Which Used Car Should You Buy? The Cars That Depreciate the Most After 5 Years
With the exception of a particularly distinct vehicle previously owned by someone famous, all cars depreciate in value. In the US, the average vehicle loses nearly half of its original value in 5 years. However, some cars lose their value faster than others. While a fast depreciation rate is bad news for a car’s original owner, for buyers in the after-use market, it presents an excellent opportunity to afford a nice car. In this article, we list down the cars that depreciate the most after 5 years. As expected, luxury vehicles make the majority of our list due to their high cost of ownership and maintenance that puts off many potential buyers:
10. Chevrolet Volt
68.1% depreciation ($27,282 difference)
The Chevy Volt made some big waves when it first made its debut in the auto market. Boasting a revolutionary plug-in hybrid engine, the Volt made its appeal by offering exceptional mileage and low emission rates. However, as newer and better competitors have entered the market, the fall in popularity of the Volt has been just as dramatic as has been its rise, with a sharp drop of nearly 69% in the last 5 years. Just earlier this year, the Chevrolet discontinued the production of the car, citing declining sales.
9. Jaguar XJL
68.9% depreciation, ($66,879 difference)
Big isn’t always better and this is especially true when it comes to luxury cars retaining their value. The range-topping Jaguar XJL has seen a sharp decline in value. While the high cost of maintenance and ownership are significant factors behind the car’s falling resale prices, the market for large luxury sedans as a whole has been diminishing as SUVs become more popular with consumers. Not surprisingly, the Jaguar XJ line-up is no longer in production.
8. BMW 6 Series
69% depreciation ($69,524 difference)
The BMW 6 Series is a vestige of a bygone era, a gas-guzzling giant stubbornly clinging on despite the rapidly changing trends in the auto industry. Of course, this is not to say that it isn’t a beautiful luxury sedan, offering superb performance. But it is also here that the fault lies, people are not just interested in sedans and are more environmentally conscious. Not surprisingly, the decline in its resale value has been reflective of this trend.
7. Ford Fusion Energi
69.1% depreciation ($29,590 difference)
The electric version of the latest generation Ford Fusion has seen the largest decline in the resale value of the three. Partly because of previous government incentives, resale values are based post-incentive market prices. This holds true in the case of many electric vehicles. However, the higher than average decline of the Fusion compared to other electric counterparts is also due to its being a sedan.
6. Acura RLX
69.2% depreciation ($42,913 difference)
The steep nosedive in the value of the Acura RLX comes as no surprise. It is a full-size luxury sedan that, since its debut, struggled to compete against more well-known brands. While the car itself isn’t bad, there simply aren’t that many people interested in buying the car, especially a used one. As such, in the last 5 years, the car has depreciated by nearly 43 grand.
5. BMW 5 Series
69.2% depreciation ($44,673 difference)
Another luxury sedan from BMW makes our list of cars that depreciated the most after 5 years. Similar to its 6 Series counterpart, despite being overall a great vehicle, 5 Series is a dying breed. Shifting tastes in the American consumer market, as well as potentially high upkeep costs, means not many people are willing to purchase such cars.
4. BMW i3
70.9% depreciation ($38,922 difference)
Offering a lower range than many of its competitors, while coming at a higher starting price, it was obvious that the BMW i3 was bound to suffer significant depreciation. On average, nearly ¾ of the car’s value has been cut off in the last 5 years. While the premium price of a new i3 may have not promised an excellent bang for the buck, the far lower price tag of a used model does make it now an appealing purchase.
3. Nissan LEAF
71% depreciation ($25,350 difference)
Like the Volt, the Nissan LEAF was revolutionary when it first entered the market. However, like the volt, it is now showing its age. While the range on offer by the Nissan LEAF was incredible when the car was still new, now many competitors easily outperform the car in this department. With far better options now on the market, it is easy to see why the resale value of this electric vehicle has seen such a dramatic decrease.
2. BMW 7 Series
71.3% depreciation ($75,550 difference)
The priciest and grandest of the three BMW mentioned on our list is also the one suffering the highest depreciation rate. It is surprising to see, however, that none of its major German competitors, such as Audi and Mercedes-Benz, made our list. Perhaps, this may be due to their higher reliability standards. While the $75,550 difference is a pretty hefty sum to be cut off in just 5 years, it still doesn’t compare with the figure first on our list.
1. Maserati Quattroporte
72.2% depreciation ($97,178 difference)
With depreciation in value approaching nearly 6 figures, the Maserati Quattroporte has been the worst performer when it comes to resale value over the last 5 years. Aside from the list of factors already mentioned that likely influenced its fast depreciation, the car also suffers from a limited dealer network within the United States.
Major Factors That Affect Resale Value
There are a lot of factors that influence how much a car depreciates over time. Even the same car model of the same year may depreciate at different rates depending on these factors. The information presented here could be useful in order to properly gauge the true resale value of a particular car:
The older the car, the more it depreciates. This is because, each year, manufacturers release new models of the same car so older versions are seen as less valuable.
The higher the total number of miles clocked in, the less valued the car will be. Be sure to also know that what may be considered a ‘high mileage’ would be different for different cars. 15,000 miles on a luxury sports car would be considered high while on a family sedan, it would be low.
- Supply and Demand
If the consumer demand outstrips supply, the car will depreciate much more slowly.
- Incentives to Buy New
If the newer models improve drastically over their predecessors, the appeal of the latter obviously declines.
Cars perceived as more reliable and prestigious suffer from far slower depreciation due to there being greater willingness to buy.
For cars that suffer from rapid depreciation, buying a used one often is the smarter choice. However, that is when you are paying for it upfront or buying in installments directly from the dealer. In case of purchasing through auto loans, a little research would have to be done on your part to weigh in the costs and benefits. This is because, with used cars, higher interest rates are charged.