Heading to $0 value? Not sure if makes sense to keep...

[MachEMaster]

I am driving my MME as a daily commuter, and enjoying the gas savings. I will definitely upgrade before the 8 year battery warranty expires.

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[1969Mach1Mike]

Thanks, I understand but I mean in the sense that nobody will want to buy a used car for $10,000 that needs a $30,000 battery replacement because they could just buy a brand new car for something comparable.

The battery isn't going to cost 30k when in completely fails. This will be many years from now. You cannot use today's numbers for a replacement value. That is bad math.

 

[ctenidae]

If the car still suits your needs, keep driving it around as an unrealized loss. You're really only losing something if you sell it.

 

[Just Lurking]

Not trying to be controversial or raise hysterics here, but the way I look at a car is ultimately what is the cost per mile.

Ouch. Using this metric, my first year of depreciation cost me well over $4/mile.

My car has depreciated about 40% using Edmunds as a baseline for current value. That's abnormally high by historical standards, but I don't expect it to continue depreciating so quickly. Selling now and buying new again would just set me up for another large depreciation hit.

My hope is that depreciation slows down and at e.g. the 5-7 year mark it will resemble a more typical car value of the same age.

 

[P. T. Magoo]

My perspective will likely seem topsy-turvy to some, but hear me out.

I don't look at an automobile as an asset. I look at it as a tool. When I break a wrench or a screwdriver, I replace it. Can't remember the last time I sold a wrench although I suppose one could.

With cars, I do the same as I do with computers. Buy the best I can afford when I need one, and use it until it's either so accident-damaged or so worn out or so hideously obsolete it can't be used effectively anymore. A couple cars ago, my spiffy '05 Mustang GT had 320K miles on it when Bambi the Bruiser took it out (first day of deer season though so I got some bragging rights out of the transaction at least). Considering how often I washed that car in the winter and how much I spent on preventive maintenance over the years my cost per mile for those 320K miles was likely on the high side, but it was a fun car and still in remarkably good shape aside from deer damage when it went to the scrap yard.

My whole goal is to wait to get rid of this MachE until it's worth approximately $1.27 on the open market. At that point, I'll purchase the best car I can afford to replace it, and the cycle continues.

 

[ARK]

You’ve already eaten a ton of depreciation. It would be a bad move to sell now if you are afraid of depreciation.

The car is not going to be worth $10,000 when it is 5 years old. The batteries are not going to die on such a short timeline.

In fact, if there was some catastrophic battery failure inside of 8 years of ownership or 100,000 miles on the odometer, Ford will replace the battery.

It seems to me if you are worried about $30,000 value going to $0 and you are at year 3 of ownership, then even if we knew for a fact that this car will die and be worthless at year 8, day 1, there is no chance you can buy a similar vehicle new today and not eat more than $30,000 depreciation over the course of the coming 5 years.

And of course, this is a ‘doomsday scenario’, absolutely nothing indicates the batteries will wear out so soon, you likely can push two decades if you will be fine with 75 miles of range to be honest.

 

[RickMachE]

Ouch. Using this metric, my first year of depreciation cost me well over $4/mile.

My car has depreciated about 40% using Edmunds as a baseline for current value. That's abnormally high by historical standards, but I don't expect it to continue depreciating so quickly. Selling now and buying new again would just set me up for another large depreciation hit.

My hope is that depreciation slows down and at e.g. the 5-7 year mark it will resemble a more typical car value of the same age.

Normally, when computing cost per mile, one doesn't use depreciation in the equation. Unless you're a business, the word "depreciation" isn't regularly used at all.

On a gas car, they take the cost of the gas divided by the miles driven. On the electric car, they take the cost of electricity.

Do you also include the cost of auto insurance in your cost per mile?

I look at the full cost of a car after I have sold it. I take the acquisition cost, plus any improvements I made that I sold with the vehicle, minus the selling price, and then subtract all my maintenance costs, and divide by the years owned. My normal range is $1 - $2k per year. Just sold my 2013 F-150 for $25,000. Paid roughly $33,000, added roughly $2,000 in stuff. $35 - $25 / 10 = $1,000 per year.

 

[Murse-In-Airy]

Vehicles are expensive. They depreciate a lot initially and then depreciation slows. It’s long been known that the best way to maximize your value on a vehicle is to take care of it and keep it as long as possible. Whether it’s a MME, a Honda Accord, or a 67 Fastback.

 

[Monke]

We are in Texas so our situation might be different since we could get free electricity during the weekends or nights. Let's said if someone paid $46k for a Mach E with 8y/100k warranty, the saving on gas for driving around town would be $15k (100k miles, 20mpg, $3/gal, don't judge my estimate). The cost of the car would drop to $31k or $4k per year for 8y span. These are not bad numbers. I don't think MME will die after 8y. I would think a MME would get at least $5k-10k after 8y. A loaded compact car is around $30k without. A compact Japanese car will likely last for 8y without any big issue but it is slow, very noisy, small, cheap feeling, no (fake) leather, AC cold or not cold, small screen, no hand free driving for 3y, and ........ . However it might fetch $10k after 8y. At the end of 8Y and 100k miles owning a MME might be $1k-$6k more expensive than owning a compact car. If a MME can make it to 200k miles with free electricity, it would be cheaper and COOLER to drive a MME.

 

[Avelli]

Not trying to be controversial or raise hysterics here, but the way I look at a car is ultimately what is the cost per mile. In other words, driving costs money, you simply have to accept it. Once you've accepted that driving costs money, you can evaluate what the correct choice is for you. Ignoring the actual operating cost (e.g. the cost of electricity), insurance, etc. to make the analysis simpler, you really have 2 choices when acquiring a car - lease or buy.

If you lease, you end up with a well-known cost per mile based on the lease. You'll only achieve that cost, btw, if you use up the entire set of leased miles. If you drive less than the leased miles, your cost per mile is higher. Say you lease for 45,000 miles (15K/yr for 3 years) and your total lease cost, all in, is $26,500 ($5000 down, $600/mo for 3 years). Your cost per mile at the end of the lease (assuming you use the entire 45K miles) is $0.59 cents. You don't have any trade-in to offset, you simply walk away.

If you buy, you theoretically can continually reduce your cost per mile. If you buy at $60K with some financing, let say you end up paying $65K all in. For simplicity, I'm going to assume you pay the entire amount. Again, assuming 15K miles per year, your cost per mile after 3 years is $1.44/mile, but after 5 years, its down to $0.86/mile, and after 6 years (90K miles) its down to $0.72/mile. All this is assuming that you scrap it for $0 at the end of the driving period. Since that's probably not realistic, whatever you get when you sell the car reduces this cost per mile. So if you drive it for 6 years (90K miles) and sell it for whatever you can get at that point (say $15K), your cost per mile across 90K miles ends up being ~$0.555/mile. However, every mile you continue to drive the car lowers your cost per mile.

The big difference between these 2 approaches is that when your lease is up after 3 years, you have to get another vehicle. There is no way to predict what a vehicle lease will cost 3 years from now, so it might be cheaper to lease again, but it might not. In short, a lease gives you a fixed cost per mile that is almost certainly cheaper at 3 years, but comes with the uncertainty of replacement cost. A purchase gives you the ability to continuously lower your cost/mile, and is most likely more expensive at 3 years, but less expensive at 6 years.

As always, YMMV

Unfortunately, having a leased car in the shop for months at a time skews the leasing calculator

 

[MW1515]

There are very high mileage Teslas out there (probably being driven much more abusively than your MME in regards to miles/day and DC fast charging) that are averaging 300,000 miles between battery pack changes. Assuming you charge at home, you are saving so much money on gas that by the time you get to 300,000 miles, and considering the potential for cheaper battery packs in the future, you'll basically be able to cash in your gas savings for a new battery pack with savings left over. That's how I look at it at least.

 

[superdave80]

If the battery will need to be replaced, and a new battery is going to cost $30,000, then it is so hard to justify outside of loving the car.

If you wind up buying another EV to replace your sold Mach-e, then you will have the exact same issue with replacing the battery in the future.

 

[Mopey]

If you are comparing leasing to purchasing a vehicle, you need to add the cost of financing when computing the true cost of owning a purchased vehicle. Some people pay cash for a $60,000+ vehicle, and a few lucky ones get 0% financing, but most finance and if you want to be accurate don't forget those pesky finance costs.

 

[Jimrpa]

Unless the value of the car ever drops below the cost of a repair, it’s never going to drop to zero. It will always have value of some sort. Regarding the battery, it is impossible to predict whether the cost of replacement will increase or decrease in the future. Likely, if something in the pack fails it will be a single cell, so correcting that would be less expensive than replacing the entire pack.

Is the battery pack designed to be serviced at the cell level in the field? I thought all they could do was swap it?

 

[HuntingPudel]

<SNIP>
Finally, ICE cars will need new engines some day. Transmissions too. That doesn’t mean they have zero value.

Some of us actually like to build engines. Certain ICE cars have more value to us if they have engines that are a little tired.

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