.
 
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njcoach24

njcoach24

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I always take what I believe is an uncommon approach to cars, at least these days. I usually drive my vehicles until they drop, i.e. have to go to the scrap yard. In the last 20 years, I have only traded in 1 vehicle. I currently have 2 vehicles that are 2008 models, one of which is a Saturn Sky, which they only made 54K of and will be a collectors item in the future. The other is a GMC pickup that is approaching 200K miles and is not worth much even as a trade-in.

So for me I could care less about depreciation, it is totally about how useful the vehicle will be over its lifetime. This is also why I have never leased a vehicle.
For me I will want to take this approach if spending the type of money we are talking about. And btw, I loved the Sky when they dropped. Rarely see them on the roads any more. I'm in my first lease now, I am starting to regret it as I have 1 year left, money in the toilet.
 

CommodoreAmiga

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If you can find a used car in perfect condition you are always way ahead. To me, I really take car of a car when I buy it so it is always worth more to me than what I can sell it for. Unless I get into an accident, I donā€™t see how I age a car by 20% in the first year.
You lose 10%+ just by driving the car off the lot. You could literally buy a new car in pristine condition and drive it straight to CarMax and you'd have lost 10% or more.

It doesn't matter how well you take care of the car, it's not "new" anymore. Most consumers will place some value on "new", so your not-new vehicle will always be worth less than that value.
 

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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.
 

CommodoreAmiga

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It will be interesting to see how the Launch Editions depreciate. If the vehicle is as awesome as we hope, the production capacity is low, and the demand is high, then Economics 101 says that resale value will be high.

I donā€™t think anyone will be getting a $35k Rivian (that hasnā€™t been in a major accident) in the first 5-8 years.
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.
 

JeremyMKE

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I am going to keep a strong Eye on values and technology progression.

This is my first "New" vehicle since I had kids. I have been buying fun used cars and investing in them like my M5 as I am not a commuter or high mileage user. I fly alot, at least I used to ;)

If my LE hold strong value and it might, I would strongly consider selling it in 3-4 to buy a longer range Rivian and keep that for 10 years.
The tax incentive is doing what it is intended to do and pushing me into an EV slightly earlier than I might have jumped in.

I love vehicles, but am fully aware they are an easy way to waste ALOT of money, so the 80K or so I am spending here is freaking me out and the depreciation is an important factor for me. I am simpatico with @CommodoreAmiga the warranty really ameliorated my concerns.
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