Status-seeking luxury-brand buyers and frugal environmentalists rarely find themselves lumped into the same category.
But both groups tend to see the value of the cars they prefer plunge dramatically, according to a recent analysis by iSeeCars.
The automotive search engine and research website says luxury sedans make up eight of the 10 vehicles with the highest depreciation rates after five years.
Meanwhile, being friendly to the Earth can be hostile to your wallet, according to the rankings. Two alternative-fuel vehicles also had the dubious honor of making the list.
The 10 vehicles with the worst depreciation rates are:
- BMW 7 Series: Loses 72.6% of its value after five years, on average
- BMW 5 Series: 70.1%
- Nissan LEAF: 70.1%
- Audi A6: 69%
- Maserati Ghibli: 69%
- Mercedes-Benz E-Class: 69%
- Volvo S60: 67.8%
- Mercedes-Benz S-Class: 67.1%
- Lincoln MKZ: 67.1%
- BMW X3: 66.5%
Karl Brauer, executive analyst for iSeeCars, says luxury cars see their value quickly fade in part because they have expensive features and technology that used-car shoppers do not value.
Another factor contributing to their quick depreciation is that luxury cars are often leased. As a result, there tends to be a surplus of 3-year-old off-lease luxury vehicles for sale, which decreases demand for older luxury models.
Several factors quickly zap the value of eco-friendly cars as well, Brauer says:
“Government incentives play a role in the LEAF’s steep depreciation, as its resale value is based on its lower effective post-incentive sticker price. Electric vehicles like the Nissan LEAF also become outdated quickly due to the rapid advancements in range and battery life.”
At the other end of the spectrum, the Jeep Wrangler Unlimited holds on to its value better than any other vehicle. It loses just 30.9% of its value after five years, on average.
Brauer says of the Wrangler Unlimited and the two-door Wrangler, which ranked No. 3 due to losing only 32.8% of its value after five years:
“Jeep Wranglers are known for retaining their value due to their enduring popularity, as well as their durability and performance across all terrains. Jeep Wranglers also have maintained their iconic design, so even older models don’t appear dated.”
The average depreciation rate for all cars included in the study was 49.1%.
In its analysis, iSeeCars looked at more than 8.2 million new and used cars from model year 2015. The new cars were sold in 2015, and the used cars were sold between January and September 2020.
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