Depreciation, or the rate at which a vehicle loses value over time, is a term most car owners are familiar with. In a nutshell, it’s the difference between how much your vehicle was worth when you bought it versus how much it’s worth when you sell it.
You may have heard the expression about a car losing value the moment it’s driven off the lot. While it sounds cliché, there’s a lot of truth in that statement. Most brand new vehicles lose around 10 percent of their value the second it leaves the lot. In the first year, most vehicles will lose up to 20 percent of their original value. Keep fast-forwarding to the five-year mark and you’re still looking at a loss, on average up to 60 percent from the car’s original price tag. It sounds depressing, but the good news is that it’s totally normal.
But what makes a car’s value decrease, anyway? A couple of things.
One reason is just plain old perception. People value things that are new and to the average person, new means untouched. The more you use your car, the less new it is to its next owner.
Fuel prices can impact depreciation, too. Big trucks and SUVs that don’t get great gas mileage will have a faster depreciation rate than smaller, more fuel-efficient vehicles — especially when fuel prices are high.
The two things that affect the depreciation the most are time and mileage. Simply put, the more you use your car and the longer you have it, the less value it has. Sure, you could keep mileage to a minimum in an effort to preserve your vehicle’s value, but that kind of defeats the purpose of having a car, doesn’t it?
Instead, consider investing in a vehicle that will hold its value for longer. A recent report analyzed more than 7.7 million new and used cars to determine which cars hold the most value in the first five years. While most cars depreciate at almost 50 percent in the first five years, ten cars stand apart from the rest.
Get the most value from your vehicle with one of these top ten cars with the slowest depreciation rate:
1 – Jeep Wrangler Unlimited
Average 5-year depreciation: 30%
Jeep has become known for making rugged, durable vehicles. Now, they’re becoming known for holding their value, too. Jeep Wrangler Unlimited has the slowest depreciation rate on the market – a rate that is nearly 20 percent lower than the average vehicle.
2 – Jeep Wrangler (2 door)
Average 5-year depreciation: 31.5%
Just like it’s sibling in the number one spot, Jeep Wrangler has a slow depreciation rate, durable build, and a loyal brand following. Three things that contribute to high resale value.
3 – Toyota Tacoma
Average 5-year depreciation: 32%
Much like Jeep, Toyota has become known for its reliable vehicles. The Toyota Tacoma is a sturdy truck with a 32% depreciation rate, making it one of the best trucks you can buy or sell used.
4 – Toyota Tundra
Average 5-year depreciation: 35.9%
The Toyota Tundra echos its cousin above, only with a slightly faster depreciation rate. Coming in with a 35.9%, the Tundra is a little bigger than the Tacoma and a great all-around truck to buy or sell used.
5 – Toyota 4Runner
Average 5-year depreciation: 36.5%
Toyota’s trusty midsized SUV, the 4Runner, has had a loyal following since day one. With a reputation for ruggedness and reliability, the slower-than-average depreciation rate only adds to the 4Runner’s overall value.
6 – Porsche 911
Average 5-year depreciation: 37.2%
Sports cars are often thought of as “dream cars” and the Porsche 911 certainly lives up to its hype. This beloved model of Porshe’s well-respected brand has the slowest depreciation rate of any other sports car on the market. Now that’s a real dream car.
7 – Honda Ridgeline
Average 5-year depreciation: 38.1%
Honda is a much-respected brand and with a relatively slow depreciation rate, the Ridgeline is an excellent choice for a compact, sturdy truck with solid resale value.
8 – Nissan GT-R
Average 5-year depreciation: 39.4%
Nissan doesn’t widely produce the GT-R, making it a hot item for sports car enthusiasts. A reliable car that holds its value well, making the GT-R an all-around good vehicle.
9 – Nissan Frontier
Average 5-year depreciation: 39.5%
The same goes for Nissan’s Frontier. This midsized pickup is a popular option for those looking for a practical truck with great resale value.
10 – Subaru WRX
Average 5-year depreciation: 40%
Last but certainly not least, the Subaru WRX. Subaru has gained a loyal following with its many models. The WRX is a great compact car known for excellent handling and all-wheel drive. While 40 percent depreciation rate isn’t fantastic, it’s a solid 10 percent lower than the average.
Found the used car of your dreams?
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