4 Car Brands That Lose Value Faster Than the Average Vehicle


Vernon Yuen/NurPhoto/Shutterstock / Vernon Yuen/NurPhoto/Shutterstock

Vernon Yuen/NurPhoto/Shutterstock / Vernon Yuen/NurPhoto/Shutterstock

When buying a new or used car, obviously the purchase price is going to be the most important consideration. Knowing whether you can pay in full — or what your down payment and monthly installments will be if you finance — likely will be the deciding factor in your choice of car.

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There are, however, important costs to consider after you’ve made the purchase, commonly called the costs of ownership. Some are obvious, such as fuel economy and reliability. Others, like depreciation, are often overlooked.

Depreciation is a crucial factor to consider when purchasing a car, as it significantly impacts the vehicle’s long-term value and overall cost of ownership. While all cars lose value over time, the rate at which they depreciate varies widely among different brands and models. Several factors contribute to the rapid depreciation of certain car brands, including initial purchase price, market demand, brand reputation and the availability of newer models with advanced features.

GOBankingRates spoke to automotive experts to find out which brands are depreciating much faster than the average vehicle.

Luxury Vehicles

Todd Bialaszewski is a certified master mechanic with over 15 years of experience repairing all vehicle types. He is the founder of Junk Car Medics, where he leads mechanics in sustainably recycling cars. He said many luxury vehicle brands experience rapid depreciation, with some models losing over half their value in the first few years of ownership. Factors such as high initial prices, frequent model updates and consumer demand shifts can all contribute to certain cars losing their resale value at an accelerated pace.

“From my experience, luxury brands like Maserati, BMW and Cadillac tend to lose value much faster than average,” Bialaszewski said. “These high-end vehicles often come with steep price tags that buyers can’t justify as the cars get older. I’ve had customers trade in Maseratis and BMWs after just a few years because the value plummeted quickly.

“One customer brought me a 5-year-old Maserati Quattroporte. He had paid over $100,000 for it, but by the time the warranty was up, similar used models were selling for around $35,000 to $40,000. That’s a staggering amount of depreciation in just five years. Luxury sedans seem especially prone to this rapid value decline.”

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Electric Vehicles

Troy Webber is the president of Chesterfield Auto Parts, a Virginia company with three locations and 100 employees. He also created Yardsmart, a cloud-based app for automating the self-service auto yard.

He noted that electric vehicles currently experience rapid depreciation, in part due to the fast pace of technological improvements in electric vehicles and especially the batteries that power them. He pointed out one manufacturer in particular.

“Tesla is the most likely car to depreciate quickly,” he said. “Because they keep dropping the price for a new car, most are concerned that if they buy a new Tesla now, in six months the price of a new one will drop by another $10,000 and kill the trade-in value of a new car.

“Having grown up in the auto recycling business and owning a self-service auto recycling yard, I don’t see many people in the business driving a Tesla,” he added. “Even though they have been around for a while, they are still a relatively new automaker that has yet to pass the test of time. There are not a lot of Teslas entering the scrap stream yet. They are a parts bin car company that uses a lot of components from other car manufacturers. They have had a lot of recalls, and the quality of the cars has not proven to be very good.”

Stick to the Mainstream

So which car makes should you be considering if rapid price depreciation is a concern for you? Bialaszewski recommends sticking to brands known for being reasonably priced and easy to own.

“On the flip side, trucks and SUVs from mainstream brands like Ford, Chevy, Toyota, etc., tend to hold their value much better over time,” he said. “The demand is consistently high, and they’re just efficient, long-lasting vehicles for many people’s needs. A 5-year-old truck is still worth a decent chunk of change.

“In my professional experience, if you’re worried about resale value … avoid luxury cars or the latest electric vehicle fads. Instead, go for a reliable, mainstream truck or SUV — those will likely depreciate much slower over the long haul.”

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This article originally appeared on GOBankingRates.com: 4 Car Brands That Lose Value Faster Than the Average Vehicle



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