Anytime you go shopping for a new set of wheels, regardless of
car brand, it is wise to consider how much the car will depreciate or lose value over time. Otherwise, you might face losing thousands of dollars the next time you trade in.
With that in mind, we take a look at which cars retain their value the most and which ones hold their value the least.
The Jeep Wrangler fares the best when it comes to car depreciation
Everything seems to be going right for
Jeep Wranglerowners. Not only do they own one of the coolest cars available, but Wranglers also retain their value better than any other make and model.
They found that Wranglers best retained their value. A five-year-old Wrangler, on average, only lost about 9.2% of its value. When you consider that the average 2016 vehicle depreciated 40% over five years, this is a pretty incredible statistic.
The Jeep Wrangler Unlimited came in second with 10.5%, followed by the Porsche 911 with 12.8%%. The Toyota Tacoma topped the list for trucks at just 13.8%.
Overall, sports cars, trucks, and truck-based SUVs depreciate the least, according to iSeeCars.
These cars depreciate the most
On the other end of the spectrum is the Nissan Leaf, which lost an average of about 65% of its MSRP value after five years.
This might seem unexpected, but there is a reasonable explanation for its depreciation.
One leading theory discussed by iSeeCars is that pioneering
EV technologytends to depreciate very quickly as battery life and range improve. As EV technology makes rapid improvements and becomes more affordable, older models become far less desirable.
The BMW i3, another older EV, was likely impacted by the same factor, compounded by a “lack of popularity” and “high price tag,” according to iSeeCars. It lost about 63% of its value over five years.
In fact, BMW performed quite poorly overall in terms of car depreciation. The German automaker has four other models that appear among the top ten list. These include two sedans: the BMW 7 Series (61.5%) and BMW 5 Series (59.1%), and one crossover SUV: the BMW X5 (60.3%).
Other luxury vehicles from brands like Maserati, Jaguar, Audi, Volvo, and Lincoln made the list. As explained by iSeeCars, luxury cars tend to lose value quickly as consumers look for the latest models.
Government tax creditsand incentives offered on early models of EVs like the Leaf and the BMW i3 may also impact their depreciation, according to iSeeCars.
This is because “resale value is based on original MSRP” and “real-world transaction prices are effectively...lower,” reflecting a reduction of the credit amount.
What impacts car depreciation?
It is worth noting that the figures posted by iSeeCars are just averages, and will vary from vehicle to vehicle, depending on variables including mileage, accident history, and customizations, according to
U.S. News & World Report.
In the case of a luxury crossover like the BMW X5, iSeeCars noted that its comparatively high starting price, maintenance, and ownership costs impacted its marked depreciation.
What’s more, the
lack of interest in sedansthese days (the class to which several of the high-depreciation models belong) is reflected in lower resale prices, which factor in “high operating costs and outdated technology.”
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