We are living in times when a used car can cost more than a brand new car only because it can be delivered right away. Due to the chip shortage and a few other important factors, new car deliveries are often delayed from a few weeks to several months. This unusual situation leads to significant changes in the depreciation rates of used cars, and a new study finds the models that retain the most value five years after leaving the showroom floor.
The research by iSeeCars analyzed more than 8.2 million car sales of cars from the 2016 model year to find which are the models with the lowest and highest loss in value from MSRP after five years. The first and most interesting finding of the study is that, on average, a five-year-old vehicle depreciated by 40.1 percent in 2021, compared to 49.1 percent the prior year.
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The best models in terms of depreciation during the first five years lose 1.6 to 4.4 times less of its value than average. According to the study, the Jeep Wrangler loses just 9.2 percent of its value after the fifth year or about $2,796 of its MSRP. The Wrangler Unlimited comes second with 10.5 percent depreciation, followed by the Porsche 911 (12.8 percent), Toyota Tacoma (13.8 percent), and Toyota Tundra (19.5 percent).
In general, sports cars account for five models in the Top 10 list with the Ford Mustang and Chevrolet Corvette ranking sixth and seventh, respectively. The Chevy Camaro and Dodge Challenger are eighth and ninth with 23.6 percent and 24.4 percent depreciation, respectively.
If you are looking for a smart deal on a used car, it seems that electric vehicles are the answer. The Nissan LEAF has the highest depreciation after five years, according to the study, losing 65.1 percent of its value or $23,666 on average. The BMW i3 comes second with a depreciation of 63.1 percent, or $32,663 off the sticker price when new. The Top 5 list also includes the BMW 7 Series (61.5 percent depreciation), Maserati Ghibli (61.3 percent), and BMW X5 (60.3 percent).
“We’ve seen record high used car prices over the past 15 months as a result of the microchip shortage, and that has slowed down the average depreciation rate across all vehicles,” Karl Brauer, executive analyst at iSeeCars, comments. “Vehicles that have historically maintained their value well have depreciated even less this past year, but even in today’s market some cars continue to drastically drop in value.”