ugh, Such Depressing Depreciation :-/

Discussion in 'Hyundai Kona Electric' started by DelRider, Aug 4, 2021.

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  1. DelRider

    DelRider Member

    I got a come-on email from the dealer. The usual, 'Your car is in hot demand, come in today and walk out with a new 2020 Kona Electric for only $7 more per month, all taxes/titles included!' For one thing, a 2019 to 2020 is nothing worth moving on and for another, they didn't even have a 2020 model in stock (a requirement stated in the offer), although they do have some 2021 Ultimates on the lot. So I ignored. I got a hard copy offer in the mail and then another email asking if I had seen the other outreach efforts. Fine, I got in touch:
    "Do you guys even read these mailers? What am I missing? Hypothetically, since you have this urgent need for 2019 Limiteds, what can you do for me towards a similar in Ultimate trim?'.
    Turns out they do NOT read these mailers and the answer was more depressing than I thought. Note, I'm not planning on selling (yet), so no impact. But it is depressing none-the-less.
    Turns out there was nothing worth considering, mostly because based on Kelly Blue Book (KBB) the payoff was so high. That, and the dealer had the audacity to mention "Well, you know, 30,000 miles in two years IS high." What the ever-loving ef? It's a battery EV, not an ICE. I got it so I COULD put miles on it and not worry about typical mileage related wear. What, the piston rings in my traction motor are going to have oiling or hardness issues? From a dealer selling these things, these are just such out of touch talking points. But I digress.
    Here is the KBB break down. I compared to a Limited FWD ICE Kona using KBB and online prices. Obviously, situations will be different, but the larger message is the same:

    2019 Hyundai Kona Limited FWD 4D - $21,600 (high trade)
    2019 Hyundai Kona Limited FWD 4D - $26,600 (high MSRP)
    Percent Decline [(MSRP-Trade)/MSRP] = 19%

    2019 Hyundai Kona Electric Limited 4D - $23,900 (high trade)
    2019 Hyundai Kona Electric Limited 4D - $41,400 (high MSRP)
    Percent Decline [(MSRP-Trade)/MSRP] = 43%

    Difference to make 19% = $7,870
    That is, $41,400 - $7,870 = $33,500 (adjusted trade value for 19%, almost $10K difference!)

    That a Hyundai dealer who sells Electrics and is commissioning unread sales pitches would throw KBB back in my face is a bit of a slap. Not to mention, they might also want to factor in the cost of the battery that they owe me (but I get it, different pots of money: dealer vs mothership).

    That $7,800 looks suspiciously like the federal tax credit. Only problem is that it is not cash in pocket that you could use to get your loan closer to not being upside down. You may not get any tax credit if you do not have the tax liability and it is UP TO $7,500, so it may be less or 0. I would hope that the manufactures are not using that to inflate the cost of their vehicles leaving the buyers on the back end to deal with it.

    So, no real point here other than a depressing realization. Anyone looking to finance the bleeding edge, don't forget your gap insurance! With depreciation like this, a small hit could effectively leave you with no money to repair! Or better yet, buy used and save more than that slippery tax credit would offer anyway. You'll be further ahead, IMHO. But as always, YMMV.
     
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  3. livingthecadream

    livingthecadream New Member

    Depreciation is most likely from the ongoing LG battery issues. I think that some owners may have gotten a settlement in a class action because of it.
     
  4. XtsKonaTrooper

    XtsKonaTrooper Active Member

    Yes, the depreciation is insane because of this battery issue.
    I've rethought selling it or trading it, as I would basically be throwing 10,000CDN away.
    I will get my best for the buck utilizing the 8yr/160,00km battery warranty as right now I'm not too confident about the whole battery issues and will wait to see how the car performs with the new brand battery and if any further issues crop up.
    But I am looking forward to getting my new BMW i4 next spring.
     
    apu and livingthecadream like this.
  5. The depreciation is crazy bad, before the recall Tesla offered 26K on my 2020 preferred. Just checked Canadian black book it claims wholesale should be around a low of 26K and high of 29K. That's a 42% depreciation on a car less than 2 years old and exclusive of any rebates/incentives. Under current recall my car is worth nothing to any dealer outside of Hyundai.
     
    XtsKonaTrooper likes this.
  6. XtsKonaTrooper

    XtsKonaTrooper Active Member

    I seen a 2019 ultimate ev at a Hyundai dealer , they wanted 36k with 41,000km on the odometer. One trade in quote I got was 28k , and it could be less cuz they had too look at it. That's over 50% drop.
     
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  8. ENirogus

    ENirogus Active Member

    The other thing is that remember you are competing with new cars that get the gov't kickback of 7500 plus state incentives.
    So while MSRP might be 41 grand, you are only paying 34k or less for a new one.

    Also unpopular or useless options[premium paint for example] cost more new but do not add a dime to trade in
     
  9. Yeah its a little more inconsistent and weirder here in Canada. A 45K preferred Kona EV (kinda like a limited + in the US) will generally have very little budge on the MSRP(unlike in the US) and at minimum a direct federal 5K rebate. A couple of provinces have up 8K in additional incentives, most others(mine included) have zero additional incentives. Generally the 5K federal incentive will cover the 12+% in sales taxes on the vehicle. So at minimum the federal incentive only covers your sales tax, if you happen to live in BC or Quebec your best case scenario would be an additional incentive of around 17% off. The deprecation and actual dollar loss is still pretty significant even for those folks and a 42% loss is very real for folks in the rest of Canada.
     
    ENirogus and XtsKonaTrooper like this.
  10. That's why I bought mine with the intention of keeping it a long time. I have the Ultimate and it checked all the boxes (incl long range), so should do me for quite a while. And when I get my new battery (later is better) it will effectively set the odometer back to zero, as most other major components in an EV wear slower and cost less for maintenance.

    But if the used price is so low now, could be a great buy for someone, esp with that new replacement battery.
     
    electriceddy likes this.

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