Does Model Y Hold Value Better Than Other Electric SUVs?
Electric vehicles as a category have become more competitive on value. Rather than comparing specific models, look at how EVs perform against gas SUVs overall.
The Real Picture on EV Depreciation
Electric vehicles recently recorded the largest cost improvement of any vehicle category. EV ownership costs dropped 16% from a peak of 84.69 cents per mile down to about 71.21 cents per mile. This improvement makes EVs increasingly competitive with gas SUVs on total ownership cost.
Here's what matters for value:
- Depreciation is just one part of ownership cost
- EVs cost about $2,300 more per year than small sedans upfront
- Over a 7 to 15-year ownership period, EV owners save $7,000 to $11,000 total through fuel savings, reduced maintenance, and tax credits
- Federal tax credits worth up to $7,500 on many EV models significantly impact real value
Why Total Cost Beats Depreciation Alone
Focusing only on depreciation misses the full picture. An electric SUV might lose value faster than a comparable gas SUV, but you'll spend way less on fuel and maintenance.
Breakdown of typical annual ownership costs:
| Cost Category | Impact |
|---|---|
| Depreciation | Largest single expense |
| Fuel/Charging | $2,000 annually for gas vehicles |
| Maintenance | EVs need significantly less |
| Insurance | Varies by model |
The average new vehicle loses money through depreciation, averaging $4,334 per year. But if an EV's lower fuel and maintenance costs offset faster depreciation, you still come out ahead financially.
How to Compare Value
Instead of asking which model holds value best, calculate your five-year total ownership cost. Include:
- Purchase price minus any tax credits
- Financing costs if taking a loan
- Annual fuel or charging costs
- Expected maintenance expenses
- Insurance premiums
- Estimated resale value
Many owners find that keeping a vehicle longer beats buying new frequently. With real costs down roughly 10% from 2023 peaks, maintaining a paid-off vehicle often costs $1,500 to $2,000 yearly. That's far less than the $10,000 or more in annual payments and depreciation on a new vehicle.
The Bottom Line
Stop thinking about which model holds value best. Think about your total spending over the years you'll own the vehicle. Run the real numbers before deciding. An EV might be the smarter financial choice even if it depreciates faster, because you'll spend considerably less on fuel and repairs.