It’s common knowledge that within the first five years of ownership, the average new car loses more than 50% of its value. Nevertheless, a thorough investigation by Brauer shows that some cars resist this pattern and lose value more slowly.
To determine which automobile models lose the least and most value over a five-year period, iSeeCars.com undertook a comprehensive analysis that involved looking at over 8.2 million car sales. The findings suggest that premium cars see the highest rate of depreciation, while trucks, SUVs with a truck foundation, and sports cars generally hold their value better.
According to Brauer, it is financially wise to choose a car model that depreciate less in value, especially if you plan to sell it within the first five years of ownership. The biggest “cost” connected to car ownership is depreciation, by far.
The four-door Jeep Wrangler Unlimited model stands out among the results as having the lowest five-year depreciation rate. LA City Cars has currently 2 available. The ongoing popularity, dependability, and all-weather performance of Jeep Wranglers have led to their exceptional value retention, which is well acknowledged. Due to their classic designs, even older versions are still in demand.
2018 Jeep Wrangler JK Unlimited Sahara
Conversely, the most notable depreciation is experienced by the BMW 7 Series, with an average five-year rate of 72.6%.
The primary finding of the study is how important automobile depreciation is to consumers’ decision-making when purchasing new or used cars. It emphasizes how crucial it is to comprehend the depreciation rate in order to make wiser decisions.
Toyota trucks do exceptionally well, as evidenced by the study, which places the Tacoma and Tundra in second and fifth place, respectively, for the lowest depreciation rates. The demand and value retention of these trucks are largely attributed to Toyota’s reputation for dependability and quality. LA City Cars have 1 Toyota Tundra available.
Sports vehicles also seem to be resilient; Porsche, Dodge Challenger, and Subaru WRX all hold top spots. The Porsche 911’s premium pricing stems from its scarcity in the used car market. This adds to its desirability. LA City Cars has several Porsche available.
2020 Porsche Cayenne Base
The Dodge Challenger is incredibly popular because of its iconic design, strong performance, and timeless appeal.
2016 Dodge Challenger SXT
2022 Dodge Challenger R/T Shaker Plu
2022 Dodge Challenger R/T Shaker Plus
The midsize SUV Toyota 4Runner, with a five-year depreciation rate of 38.5%, takes sixth place. Its truck-based design, long-standing appeal, and Toyota’s dependable reputation all contribute to its value preservation.
On the other hand, the analysis finds which cars depreciate the fastest, and luxury sedans top the list. The first to depreciate by a significant 72.6% after five years is the BMW 7 Series. The reason for this sharp depreciation is that expensive equipment and technologies that used car purchasers might not find as valuable are included.
Brauer points out that expensive vehicles are often rented, which results in an excess of off-lease models and a decline in demand for older models. Sedans’ declining popularity also means that aggressive pricing is necessary to keep them attractive in the secondary market.
The government incentives that lower the effective post-incentive sticker price cause the Nissan LEAF, which ranks second in terms of depreciation, to lose significant value. Their quick obsolescence is also exacerbated by the quick advances in battery and range technologies for electric vehicles.
Brauer also makes the point that government subsidies have a big influence on how much electric cars can be sold for at auction. The significant depreciation of the Nissan LEAF is mostly due to its lower effective post-incentive sticker price. In addition, the speedy advancement of battery and range technology renders electric vehicles obsolete very soon.
Due in part to the high cost of ownership and repairs associated with BMW vehicles, the BMW X3 SUV, which ranks ninth for depreciation, is affected.
The Mitsubishi Mirage has the highest depreciation rate, while the Honda Fit has the lowest, according to the study’s further analysis of depreciation data for automobiles under $25,000. Additionally, it classifies depreciation patterns for cars under $35,000 and under $50,000. Over a five-year period, the Volvo S60 has the highest average depreciation of any car under $50,000, depreciating by 67.8%.
The study concludes by highlighting how important it is to take long-term needs into account when buying a car. Choosing a car that appreciates in value can be a wise financial decision, especially if you want to sell or trade it in within a few years. On the other hand, buyers of used cars may save a lot of money by selecting a car that has already seen severe depreciation.