There’s no escaping this fact: Car ownership is expensive. There’s the up-front cost of just buying a new vehicle in the first place — the average price has crept up to $37,851 in 2020, according to Kelley Blue Book — as well as fuel, maintenance costs, customizations, and the list goes on. Depreciation is one of those unseen forces, though, that can be the most costly angle when you consider buying a new car or truck. That is, if you plan to hold onto it for five years or more. The researchers over at iSeeCars just published an updated study on the cars that best retain their value, and the ones that depreciate the most over a five year span.
In creating this batch of data, the firm says they analyzed 8.2 million car sales to identify the best and worst examples. Over the first five years, the average car will lose roughly half its value: 49.2 percent. “While the average new vehicle loses almost half its value after five years, there are vehicles that retain more of their value and depreciate less than average,” iSeeCars Executive Analyst Karl Brauer said. “For consumers who purchase new vehicles and plan to sell them in the first 5 years of ownership, choosing a model that retains the most value is a smart economic decision, especially when you consider depreciation is the single large ‘cost’ to owning a vehicle.”
Top 10 least depreciating vehicles
Fuel, maintenance and purchase prices notwithstanding, what are the best options for resale value? If you were considering buying a truck or SUV on that front, you’re certainly thinking in the right direction. Perennial favorites like the Jeep Wrangler and Toyota 4Runner do feature here. Both SUVs are immensely strong second-hand sellers. Even older examples from the early 2000s still trade hands at respectable prices, given their age. Most of the cars and trucks on this list have a reputation for being robust or carry a certain character, which helps when it comes to depreciation.
While the average car loses nearly half its value in the first five years, cars and trucks here beat that trend by 11.4 to 37.1 percent.
Surprises in lowest depreciators?
Even just going off anecdotal evidence, there are relatively few surprises here. Two- and four-door Jeep Wranglers hold their value well, as do most Toyota trucks. Buyers are snapping up Tacomas in droves, and there’s an enormous aftermarket community around Toyota’s best-selling midsize truck. It’s a similar story with the 4Runner SUV and the Tundra full-size pickup. Among sports car enthusiasts, the Porsche 911 has a reputation as the pinnacle of what the breed should be.
That said, the Dodge Challenger and Subaru WRX are less expected contenders in a depreciation list. iSeeCars posits the WRX maintains its value because of its low-volume production. The Challenger, on the other hand, offers a strong price walk against its rivals and carries a classic sort of American styling. It’s tough to argue that last part: Even after 12 years in its current generation, the Challenger still looks cool. And, if you shop at the higher end of the range, you won’t get more power for less money. Accessibility is the name of the game there, and the Challenger offers huge fun that mere mortals can actually afford.
Top 10 highest depreciating vehicles
But how do things look in the other direction? These cars are solidly in the “ouch” column when it comes to depreciating. The best case scenario among iSeeCars’ research is that you’ll lose 35.4 percent more over five years than the average. At worst, these cars depreciate 47.9 percent faster than average, losing nearly three-quarters of their value in the first five years.
On the other hand, you could look at these options as the best to buy if you don’t care about depreciation. Buy 5-year-old examples of these cars, where previous owners have already taken that hit for you, and you could argue these as strong used buys.
While stout trucks and SUVs dominate the best depreciating cars list, you can see the trend among the worst offenders. Luxury cars make up eight of the ten slots here. “Expensive luxury vehicles like the BMW 7 Series depreciate steeply because they include expensive features and technology that aren’t valued among used car buyers,” Brauer said. Others, like the BMW 5 Series, Audi A6 and Mercedes-Benz S-Class are similarly stuffed to the gills with expensive technology. Not only is much of it superfluous, but it could also lead to major headaches should you need to shell out the money to fix any issues after five years.
Owners tend to lease these luxury cars as well, creating a glut of three-year-old models in the marketplace. However, it’s not just luxury cars. Thanks to government tax incentives, the Nissan Leaf also struggles to hold its value over the years. “Electric vehicles like Leaf also become outdated quickly due to the rapid advancements in range and battery life.” While later versions of Nissan’s EV have decent range, earlier examples only manage about 84 miles or so. And that’s assuming you don’t need the battery replaced as its range degrades further over the coming years.
What about cheap cars?
If you don’t necessarily have a ton of cash to buy a new Wrangler, you aren’t completely out of luck. Less expensive cars follow similar trends in terms of depreciation. iSeeCars also looked at models under $25,000 to see which were the best and worst depreciating examples.
Cars with strong reputations for reliability like the Toyota Corolla and Honda Civic fare well. Other small hatchbacks that have strong showings are the Honda Fit and the Kia Soul. On average, these cars lose between 43.6 and 49.4 percent of their value over five years. As you aren’t paying quite so much for them in the first place, though, that’s a much smaller hit to take.
Even cars on the other end of the spectrum — the worst depreciating economy cars — aren’t quite so bad. The worst among them is the Mitsubishi Mirage with its miserly three-cylinder engine and lack of general flavor. That said, it’s cheap as chips to buy, easy to run and won’t cost a fortune to keep on the road. The same story rings true, by and large, for the Chevy Sonic, Volkswagen Jetta, Kia Rio and Nissan Sentra.