Many people buy Volvos because of their style and safety. And in recent years, Volvo has improved more in designs and even in technology. So, why do Volvos depreciate so quickly?
Volvos depreciate so fast because their repairs are expensive, and parts are hard to come by. Even when you do find the parts, they are costly. The introduction of newer and better models also makes older models lose value.
However, not all Volvo models depreciate quickly, some still retain their worth for a reasonable time.
Reasons for Volvos depreciation
High maintenance costs
There is no doubt that Volvo cars are safe. The newer designs and technology make their brand more sophisticated, yet these same cars lose value over time. If you bought a Volvo S60 for $56,000 five years ago, expect to lose some significant money if you intend to sell it now.
Volvo cars that have been on the road for five years have likely been subjected to some hard conditions leading to wear and tear on the vehicle. This means the car will need repairs and possibly some parts will need to be replaces. Some of these parts are rather expensive and hard to come by.
It might surprise you that many regular mechanics do not know how to handle repairs on Volvos. This will push you to take your car to a certified dealership which will hike repair costs. Many wouldn’t buy a $6,000 Volvo and spend $45,000 on parts and repairs. So even if you see buyers, they will price it cheap.
Distance of parts production
Volvos are produced in Sweden and Belgium, then shipped to different parts of the world. And if someone will have to spend so much to ship a used car to his location, why not go for cars that can be found locally? In the US, for example, some people won’t buy a used Volvo, not because it’s not good, but because the cost of bringing it in is too high.
Say the car is brought in good shape; it will still need servicing after some time. This means parts will also need to be shipped in since they will be difficult to find locally. Volvo parts are naturally expensive, so shipping them in will shoot up the price even more. So, most people prefer to go for cars whose parts are easily accessible and less costly.
Models tagged with a particular fault
Some Volvo models depreciate, but not necessarily because of how long they have been driven. They lose value because they are known for having a particular fault or problem due to a defect from the factory. Any model tagged that way will lose value. Why would anyone want to go for a car that is prone to issues with a catalytic converter?
Some versions of the 2021 XC90, for example, were cited by consumers to have issues with the drivetrain, brake systems, power buttons, and even the body design. Models noted to have these issues may have low demand, causing the price to drop like rocks.
Introduction of newer models
Cars in general (not only Volvos) lose value after some time. Newer and better models creep into the market yearly. So why would someone opt for an older model when newer models promise many new features and technology you won’t find on the former?
This is true especially for people who are crazy about technological improvement and wanting to own the latest cars in town. With this ideology, demands for such cars with outdated technology will decrease. This leads to owners selling at a cheap rate in order to get buyers.
Reliability of the model
The reliability of a particular model goes a long way in affecting the price. Are its components checked and certified to be okay? How does it perform on the road? Does it have a responsive steering feel? Does it corner excellently?
Yes, old cars wear out because of constant usage. So, it’s likely you’ll need to service the car and change parts. But how long will it be before taking the car off the road for repairs? A car with a low-reliability score may experience a decrease in demand, causing the car to depreciate.
As stated earlier, not all Volvo models depreciate so quickly; some still retain their value, at least for some time. However, if a particular model is low in demand, then the resale price will be low. Low demand could be due to many factors, which could be any of those listed above.
Which Volvo model depreciates fastest?
There is no particular order in which Volvos depreciate. Availability and cost of parts, repair costs, and models prone to faults are all culprits. For example, the V60 might be in low demand because of faulty electrical components, while the 2003 XC90 may be low in demand because of premature tire wear.
Both models will depreciate, but which will depreciate faster depends solely on buyers’ demands. For example, you might expect the 2003 XC90 to depreciate because of tire wear. But you will be shocked to know that many people will still go for it. Definitely, not all 2003 XC90s will have that issue.
Which Volvo model retains its value even after being in the market for long?
Volvo’s 2016 models, followed by 2015 and 2017, seem to have retained their values, even after being on the market for so long. This rating considers different factors, such as the model’s original price, current price, cost of maintenance, and remaining years’ expenses (predicted).
CarEdge noted that those years’ models still have about 58% of their life usefulness remaining. Meaning that the cars depreciated by only 42% even after more than five years. From their calculation, a car of that age should normally have depreciated by about 74%.
What is the average cost of a used Volvo?
The cost of a used Volvo depends on several factors. Model, year, miles covered, general health of the car, and demand rate will determine their prices. You will find used Volvos from $5000 to $50,000. But note that other fees come with it.