By Scott Baker (CarEdge.com) | Published on May 29th, 2020 | Last Updated on
By Scott Baker (CarEdge.com)
Published on May 29th, 2020. Last Updated on .
When consumers buy hybrid or electric cars, they typically do so with a greater purpose. Either they wish to help the planet by limiting the burning of fossil fuels and reducing emissions, or they are early adopters of new technologies and want to try that which is new and shiny, or they simply want to save money by limiting their trips to the gas pump. These consumers tend to be more affluent, more highly educated, and lean towards being “green” or progressive - most also drive their cars like wearing a badge of honor, suggesting “I am doing my part to save the planet”.
Are they Worth it?
What virtually everyone wants to know, however, is whether or not they receive a good return on their hybrid/electric investment, and if the higher purchase price is justified by lower fuel costs over their ownership period. This question has been asked by, and answered by, millions, and we will not attempt to do so yet again. Instead, we will focus on what the car is worth when you sell it - what do you get for a trade-in allowance. Is it worth saving $500 per year on fuel, if your car loses half of its value in three years? Or, do hybrid/electric drivers save on fuel, and also get more for their vehicles when they’re traded in or sold privately?
The Method and Key Takeaway
CarEdge.com has calculated the annual depreciation of 193 car models through at least five years of ownership, and can tell you with little question, which cars have historically been relatively good investments, and which ones have been underperformers. For this article, we will focus on 2015 model-year hybrids and electrics - comparing what they sold for new, versus what they’re worth today. Of the 193 models tracked by caredge.com, we looked at 12 of the more popular hybrids and electrics, to see how they fared with respect to holding their value, relative to their fossil fuel cousins. The bottom line is that results are all over the map, and hybrids/electrics ranked as high as 12th within all (193 models) of the 2015 models tracked, but also as low as 191st, with the remaining ten scattered all throughout the rankings.
Let’s Start with the Worst
Let’s start with the bad news (for hybrid/electric owners) first, and tell you about the worst performing hybrid/electrics out there for maintaining their value. The Ford Fusion Energi (ranked 191st), which originally sold on average for $36,000, is now worth 1/3 that amount, or a little over $12,000. Over the five-year period, this vehicle’s value has fallen by almost $5,000 per year, significantly exceeding any monies that would have been saved by purchasing less gas, even when compared to the depreciation of other fossil fuel-burning cars. Even if the Energi ran on water, and fuel cost you nothing, you’d still come out on the losing end of this purchase. When it comes to resale, unlike the Energizer Bunny, the Energi has lost its mojo. Coming in at a close second (2nd worst) for value retention of hybrids/electrics, is the Nissan Leaf electric. The Leaf originally sold on average for $30,000, and is now worth less than $11,000, a 65% decrease in value over 5 years - clearly the Leaf has fallen far from the value tree, and foliage has turned into spoilage. Clearly, for these two, unless you’re driving 50,000 miles per year, there’s no way that fuel savings are turning this investment into a good one. You may have been an early-mover buying a Leaf or Energi, but it turned out to be a big mistake - at least financially. Rounding out the remaining sub-par performers, are the Ford Fusion Hybrid (131st), Toyota Avalon Hybrid (110th), and Lexus RX450h (89th). None have done a very good job with respect to holding their value, but perhaps if you put on enough miles, the fuel savings may offset the big bucks you lost through depreciation.
Onto the Better Performers
On the other end of the extreme, are some hybrids/electrics that have proven to be relatively good purchases, irrespective of whether they save the planet, or fuel costs. At the top of the hybrid/electric list, placing 12th of all 193 models, is the Toyota Highlander Hybrid. This mainstay SUV from Toyota originally sold for roughly $47,000, and is still worth almost $29,000 today, holding over 60% of its value since new. The Highlander Hybrid ranks well - both for hybrids, but also for all vehicle models. Given the attractive value retention, and your ability to pass by gas stations without hesitation, the Highlander is one solid investment. Of special note, the gas-powered Highlander ranks four notches lower on value retention, so it would appear that the hybrid saved you fuel costs, and is worth a touch more, even five years after purchase.
Running a distant second/third to the Highlander, are the Honda Fit (29th) and Toyota Camry Hybrid (30th), who both retain close to 55% of their value, versus an average of 47% of all 193 models tracked through 5 years. In both cases, the Fit and the Camry Hybrid offer exceptional value retention, and you’re able to feel good about saving on fuel costs, and saving the planet.
What about Tesla?
No article about hybrids or electric cars would be complete without a commentary on Tesla. With such, we will tell you that the Tesla Model S - the only Tesla qualifying for 5-year results - ranks 75th overall, and 6th of the 12 hybrid/electrics that we researched. The Model S, which cost roughly $92,000 when purchased in 2015, is today worth exactly half, at $46,000. Again, this 50% year-5 value retention still beats our overall average of 47%, but not by much. Losing $46,000 of value is never fun, regardless of what you drive (unless you drive a Ferrari, and then it’s a bargain), but that was the cost of being an early-adopter five years ago. Our take is that Tesla deserves credit for producing a fully-electric car, and still having it be worth something meaningful with its technology 5 years old, and after you’ve put some significant miles on it.
Our Not-So-Dirty Dozen Rankings
| Overall Rank (of 193 models) | Make | Model | Retained Value |
| 12th | Toyota | Highlander Hybrid | 60.4% |
| 29th | Honda | Fit | 54.9% |
| 30th | Toyota | Camry Hybrid | 54.8% |
| 60th | Toyota | Prius | 50.6% |
| 61st | Lexus | ES 300h | 50.6% |
| 75th | Tesla | Model S | 49.4% |
| 78th | Honda | Accord Hybrid | 49.1% |
| 89th | Lexus | RX 450h | 48.2% |
| Overall Average | 47.0% | ||
| 110th | Toyota | Avalon Hybrid | 45.9% |
| 131st | Ford | Fusion Hybrid | 44.1% |
| 187th | Nissan | LEAF | 34.7% |
| 191st | Ford | Fusion Energi | 33.9% |
Bottom Line
Our bottom line on whether hybrids and electric cars provide good resale value, is an earth-shattering, “it depends”. Some models, such as the Highlander, Fit and Camry Hybrid have done extremely well in limiting depreciation, and have saved you fuel costs through the years. On the other hand, The Nissan Leaf and Ford Fusion Energi have few rivals when it comes to losing a majority of their value so quickly. Tesla, given their quest to lower the price of their new models, is likely to fare well in the coming years with their latest models, even if gas falls to $.99 per gallon. They seem to have cracked the code, and they are the EV company for others to emulate. The smart shopper, however, will do their homework, see what has worked in the past, and learn more about what causes some models to perform well in the aftermarket, and why failures occur. You won’t have a crystal ball, but this internet thing sure is handy.
Find Out More
Research depreciation rates for almost 200 models over their entire lives, by visiting www.caredge.com/ranks to see how your car or truck does versus all the rest. Good luck, and happy motoring.
FAQs
Do hybrid cars have less resale value? ›
The lower quality and life expectancy of batteries in older models of electric vehicles make them harder to sell. In fact, the average resale value of these older EVs and hybrids is less than 40 percent of the original value.
Do electric cars have a good resale value? ›Do electric cars have good resale value? Electric cars generally don't hold their value very well and tend to depreciate faster than their gas-powered counterparts. Over a 3 year period, EVs usually depreciate to 52% of their original value.
What are 3 drawbacks of a hybrid electric vehicle? ›- High Voltage system repair costs may be more expensive. ...
- They may have a higher upfront cost. ...
- They may have less power when compared to standard ICE vehicles.
Since hybrids have both regenerative batteries and a fuel engine, both are used proportionally less — meaning both are likely to last longer. Roughly speaking, though, hybrid car drivers can expect to drive their car from anything between 5 and 15 years if suitable maintenance is carried out on them.
What is the big drawback of hybrid cars? ›Poor handling: Hybrids have more machinery than conventional cars, which adds extra weight and reduces fuel efficiency. So, hybrid car manufacturers have had to make smaller engines and batteries to cut down on weight. But this results in reduced power for the vehicle and support in the body and suspension.
What is life expectancy of electric car? ›How long do batteries last in electric cars? According to current industry expectations, EV batteries are projected to last between 100,000 and 200,000 miles, or about 15 to 20 years.
What are the disadvantages of buying an electric car? ›- Finding a Charging station - EV charging stations are fewer and further between than gas stations.
- Charging takes longer.
- The driving range on a full charge.
- Higher Initial Purchase Cost.
- Replacing the Batteries is Expensive.
If an EV is in your price range, and range isn't going to be a problem based on typical journeys, getting an electric car is a great idea. Not only is it cheaper to run, but it's also eco-friendly, usually nippy – and a way to futureproof your transport solution for years to come.
What is the biggest drawback of an electric car? ›- Their batteries need rare metals. ...
- Making electric cars creates more emissions. ...
- They are only as green as their power sources. ...
- Electric cars can be expensive to buy. ...
- You can't drive as far in an electric car. ...
- There aren't enough charging points.
Some of the drawbacks to owning a hybrid car include: Higher upfront costs. Maintenance can be expensive (when it's needed) They still produce fossil fuel emissions.
Are hybrid cars worth buying? ›
Are hybrids worth it? If using considerably less fuel and creating fewer emissions are important to you, then definitely. Hybrids are usually more affordable than full electric cars, and often more responsive to drive than their petrol-only equivalents.
Is it better to have an all electric car or a hybrid? ›Summary. When all the factors are taken together—purchase price, range, refueling costs, maintenance and experience—EVs are simply a better investment. Their net emissions are lower, they require less maintenance, they actually cost less over the lifetime of the vehicle, and they're just more fun to drive.
Which is better fully electric or hybrid car? ›The primary benefit is range. While an electric vehicle can only travel as far as its batteries allow, plug-in hybrids also have a gasoline engine and an electric powertrain. The result is that plug-in drivers get the best of both worlds.
How much does it cost to replace hybrid battery? ›How much does a hybrid battery cost? Generally, a hybrid battery replacement cost can range from $2,000 to $8,000. The price can ultimately vary depending on the %%di_make%% model or even the service center.
Are hybrid cars worth it for long distance driving? ›Can a Hybrid Handle Long Distance Trips? Your hybrid can certainly handle long distance trips efficiently. However, there are some things to keep in mind. A hybrid operates more efficiently when kept under 50 miles per hour.
How long do hybrid car batteries last? ›Hybrid Battery Life Expectancy
Most hybrid batteries should take drivers about 100,000 miles. With excellent maintenance, some owners are able to push this number to 200,000. Warranties typically extend to about the 100,000-mile mark, so manufacturers do expect this to be the upper limit on battery life.
If your hybrid car won't start because your hybrid battery dies, you cannot drive the car anymore. You would have to replace the battery in order to keep driving the vehicle, even if it's a hybrid and it still has gasoline.
Why do people not like hybrid cars? ›The first obstacle anyone interested in buying a gasoline-electric hybrid vehicle will run up against is the higher cost of the hybrid powertrain versus its gasoline-only equivalent. Hybrid versions generally run several thousand dollars more than conventional versions of the same car.
Is hybrid expensive to repair? ›The good news is that it costs no more to maintain a hybrid car than a non-electric vehicle. There are some things you should be aware of, however. Our service teams want to help keep your car running in top shape, so we've put together the helpful information below.
Is it better to buy a hybrid or gas car? ›Hybrid cars are typically more fuel-efficient than their gas counterparts since they can switch between their gas and electric motors while being driven. The key reasons to consider buying a hybrid car are to save on gas and help reduce emissions while still getting the range capabilities of a gas car.
Do electric cars cost more to insure? ›
Generally, electric cars are more costly to insure than conventional vehicles. Because electric vehicles are pricier to both buy and repair, insurance providers charge their drivers more for coverage. That said, the savings you earn on gas and tax incentives might more than make up for your policy's extra cost.
Are public charging stations free? ›Charging at public locations: Public chargepoints at supermarkets or car parks can be free to use for the duration of your stay.
What is the cost to replace an electric car battery? ›Replacing an electric car battery will cost between $4,000-$20,000, but there are some cheaper options. Whitney Vandiver writes for NerdWallet about ways car owners can save money on ownership and maintenance.
Why are people against electric cars? ›The most common reasons drivers avoid EVs include fear the battery will run out of charge before reaching their destination, also known as “range anxiety,” fear of too few charging stations, long charge times, and initial higher upfront vehicle costs.
Do electric cars wear out tires faster? ›The tires of electric vehicles wear 20% faster than those of internal combustion engines, which is due to the acceleration of electric vehicles that generate strong instantaneous power.
Will electric cars decrease in value? ›Electric cars and depreciation
The simple fact of that matter is that modern EVs hold their value far better, depreciating a lot less than modern petrol or diesel cars. On average, electric cars depreciate by up to 50% of their original value, after three years and 36,000 miles of driving.
The cost for joining the electric car revolution is less now than ever before. Chevrolet, Hyundai, and Nissan lowered prices on their entry-level models, and now Tesla has cut its prices by $3,000 to $19,000 across its model line.
Will electric car prices come down in future? ›With major carmakers setting up EV and EV battery production units in India, we are hopeful that the price gap between EVs and ICE vehicles will continue to grow smaller in the coming years.
What are the main faults with electric cars? ›Battery issues, climate control, and in-car electronics are among the biggest problems in electric vehicles.
What is the major problem with using electric vehicles? ›EV owners have experienced chronic problems with the display screens, exterior door lights, failing temperature sensors, mismatched paint, and seals and weatherstripping. It's not just that these problems occur, but that they occur at a higher rate than with conventional vehicles.
Do electric cars pay for themselves? ›
The longer you drive it, the more time your EV has to lower your total cost of ownership. Even so, a $60,000+ Model Y might never break even with a $20,000 Toyota Corolla. However, some EVs make up for their price premiums by being cheaper to drive. In that way, electric cars can pay for themselves.
Will car prices go down in 2023? ›Prices could drop up 5% for new vehicles and 10% to 20% for used vehicles in 2023, according to a report in November from J.P. Morgan. The basis for the prediction is that demand has stabilized and vehicle inventory is improving.
Are hybrid more expensive to maintain than electric cars? ›Because hybrids can rely on their electric motor to ease the strain on their combustion engine, they may not cost as much to maintain as traditional ICEs, but they will still end up costing more to maintain than an electric vehicle.
Whats cheaper to run hybrid or electric? ›Costs of Running an Electric Car
That fact alone can tell us that EVs are much cheaper to run than hybrid and combustion engine cars, which both need fuel. Electric cars do need to get plugged in regularly to have power stored in their batteries. The electricity cost is much lower than topping up at a fuel station.
Plug-in hybrid electric cars offer both gas-only and electric-only driving—even at relatively high speeds.
Are electric cars the future? ›Ready to charge into the future? The market for electric vehicles (EVs) has grown rapidly in recent years and is expected to continue to grow at a fast pace over the coming decade. Electric car sales in the United States increased from a mere 0.2 percent of total car sales in 2011 to 4.6 percent in 2021.
Why would someone want to buy a hybrid car? ›Hybrid Vehicle Benefits
Higher mpg: Most hybrid SUVs get more than 35 mpg and most hybrid sedans get more than 45 mpg. That's about a 40 percent improvement over non-hybrids, on average. Easy to use: Unlike a pure electric vehicle, you don't have to plug in a hybrid. Simply refuel at any gas station.
Do Plug-In Hybrids Need to Be Plugged In? No. Plug-in hybrids can be charged to run on mostly electric power usually for the first 25 to 50 miles before they revert to regular hybrid operation, but they will still operate even if they are never plugged in.
How much is a Tesla battery? ›How much does a Tesla battery cost at a Tesla service center? Replacing a 75 kWh battery for Model 3 costs around $16,550. However, battery costs could change depending on your car's model. Remanufactured packs cost between $9,000-$10,000, but brand-new batteries might cost up to $22,500.
How much is a Toyota hybrid battery cost? ›Hybrid battery replacement costs can vary anywhere from $2,000 to $8,000,although this price can vary depending on your Toyota model and even the service center.
Can a hybrid battery last 20 years? ›
Unfortunately, hybrid car batteries don't last forever. Most hybrid vehicles will either need to get a new battery or get repaired within six to 10 years of their original purchase. Worst of all, hybrid battery repair can cost up to $4,000 on average.
Do hybrid cars have better resale? ›Hybrid Myth #5 - The resale value is low
Of course, this still depends on how it was maintained and driven. Compared to a petrol or diesel car, they definitely don't lose more value over the years or as kilometres go up. There is a good reason why hybrids are the vehicle of choice for taxi and ride-share drivers.
While you can't entirely stop a hybrid car from depreciating in value, some of them lose it faster than others. Factors like the condition of the vehicle and current mileage also impact value, regardless of the make and model.
Are hybrid cars worth buying now? ›Are hybrids worth it? If using considerably less fuel and creating fewer emissions are important to you, then definitely. Hybrids are usually more affordable than full electric cars, and often more responsive to drive than their petrol-only equivalents.
Which hybrid car has the best resale value? ›In 2021 Kelley Blue Book claimed that the Toyota RAV4 Hybrid had the best resale value out of all hybrid vehicles. The Toyota RAV4 Hybrid SUV has the best resale value out of all hybrid SUVs because it retains the most value over time.
How much does it cost to replace a hybrid battery? ›How much does a hybrid battery cost? Generally, a hybrid battery replacement cost can range from $2,000 to $8,000. The price can ultimately vary depending on the %%di_make%% model or even the service center.
Are hybrid cars expensive to repair? ›So, are hybrid cars high maintenance? No. The only “extra” hybrid car maintenance cost would be replacing the hybrid battery, which can cost upwards of $2,000. However, most manufacturers will warranty the hybrid battery for 8 to 10 years or for at least 100,000 miles.
Is hybrid better than electric? ›The primary benefit is range. While an electric vehicle can only travel as far as its batteries allow, plug-in hybrids also have a gasoline engine and an electric powertrain. The result is that plug-in drivers get the best of both worlds.
What are the pros and cons of buying a hybrid car? ›While hybrid cars may be more expensive than their traditional counterparts, they are becoming increasingly more affordable while also offering better fuel efficiency and reduced emissions. Additionally, they come with several other advantages such as tax credits, longer warranties, and lower maintenance costs.
Should I get hybrid or gas? ›Hybrid cars are typically more fuel-efficient than their gas counterparts since they can switch between their gas and electric motors while being driven. The key reasons to consider buying a hybrid car are to save on gas and help reduce emissions while still getting the range capabilities of a gas car.