The car with the lowest price tag isn’t always the best value. A good value can often be found in depreciating cars that have lost the most value in the shortest amount of time. The average car depreciates in value by 35 percent in 3 years, but some cars depreciate faster or slower than that.
Car research site iSeeCars has studied more than 4.1 million car sales to determine which cars depreciate the fastest in 3 years. Thirty-six months is a common lease term, which means the 3-year mark is when a lot of off-lease cars start showing up for sale on the used market. Here are the top 10 fastest-depreciating cars, and what percentage of their value they lose after 3 years:
- BMW 5 Series – 52.6 percent
- Volkswagen Passat – 50.7 percent
- Mercedes-Benz E-Class – 49.9 percent
- BMW 3 Series – 49.8 percent
- Ford Taurus – 49.7 percent
- Chrysler 200 – 48.4 percent
- Volkswagen Jetta – 48.1 percent
- Audi A3 – 47.9 percent
- Cadillac SRX – 47.2 percent
- Buick Enclave – 46.8 percent
It’s no surprise there are a lot of sedans and luxury cars on this list. Sedans are quickly declining in popularity compared to crossovers, and luxury vehicles traditionally depreciate faster than the industry average. It’s worth noting every car in the top 10 is from either an American or German brand. That means the reputation of Asian cars holding their value well is holding up.
Something to keep in mind if you’re shopping for these cars is reliability. Historically, BMW, Audi and Mercedes-Benz have high maintenance costs. That means the money you save on buying a used model after it’s seen some depreciation might come back to bite you in the form of costly repairs. If you’re worried about the reliability of a used luxury car, consider shopping for a certified pre-owned (CPO) model that still has a manufacturer’s warranty to give you some peace of mind and potentially save you a lot of money.
If you’re shopping for a new luxury car, consider one of the Japanese or Korean luxury marques like Lexus, Acura, Infiniti or Genesis. You’ll likely take less of a depreciation hit than you would with a similar car from Cadillac, BMW or Mercedes-Benz. Japanese luxury cars also have strong reputations for good reliability, which is another advantage on top of slower depreciation.
However, if you’re looking for a used sedan or luxury car, there are a lot of great values to be had. Just remember there are things like reliability and maintenance costs involved, so you don’t get stuck with an unreliable car that’s affordable to buy, but expensive to keep on the road. If there’s a specific model you have your eye on, do your homework to see if it’s really the right car for you.
That being said, don’t let potential maintenance costs scare you. A warranty from a CPO car or a dealer is a good way to get the car you really want without needing to worry about maintenance. Shop around on Autotrader to find some great deals on depreciated, gently used cars.