For some customers, depreciation is one of the main factors to consider when purchasing a car. In this regard, several car manufacturers stand out including Toyota, Jeep, and even Porsche. But, for the average buyer, a Toyota model offers the best value, especially when you consider the large lineup ranging from the comfortable and efficient sedans to the practical pickup trucks. Even older models hold their value with minimal depreciation; a used Toyota Tacoma will generally cost you more than most of the segment rivals.
While depreciation is fairly straightforward across all cars, some models stand out and retain their value considerably more over the years. Before we start let’s understand what depreciation is and some of the common factors that affect it.
Depreciation refers to the continual loss of a car’s value as it ages. Right as you drive a new car off the dealership it begins to depreciate as much as 30% in some cases. Naturally, as the car ages and mileage increases, expect a 15% depreciation every year till the 5-year mark. If you usually keep your car for a lot longer, depreciation is not a major concern. But, if you prefer switching cars once in a while, picking some of these models will help you minimize the effect of depreciation and sell at a higher price later on.
Milage is by far one of the biggest factors that determine the rate of depreciation. On average, a car is driven around 15,000 miles annually. If the mileage is more than that, expect to lose a considerable chunk of value when you decide to sell the car later on. Another factor that has turned up recently is fuel prices. Because of the high cost of running nowadays, small efficient models and hybrids will depreciate a lot less when fuel prices are high. So, opting for an efficient model might save you a few bucks depending on the fuel price. As expected, accidents and digs to the car’s body will impact value and increase depreciation, especially if it’s not repaired correctly.
The type of car and body style also play a major role in the depreciation rate. Luxury cars often depreciate the most over the initial years compared to a basic offering. Recently, sedans are also affected by high depreciation as the market moves towards crossovers and SUVs.
Let’s now take a look at five of the modern offerings that depreciate the least and help you save some money when you trade them in as of 2021.
Jeep Wrangler – 9.2% average depreciation over 5 years
As a lifestyle SUV that pulls your heartstrings, the Jeep Wrangler continues to take the top spot on this list. With a depreciation of just 9.2% after five years, Wrangler owners suffer the least depreciation losses in the market. While the numbers are for the 2-door model, the 4-door Jeep Wrangler Unlimited follows close behind with 10.2% depreciation. If we consider the difference from MSRP, the numbers stand at $2,796 for the 2-door model and $3,810 for the 4-door model. So, if you’re in the market for an off-road SUV and switch vehicles often, the Jeep Wrangler is an excellent choice.
Porsche 911 – 12.8% average depreciation over 5 years
Like the Jeep Wrangler, the Porsche 911 is also an enthusiast offering that is significantly improved with the latest 992 generation. The 911 was always known for blending plenty of practicality and super-car levels of performance, and the latest generation is no different. However, because of its high price, the difference in MSRP stands at $20,710. The 911 is also one of the most aspirational and famous luxury sports cars on the market with excellent reliability ratings and performance. Available in multiple configurations including convertible models, Porsche also offers a wide range of optional packages, boosting the cost to nearly $200,000 for some high-end models. However, since we’re considering a 2015 model here, the starting price was just over $84,000 back then.
Toyota Tacoma – 13.8% average depreciation over 5 years
It will be blasphemy for a least depreciating car list to not include a Toyota. In this case, the Tacoma pickup truck takes the lead with an average difference in MSRP of just $4,899. Because of their reliability, Toyota models usually retain their values higher than rivals and the Tacoma is no different. The 2015 model we’re considering here topped the reliability score for the class and was very well equipped for the time with a comfortable cabin and capable powertrain. The TRD Pro model was also available in 2015 which had some of the best off-road capabilities in the class. While the TRD Pro models edged near the $40,000 mark, the starting price of the 2015 Tacoma was $21,000. Unsurprisingly, the depreciation for some highly sought-after configurations is a lot less than usual.
Toyota Tundra – 19.5% average depreciation over 5 years
Coming to the second Toyota on this list, which is coincidentally also a pickup truck, the Tundra lost an average of $8,458 over the years. Being the bigger brother to Tacoma, the Tundra offers better performance, towing capacity, and more space in comparison. Its also more expensive, leading to a considerable gap in prices between the two. The 2015 Toyota Tundra was outdated in comparison to other segment offerings but it still sold well owing to its dependable and versatile nature. The interiors were also surprisingly comfortable and roomy for this class of pickup trucks. Off-road capability was also impressive with some options on offer. The average starting price back in 2015 was $28,510 and went up to $47,975.
Ford Mustang – 21% average depreciation over 5 years
Ever since the Mustang was launched back in 1965 at the start of the muscle car era, it has been a staple of the American automotive world. Currently, it’s also the only coupe sold by ford alongside their lineup consisting of just SUVs and pickup trucks. This is also one of the reasons why they retain their value quite well over the years. Its iconic status lends it a lot of character, especially when equipped with the massive V-8 powertrain. The starting price of the Mustang back in 2015 was $25,300 for models equipped with the smaller EcoBoost engine, while the V-8 offerings started at $32,300. On average, the Mustang lost $7,280 of value in depreciation over the years.
Some other notable models that depreciate the least include the Chevrolet Corvette (22.7%), Chevrolet Camaro (23.6%), Dodge Challenger (24.4%), and the Toyota 4Runner (24.6%). The average depreciation for all these vehicles over 5 years stands at 40.1% or an average of $15,764 from MSRP.
If we take a look at the other end of the spectrum, at the cars to avoid, models with the highest depreciation over five years include the Nissan Leaf EV (65.1%), BMW i3 (63.1%), BMW 7 Series (61.5%), Maserati Ghibli (61.3%), and the BMW X5 (60.3%).