Let’s say you’ve just bought a new car within the last four or so years.
You decide that it’s time for a change, so you try to trade your vehicle in, expecting to get a lot for it.
After all, you’ve been kind to the car; it’s in excellent condition, and it’s still practically new.
Then you get the bad news:
Your trade-in value has come in way lower than you could have imagined. How is this possible?
The fact is, new cars have an incredibly fast depreciation rate. Most of them will fall by up to 20% in the first year alone.
If you know that you’re going to be changing cars every few years, you should understand which cars depreciate the fastest. Avoiding these makes and models could lead to higher trade-in value in the future.
Here are the top eight fastest depreciating cars on the market today.
Do Luxury Cars Depreciate Faster?
You’re going to notice that a lot of the cars on this list are luxury vehicles. That’s because, yes, they tend to depreciate faster than any other vehicle.
Certified pre-owned luxury brands lose more value than their downmarket competitors because of leasing. The majority of luxury sales are leased, which means they are returned within a few years.
Because of that, there is a constant stream of three-year-old vehicles hitting the used car market. That, in turn, drives down costs substantially.
1. Nissan Leaf
The Nissan Leaf Electric Hatchback is one of the biggest depreciators of them all.
Electric vehicles are great for fuel efficiency, however, they tend to evolve quickly from a technological standpoint. That means that the two-year-old Nissan Leaf you’ve been taking fantastic care of has become outdated technology.
The advancement of technology is a significant factor that contributes towards the Leaf’s drastic depreciation.
On top of that rather substantial factor, there is a severe lack of public charging infrastructure when it comes to used cars. That also remains a big problem that contributes to their worth depreciating.
While the Chevrolet Volt made a significant impact on the automotive industry when it first came out, it’s now an old concept.
The Chevy Volt is another electric car that let the industry pass it by quickly. If you own a Chevy Volt, you’ve likely seen the resale value plummet with every passing year.
The depreciation rate is even faster after five years of ownership.
3. Mercedes Benz S Class
The Mercedes Benz S Class is the German automaker’s flagship sedan. You may think that because of the value Mercedes places on these vehicles, it would be safe from a high depreciation rate.
You would be wrong.
So why does the Mercedes Benz S Class depreciate so rapidly? A lot of it has to do with associated costs.
This is a costly vehicle when new. It’s also incredibly expensive to fix, which drives its resale value down in the market.
4. BMW 7 Series
When you look at depreciating cars, the BMW 7 Series is always a part of the conversation. That’s because it has the dubious distinction of being the first vehicle to break the 70% depreciation barrier after five years of ownership.
BMW Series 5 and 7 depreciate quicker than their Mercedes-Benz rivals, which is a huge check in the con column when you’re looking for quick vehicle turnover.
5.BMW 5 Series
The BMW 5 Series and Mercedes Benz E Class tend to compete for the same buyers. They’re also both on this list.
This BMW mid-sedan loses value at a much faster rate than average in the US, making it a hazardous buy.
6.Mercedes Benz E Class
The Mercedes Benz E Class is expensive when new and costly to maintain, which is the surest recipe for fast depreciation.
It’s a luxury car, so it suffers a similar fate to others in its class. These vehicles are leased a lot, so you see a massive influx of three-year-old versions of this car placed back on the market.
That overflow of product kills the market value.
Much like the Mercedes Benz E Class, the Jaguar XJL is a luxury vehicle that depreciates quickly because of a large percentage of leases.
Because it is leased so much, there is a surplus of three-year-old, off-lease Jaguar XJLs on the market, which lowers the demand for older models and kills the resale price and trade-in value.
Although the Impala is a full-size sedan and an outlier on the depreciation list, it underwent a significant redesign in 2014.
That’s all well and good for everything from 2014 and beyond. But it’s a bullet to the head for the 2013 model.
Chevy Impalas are used as rental cars, which is another huge red flag when it comes to the depreciation of value. There is currently an oversupply of these vehicles coming out of fleets. Much like the issue of leasing hurting luxury models, the rental factor lowers the demand and contributes to a lot of the depreciation we see for this model.
Depreciation is something that no one wants to think about, but it is something that everyone should consider when buying a new car.
It’s easy to get lost in the excitement that accompanies a new car purchase. You can’t wait to get behind the wheel and take to the road. But you have to be thinking about the future before putting pen to paper and getting that title.
You can’t let the excitement of starting your car’s journey cloud the end of that journey. Eventually, you will have to get rid of this car, and you want the trade-in or sale value to be as high as possible.
All the proper maintenance and care in the world can’t combat the depreciation of these eight vehicles. Make sure you’re being responsible when purchasing a new car.
If you need some help, check out CoPilot to find the best new and used cars in your area. You can even filter out cars with high depreciation values to ensure that you’re getting the best bang for your buck.