Stop Pulling the Wagon

Kia Niro Plug-in Hybrid

Our daughter leased a new Kia Niro Plug-in Hybrid some 3+ years ago.  She loved the car.  It was dependable and she only had to put gas in it maybe every 3-5 weeks. She liked it so much that at the end of the lease she seriously considered just purchasing it.

I went with her to the dealership and we were very fortunate in getting a candid and honest representative to handle my daughters business.  When our daughter told the lady that she was interested in now purchasing the vehicle,  the representative told her she could certainly do that but offered her some options worth considering.  First, if she purchased the vehicle on a four year payment plan, at the end of her payments she would have a 7-8 year old Hybrid E.V. and “older” models with 70,000 to 80,000 miles on them are “almost” worthless as the battery packs have a definite lifespan and can cost $20.000 to $30,000 to replace.  This discourages potential buyers for good cause.  If she went ahead and purchased it, the vehicle would have very little value as a trade in at the end of her payment period.  We sincerely appreciated her honesty.  On the other hand she could lease another new one on a three or four year contract with a very attractive lease payment and full warranty for the full lease period.  Our daughter did just that and since she loves the vehicle,  I think she made a wise choice. 

It is important when purchasing a Hybrid or Electric Vehicle to know what the manufactures warranty is on the Battery “Pack”.  For example Kia’s warranty is 10 years or 100,000 miles, whichever comes first.  Tesla has an 8 year or 100,000 to 150,000 mile (depending on model) warranty on the battery.  Other manufactures may vary.  Knowing this will tell you why a high mileage Hybrid or Electric vehicle may have very little or no resale value.  Wanna buy a Kia Hybrid with 99,000 miles on it? Or a 7 year and 10 month old Tesla?  Keep in mind a battery change out is $20.000 to $30,000. 

My daughters Sales Representative’s candor got me to thinking.

We own a 2007 Kia Sorento just like the one pictured above.  It is 17 years old and just last month turned 100,000 miles.  While I was getting it serviced, I mentioned to the Service Manager that it had just turned over the 100,000 mile marker and has been maybe the best car I have ever owned, still drives like the first day we got it and would like nothing more than to keep it.  He told me that it is not unusual for this vehicle to go 200,000 miles or more, has seen them over 250,000 miles, if they are serviced regularly.  The “good news” is that if you had to replace the engine in it at some point it could be done for about $6,000 and then you would be set for another 100,000 miles plus.  

I remember ads for used Toyota’s, Honda’s, others with 125,000 miles on them and still bringing $22,000 or more.  Had an acquaintance of mine once posted on Facebook that their Hyundai Santa Fe had 325,000 miles on it and was still reliable.

From an investment standpoint putting $40,000 to $60,000 into a car that will be just so much scrap metal in 8-10 years is perhaps something to think through.  Also, in many/most areas of the country the now defunct batteries must be handled as “Hazardous Waste”.

 Another consideration is, (here in California), the sales tax alone on a new $40,000 car is over $3,000 and on a $60,000 car is about $5,000.  Ouch!  Somebody please tell me why I would want to make a gift to California of $5,000 in sales tax plus 5 years or more of several hundred dollars a month in payments on a vehicle which will be “scrap” and “hazmat” at the end of the contract.

As an added note I saw on television the other day that the per mile cost between gasoline and recharging your electric vehicle is now just about even.  Also, some states, like California, are considering imposing a per mile tax on electric vehicles because of the “lost” gasoline tax revenue they have grown to depend on.  

No intended judgement here.  Everybody has to do as they think best.  Just some information to think about as you consider your next vehicle purchase.

Bob Bandy  –  September 2024