Depreciation and Resell Value of Hybrid Vehicles

By: Thomas Jones

With any vehicle, if you are planning on owning it for any span of time, it would be wise to pay attention to the resell value of your car. After all, the depreciation of your vehicle will determine how much you will receive in a trade-in, which, considering the price of gas, it is nice to save money where you can. Talking about those same gas prices, hybrids have become the new trendy car on the market, so, in purchasing a hybrid, you may want to know just how much the vehicle will be worth. The best way to handle this would be to ensure that the hybrid you purchased has a low depreciation and a fairly high resell value.

As it stands, according to a number of reports, hybrids have a fantastic resell value at present, and the depreciation values have remained fairly low. Looking at the more prominent and popular hybrids, such as the Honda Civic or the Toyota Prius, the values are much higher, and it is possible to get as much as 85% of the manufacturer's suggested retail value. What does this mean for you, the consumer? If you own a Prius or Civic, is it quite likely that two years from now, the rate of depreciation is still much lower than that of, for example, a Honda Accord, gas-powered and typical.

The trick to studying why these hybrids are having such a great run of financial luck is because of the extremely high demand for these vehicles. The growing movement towards going "green" has encouraged consumers to put aside the larger pick-up trucks and SUVs in favor the smaller, more fuel-efficient hybrids. While people are actively trying to purchase these vehicles, however, these cars are slower to be produced. Until manufacturers begin to see the advantages of hybrid vehicles, as well as the necessity that the vehicles are on their way to becoming, your hybrid will be worth a pretty penny. Once these manufacturers start to come to speed, though, the values will begin to drop.

Now, on the other side of the argument, there is talk from credible sources such as Consumer Reports that claim hybrids may not be much more valuable than typical cars after five years or so. Typical gas-powered cars are still cheaper upfront for many consumers and with the crunch on the economy that is only getting worse, many of those on a budget will wish to snag a car that is cheaper upfront and will not cost so much to repair and maintain.

Also, when looking at the depreciation values, it is important to look at the edition of your hybrid car. If it is one of the earlier models, there may have been problems that were fixed in later models, which would decrease the resell value of the car. Most notably, the Toyota Prius was a victim of such an event. The issues with the vehicle's first edition in 1998 were only fixed in later models.

Once again, supply and demand govern how exactly the hybrid will fare in the market, and now that most major manufacturers are beginning to add hybrids to the new line-ups, consumers may want to consider whether or not buying a hybrid only to resell in five years is a wise decision. The technology is getting better, and the cost of hybrids upfront will be lowering substantially over the next five years as supply and demand begin to even out. As time passes and these cars become more mainstream, the resell values of hybrids will begin to drop and become much less profitable.

So, in looking at your hybrid, the biggest concern is to make sure that if you resell, you do it while hybrids are still less common. Also, make sure to look at the condition of your hybrid and whether or not the car's kinks are going to be worth the resell.

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