If you want a car that will hang onto its value, consider buying an SUV or truck.
Nine of the 10 models that retain the most of their value after five years are SUVs or pickup trucks, according to a recent iSeeCars.com analysis of some 4.3 million cars.
The cars that lose the most value after five years, on the other hand, tend to be electric vehicles and luxury sedans.
The 10 cars that depreciate the least
The average new car depreciates by 50.2 percent after five years — meaning it loses 50.2 percent of its original value by that point — according to the analysis. But you can cut that loss significantly by buying a Jeep Wrangler Unlimited or Jeep Wrangler.
This four-door SUV and two-door SUV, respectively, top the list of the 10 models that depreciate the least after five years. These models, and iSeeCars.com’s classification of them, are:
- Jeep Wrangler Unlimited (SUV): Depreciates by 27.3 percent after five years, on average
- Jeep Wrangler (SUV): 27.3 percent
- Toyota Tacoma (pickup truck): 29.5 percent
- Toyota Tundra (pickup truck): 37.1 percent
- Nissan Frontier (pickup truck): 37.8 percent
- Toyota 4Runner (SUV); 38.1 percent
- Chevrolet Silverado 1500 (pickup truck): 39.7 percent
- GMC Sierra 1500 (pickup truck): 39.9 percent
- Subaru Impreza (sports car): 42.3 percent
- Ram 1500 (pickup truck): 42.7 percent
By comparison, the bottom-ranked Nissan Leaf depreciates by a whopping 71.7 percent after the electric vehicle’s first five years on the road.
What depreciation means for you
A recent AAA analysis found that depreciation is the biggest cost associated with owning and operating a car. Specifically, depreciation will cost you an average of $3,000 per year over the course of the first five years that you own a new car.
The best way to avoid this loss is to buy a used car. As we put it in “You Should Never Buy These 10 Things New“:
The value of a new car drops like a rock as soon as you drive it off the lot. Rather than be upside-down on your car loan five minutes after signing the paperwork, look for a quality used car that has already taken the huge depreciation hit.
Another way to dodge depreciation losses is to choose your vehicle color wisely, as we detail in “5 Colors That Help Your Car’s Resale Value — and 8 That Hurt.”
What’s your take on vehicle depreciation? Share your thoughts with us by commenting below or over on our Facebook page.