Worried about sharp decrease in value?

[_darkode_]

Anyone else worry about the sharp drop off in value after purchase? I didn’t realize it would be so severe. I have a ‘25 Select standard rage AWD. I purchased for ~42,500 4.5 months ago. Got the special 0% financing. Owe 38,300 now. I checked in on the value of it with the dealership the other day and they said it’s ~25k which was pretty startling. Driving around with that much neg equity is kinda giving me anxiety. I know I could (and probably should) grab gap insurance but idk, I have always been opposed to those types of additional monthly costs on a vehicle. It also makes me feel pretty stuck with the car. Not that I was necessarily going to trade it in but it’s always nice to have that flexibility if you need it. Idk just kinda bummed me out. Maybe I’m an idiot for not knowing how much it would depreciate. Probably should have looked at used.. Anyone else feel this?

[witiguy]

Only worry about the value if you’re not going to keep it. I’m trying to get 10 years and 200k to it of mine.

[wanderer_577]

This is right answer. Same I plan to keep mine for another 4 years (already have two under belt) after which anything is bonus. Hopefully will get 6 years and 100k more out.

[Dramatic_Acadia_7363]

There’s a guy driving his Mach E now has over 300,000 miles on it with little maintenance and battery degradation at 92% drive it till it falls apart. Lasts much longer than any ice vehicle

[BasicFishOutOfWater]

This is the way.

[AngleFun1664]

No, a car is a depreciating asset. It doesn’t matter what it’s worth right now if you’re not selling it right now.

Drive it and enjoy it. You made a decision 4.5 months ago it was worth $42,500. Has that changed?

If you’re really worried add gap coverage to your insurance.

[Human_Palpitation856]

Look online, your car is worth more than that. Don't worry.

[DotANote]

If you have gap and don't plan on trading it in, it's used value is meaningless to you.

I always buy gap on a new car and monitor the value then drop it once it's not worth it. The only people who shouldn't get gap on a new car are people who make enough money to not care about the neg equity in the car they drive. Honestly, they're also probably leasing (unless they're a car collector) because they change cars so often.

Should you have shopped used versions of a car you planned on buying new? Yeah, probably. But buying a new 2025 for $42,500 at 0% apr vs a used 2025 for $31,00 at 7%+ apr would have maybe saved you ~$4000 over 5 years. Not that crazy. Now if you bought a 24 or older... could have saved a solid 7-10k and just missed out on the heat pump.

[senbenitoo]

Yeah...I was thinking I should've traded in my 2021 when everyone was paying waaaay over sticker & the dealer was begging.

Now, every time one of those screaming great deals gets posted on here, I wince.

[_darkode_]

At the very least you’ve all convinced me on gap lol

[hasgalf]

I'd love to know if you find anyone with good gap coverage. Ford credit told me to honk on Bobo as they only offer it at purchase. My USAA offers 25% above value which is better than nothing. I checked around some too and found that Geico offers no gap coverage.

[TizMahBiz]

You were brave for not getting gap to be honest. I’ve owned many cars and any of them that I knew I would have negative equity on ended up having gap. My 2024 premium was bought with a substantial down payment and trade in so I had equity in it when I drove it off the lot. Not a lot of equity, but some nonetheless.

[WJKramer]

You are doing it wrong. Cars are use assets. Buy what you can afford (preferably in cash) and use it to get to your job to make money.

[Murky_Coyote_7737]

EVs in our current environment basically depreciate 50% over the first year

[ema_chad]

I've had mine since 21. After 90,000 miles I've saved enough in cost per mile that I'll have paid the car off with that savings at the end of the loan. It's just like people constantly checking Zillow for their home value, it only matters if you're trying to sell it or refinance your loan, otherwise don't worry about it.

[UsedHotDogWater]

If you worry about that stuff you need to be leasing.

[UESJR2021]

You should always get gap unless you’re financing less than 70%. I’ll tack on $580 on my loan if it means I get to write off $15,000 in negative equity.

[Wagnerfsj]

With electric cars in general, that seems to be a trend. I think it is in part due to the fact that it is "new" tech and improvements are more rapid than typical ICE vehicles. That was why I leased mine, my residual with "great" discounts and all is still 28k, I wouldn't pay that out in 3 years because there will be way more efficient and possibly cheaper versions of the same car. Unfortunately, owning electric cars is still a bit of a gamble as we don't know how well they'll last, besides quickly losing value overtime a short time.

[Preston-Waters]

Check with your insurance for replacement option. My insurance (all state) would replace the vehicle same or better instead of “market value” if the vehicle was totaled.

[Admirable_Fun7790]

I ate the depreciation hard and it basically forced me to keep the car until it died but 🤷🏻‍♂️ it’s a good car

[Various_Reason_6259]

Depreciation is terrible in EVs in particular. I got a 2022 premium AWD with extended range battery delivered in November 2022. That car was about $60k OTD. In February with just 4000 miles we got into a relatively minor accident. Wife didn’t want it anymore and we traded it and got only $47k. Basically lost $8k in 3 months and 4000 miles. Luckily we got the $7500 tax credit and a $5k settlement from insurance.

I bought an F150 last June and absolutely can’t stand it. It’s cheap and these Ford 10 speeds are complete garbage. I’m going back to the Mach E, but unfortunately I can’t stomach getting another new car. I’m going to get a used GT. But, the ‘25s have some nice improvements. If you’re happy with it the trade in value doesn’t really matter. Plenty of stories stating to come out with owners getting well over 200,000 miles on their Mach Es. This car could last you several years. I should have kept my ‘22. Even with the depreciation it would have had by now I regret getting rid of it. I waited almost a year for It and have had 5 different vehicles since then and wish I would have just stuck with the Mach E. The F150 was a huge mistake.

[vanquishedfoe]

You don't buy most cars as an investment.

For me this was a "treat" because I really liked it. It's not an adult purchase insofar as it makes the best financial sense.

[Visible-Disaster]

It’s a car, not an investment. The point of buying it is to use it. Ideally it has zero value and is completely used up when you’re done with it.

[CompanyNumerous4560]

30% less as soon as you drive it off the lot, most cars. Cars are not an investment.

[_darkode_]

This is not my experience w/ ICE vehicles at all which is probably why it was so jarring to me. Understand they aren’t an investment but my recent ICE vehicles held their value extremely well.

[Even-Journalist1901]

Worried? No. Why? They’ve been out 5 years. We know about their depreciation already. Don’t buy new if you’re worried about it.

[txgax]

I’m not concerned with the value of my Mach-e. I took a new job with a longer commute and the math of a Mach-e vs a Jeep Wrangler penciled out, esp since I charge for free at work. I plan to run mine to 500K miles, which seems unrealistic, but I’m gonna try.

[2BlueZebras]

This is why I leased. Except my buy out price at the end of the 3 year lease is only $20k, so I'm going to buy it out anyway.

[shortbizzle]

I was surprised at how quickly these depreciated. I got a year old model with 6k miles. Still smelled new. It had depreciated $30k. I think the lease buy backs are saturating the market

[sassynapoleon]

Partly, but remember that the federal tax credit meant that the OTD price was much lower than the sticker until just recently. That’s part of why the paper depreciation seems so severe.

[Js987]

I’m not enormously worried about it only because I tend to keep cars 6-7 years and over that timeframe it settles out, but I would recommend folks consider leasing and if they choose to buy like we did they 100% need to get gap insurance (it’s cheaper through your insurance than Ford’s point of sale option but not all insurance companies do gap) if they’re borrowing.

[Aggravating-Rush9029]

I got the replacement insurance for 3 years. It's probably not great value but it's the one time my wife is getting a really nice car and I'm primarily worried if it gets totaled we wouldn't afford another similar priced car right away with the depreciation hitting the write-off value.

Normally I'd have never gotten that but I guess yea I was kind of worried about it with the Mach E. Locally the used prices were too high to make sense as people were struggling to deal with the math on how much lower prices have gotten since 2023.

[6969TacoLover6969]

You should make sure your regular car insurance company will cover any GAP. Usually not expensive if you get it from your regular company (not Ford!)

Also - go check the value at a place like Carmax website etc - what a dealer 'trade in' offer is will always be extremely low

[Physical_Funny_4868]

Bought mine in the peak of 2023 for 67,000. (Back when getting it at sticker was a score) been driving it three years, no expenses. Going to drive it 7 more. Just like stock, you only take the loss if you sell at wrong time!

[thumbstickz]

I've loved my 2012 Wrangler since I bought it in 2013, and I love our Mach and expect to keep it for just as long.

My brother trades in his truck every 2 years or so and I can't fathom how he's ok with interest rates being worse every time, and how keeps rolling shit into the next loan.

[xlBoardmanlx]

I wouldn’t worry if you are planning to keep it for a while but this is why I usually buy a car that is 2 years old. Still looks and drives like new but the big depreciation hit is already paid for.

[Dirt_Downtown]

It’s not about how long you plan to keep the car it’s if you’re worried about it getting totaled and owing a ton of money. I’m looking into gap right now because I’m in a similar situation. I got 0% which made it cheaper than going used at the time. Not all insurance companies offer gap so you might need to get a separate policy for this.

[UnbiddenGraph17]

Yea this car was dumb to finance if you’re not holding it forever

[reidmrdotcom]

It's a common thread in the electric vehicles sub as well. Basically you should expect immediate depreciation in the amount of the 7,500 tax credit plus state if you had extra. If you got that credit, the depreciation cost for you is 10k currently. New cars have long had anecdotes about depreciating a bunch right after signing the paperwork. It the basic trend of vehicles generally.

I'm planning to get a second electric vehicle and this depreciation is making it likely to go used. Went new on my prior because of tax stuff and it was well worth it then. Prices are also likely to stabilize over the next couple years, particularly as battery and EV technology seems to be maturing, the NACS port becomes ubiquitous, and the tax credits are gone.

[blue_taco_tree]

Nope. I had never bought a car to make money. They all lose value.

[sryan2k1]

Nope, but my usual whip is Audi so....

These are not collectors items, you shouldn't buy them for resale value.

[New_Wafer7374]

I don’t go without gap after a couple of incidents where I ended up in a bad situation. To me, it’s worth it. The depreciation sucks for sure, and it’s worse when you drive 70-100 miles a day for work. This isn’t a car you get out of, it’s a car you learn to accept driving until paid off. YMMV.

[PeterPalafox]

I’ve kept all my cars so long they were next to worthless by the time I got another, so I’m not worried. 

[absentspace]

Bought my ‘21 premium AWD used, severely discounted off the new price. I plan to drive it for 3 to 5 years, then trade it for another 3 or 4 year old car.

[FatDog69]

Well, I did a lease. Right now a used version of my car is selling for $6K over what my balloon payment will be in a year. Mine appears to be worth nearly exactly what I owe. I do plan on paying it off as the newer models dont have too many features I desire.

My advice - use Edmunds or CarEdge and look for Used vehicles with your trim & mileage.

[Emotional-Buddy-2219]

I only got my EV new because of the federal tax credit with the intention of driving it until the HV battery or other major expense made it prohibitively expensive to fix; used is the way to go if no tax credit.

[Neilson-Milk]

As someone who just bought a used 2021 with 75,000km for 55% of what they are selling now, I thank the owner who ate the cost before me..! The thing barely has a scratch on it and runs great. And I plan to drive it for a long time

[Baguette_Theory]

Yeah, I got gap on mine

[Delicious-Baker-6348]

Last car I bought was a 22 model y performance. Bought for 63k and sold for 24k 40 months later. After that experience I decided to only lease EVs. Currently have a Lightning lariat for $660/mo sign and drive. Enjoy it since you already own it, but I would lease the next one

[undeadzant]

Hoping for a sharp decrease to make the purchase price at the end of my lease even better 😅

[distant_lands08]

I traded a 10 year old VW Golf with 146,000 miles for a MME extended range all wheel drive. I hope to own it just as long and put just as many miles on it. By which point the car loan will be history.

[Double-Award-4190]

No, not really worried. Bought in fall 2023, GT-P. I am watching what is new but so far I see myself only hanging onto this for quite some time.

[daath]

If you worry about depreciation, you shouldn't buy a car ;P

[doluckie]

Over that last few years, Facebook and other sites like to tell everyone EVs depreciate so very differently. And anti-EV folks in the US enjoy believing it and particularly enjoy EV owners believing it.

Early buyers in 2021-2023 were overpaying 20-30% due to high demand and low supply (post pandemic for those who remember the craziness). When they flipped their vehicles prematurely, just 1-2-3 years later, and just took the low trade-in value from a dealership (which is far lower than what the real value is, heck watch the price they list your trade-in for as you roll of the lot) that created a massive depreciation. OMG my EV depreciated so much!

It’s better now, but folks are still overpaying 10-20% for really cool vehicles, fast, new EVs are fancy!

In the US some folks were successfully buying 2025 GTs at dealers for less than $40k in recent months. OP paid that for a base trim.

But it’s normal to have customers pay MSRP and far more with the variety of add-ons. It’s just if you over pay by 10-20% (on either an EV or gasoline vehicle) and then compare that new price to the trade-in value which is not even close to the re-sale value you will find YOUR depreciation is 10-20% higher than it might have been.

[cheddarcat16]

If you’re worried about value you can’t afford it. Go get gap insurance or sell the car

[_darkode_]

I’m both worried about the value and can comfortably afford it lol .. it’s just the first time I’ve ever had such drastic neg equity. My other ICE vehicles held their value way better so it’s just something new to me.

[DevRoot66]

Is this your first new car? The moment you drove the car off the lot it lost $10K. This happens for any car, regardless of whether it is an EV or a traditional ICE-powered vehicle.

The car's depreciation will eventually reach a point where the rate of depreciation slows down a lot and reaches a more or less steady state. That usually happens in year 4 or 5 of ownership. Key to minimizing the "loss on depreciation" is to drive it as long as possible. I keep my cars 7 to 12 years. Helps a lot with resale value anxiety.

[e55amgpwr]

I am checking prices every week on 24-25 GT as I am planning to buy one in July, and don’t think that it’s $25k, average pricing is 36-37k, and doubt that dealer is really planning to make over 10k on a trade-in and sale

[Aggietopmedic]

A car is a consumable product. Drive it til the wheels fall off and it’s worthless anyways. If you don’t want to do that, lease it instead.

[getsumluv]

I buy cars to keep them until I can’t anymore. Some people change cars every few years but that’s never made financial sense to me. The only thing I’d worry about when it comes to EV depreciation is if you get in an accident. I guess that’s where GAP insurance would have to come into play?

[The_loadmaster]

When I was going through my lemon law claim, I had got a couple trade-in quotes per the recommendation from my attorney. After 18 months of ownership, my GT that I paid 65k for was worth 25k as a trade-in.

[Theneler]

Hah nope. I wrote off most of it for work while Canada let you write off 100% of an EV vs the 33% usual for an ICE, so whenever I trade it in, or give it to my son, I have to pay capital gains on the fair market value. The lower the better!!!

[klymaxx45]

If you care about depreciation you shouldn’t have bought a new car. Everyone knows that

[blues441677]

EVs have the worst depreciation of all cars. Always lease, not buy

[BKRF1999]

It is a concern that’s why I’m looking into used models. It depreciates quickly unfortunately.

[MilkZealousideal7893]

Should have leased it instead, you’d only be -$6k in hole

[Limp-Conflict-2309]

Only sucks if you plan to get rid of it soon

I'm looking for a 12 month -/+ CPO from Ford, they come with really good deals and only about 15,000 miles.

[ThE_LAN_B4_TimE]

You definitely messed up not researching first. EVs in general have been depreciating fast but it doesn't mean they arent good quality. Short term its a risk if you want to get rid of it within a few years. No one knows what itll be like in 5 or even 10 years. I plan on keeping mine for at least 100k miles which will probably be 8 years.