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Burning Money: Vehicles That Depreciate The Fastest, and Those That Hold Onto Their Values Best

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Depreciation, or the degree to which a given vehicle’s value will drop over time, is a motorist’s biggest ongoing expense. Depreciation now accounts for an average 36 percent of annual ownership costs according to the AAA

Kelley Blue Book says the estimated average transaction price for a light-duty vehicle in the U.S. now stands at $38,259. The average vehicle drops 49.6 of its original value after five years, which translates into nearly a $19,000 loss. And at that, the more expensive the vehicle, the more important this critical ownership cost becomes over time, simply because there’s more money at stake to lose. A five percent difference in depreciation over five years between competing $70,000 cars would represent a $3,500 return at trade-in time, assuming both cars are kept in good condition with average mileage.

An astute new-vehicle shopper would be well served to choose a model that’s predicted to hold its value better than will other cars and trucks in its class, which is ultimately based on a variety of variables, including economic factors, historical data, and plain old supply and demand issues.

What’s more, depreciation should be of major consequence to those who lease a new car or truck instead of purchasing one outright. That’s because monthly payments are largely based on the difference between a vehicle’s transaction price and what it’s predicted to be worth at the end of the term, financed at a set interest rate.

Perhaps not surprisingly, with U.S. car buyers’ seismic shift away from passenger cars, the trucks and sport-utility vehicles they now adore hold their values the most tenaciously among all automotive segments. That’s according to a recent study of over 7.7 million vehicle transactions conducted by the auto research website iSeeCars.com.

Pickups and SUVs account for seven out of 10 slots in the website’s list of vehicles that enjoy the slowest rate of depreciation. The best-performing models for value retention will lose 19.4 to 39.5 percent of their original worth after five years. The top two models in this regard are the Jeep Wrangler and the four-door Wrangler Unlimited, which historically have low rates of depreciation. “Jeep Wranglers are known for retaining their value for reasons including their ruggedness, durability, and iconic design,” says iSeeCars CEO Phong Ly  “Because of Jeep’s loyal following, their demand outstrips supply in the used car marketplace leading to high resale values.”  

Meanwhile the models that drop in value the most precipitously, according to iSeeCars.com, are expensive luxury sedans, and electrified cars. “Luxury cars have steep depreciation because owners likely trade them in when they become outdated and used car buyers don’t want to pay a high premium on a dated model,” explains Ly. “Previous government incentives contribute to the steep depreciation of electric and plug-in hybrid vehicles [while] outdated technology also contributes to their dramatic depreciation.” The worst offender on this list is the upscale and sporty Maserati Quattroporte sedan. It loses an average of 72.2 percent of its original worth after half a decade, which comes to a staggering $95,393 lost in the wind.

We’re featuring the website’s lists of the vehicles having the highest and lowest five-year depreciation rates below.

As one might imagine, some of the most popular SUVs and crossovers, including the Honda CR-V, Subaru Outback, and the Toyota 4Runner, Highlander, and RAV4, are above average at retaining their values. Likewise with the upscale Mercedes-Benz G-Class and the Toyota Land Cruiser. But not all SUVs fare as well here. The examples that drop their original values the quickest are again luxury models, including the Lincoln MKT and Navigator, the, GMC Yukon XL, the Infiniti QX60, and the BMW X1, X3, and X6. “Luxury SUVs tend to have steep depreciation because of their high starting prices, which have to come down significantly to attract buyers in the secondary marketplace,” Ly notes.

Among brands, the nameplates that tend to hold onto their values the best over a five-year period are (in order) Toyota, Ram, Jeep, Honda, and Porsche. “Toyotas have a strong reputation for reliability and longevity, and their high resale values reflect that,” says Ly.” The automaker suffering the highest five-year depreciation is Maserati, at an average 66.4 percent, which is 33.8 percent higher than average among all brands.

You can read the full report here.

Top 10 Vehicles Having The Lowest Five-Year Depreciation:

  1. Jeep Wrangler (off-road SUV): 30 percent
  2. Jeep Wrangler Unlimited (off-road SUV): 31.5 percent
  3. Toyota Tacoma (midsize pickup): 32.0 percent
  4. Toyota Tundra (full-size pickup): 35.9 percent
  5. Toyota 4Runner (midsize truck-based SUV): 36.5 percent
  6. Porsche 911 (sports car): 37.2 percent
  7. Honda Ridgeline (midsize pickup): 38.1 percent
  8. Nissan GT-R (sports car): 39.4 percent
  9. Nissan Frontier (midsize pickup): 39.5 percent
  10. Subaru WRX (sports car): 40.0 percent

Top 10 Vehicles Having The Highest Five-Year Depreciation:

  1. Maserati Quattroporte (luxury car): 72.2 percent
  2. BMW 7 Series (luxury car): 71.3 percent
  3. Nissan Leaf (electric car): 71.0 percent
  4. BMW i3 (electric car): 70.9 percent
  5. BMW 5 Series (luxury car): 69.2 percent
  6. Acura RLX (luxury car): 69.2 percent
  7. Ford Fusion Energi (plug-in hybrid): 69.1 percent
  8. BMW 6 Series (luxury car): 69.0 percent
  9. Jaguar XJL (luxury car): 68.9 percent
  10. Chevrolet Volt (range-extending electric car): 68.1 percent

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