Depreciation and Resell Value of Hybrid Vehicles

Depending on how long you intend to own your vehicle, you will need to pay special attention to the depreciation and resell value of your vehicle once you drive it off the lot, in the first year and beyond. This factor also applies to hybrid vehicles and you should make sure that your hybrid has a high resell value and a low depreciation.

Currently, hybrids appear to have an excellent resell value and low depreciation values, according to some studies. In fact, established hybrid cars like Toyota Prius Hybrid and the Honda Civic Hybrid have resell values around 80% to 85% of the MSRP, or manufacturer’s suggested retail price. This means that after two years, the hybrid vehicles have an extremely low rate of depreciation when compared to their conventional counterparts.

However, this high resell value and low rate of depreciation has been due largely in part to the high demand for hybrid vehicles over the past few years in junction with the low supply and slow rate of production. As the rate of production increases to meet demand and more manufacturers come on-line to the reality of hybrid vehicles, the resell value of hybrids, even the most established vehicles will lose some of their resell value.

Along with this, some reports, even coming from Consumer Reports, have stated that many hybrids may not have a much higher resell value than their conventional counterparts after five years. And since the conventional counterparts have a much lower upfront cost, they may be more beneficial to consumers with a tight budget who can’t take on higher monthly payments just to have an eco-friendly or fuel-efficient vehicle.

Especially with vehicles like the first editions of many hybrid vehicles, owners should be careful to not trust completely in the current estimations for depreciation and resell value since first editions tend to have the most problems. For example, Toyota Prius’ premiere edition in 1998 didn’t have as high of a resell value as current models because it still had many kinks that the manufacturer needed to work out in order to make the vehicle viable for the consumer market.

Additionally, nearly every manufacturer on the market has at least one hybrid in their lineup with plans to add even more hybrids by 2010. With even more choices and better technology coming out in the next 2 years, consumers who have the intention of purchasing their hybrid only to sell it in five years need to keep abreast of the developments in hybrid technology.

Also considering the fact that in the next five years, the upfront costs of owning a hybrid will lower substantially as demand and supply meet in the middle and eventually reverse places, consumers need to be very aware that trading in or selling off their hybrid vehicle of now will become increasingly difficult and will not be as profitable as they would like.

Remember, even though hybrids are hot and in high demand on the market right now, they will continue to grow in the marketplace and become more commonplace over time.