Best Investments: Vehicles that hold their values over time

Here are the cars, trucks and SUVs that depreciate the least

Astute car shoppers know that to get the best long-term deal on a new vehicle, one has to consider its ongoing ownership expenses. The biggest of them is depreciation or the degree to which a given vehicle’s value will drop over time. This is based on a variety of variables, including economic factors, historical data and supply and demand issues.

The estimated average transaction price for a lightduty vehicle in the U.S. now stands at over $38,000. A typical model drops 49.6 of its original value after five years, which translates into nearly a $19,000 loss. What’s more, the more expensive the vehicle, the more important this critical ownership factor becomes over time, simply because there’s more money at stake to lose.

A five percent difference in resale value after five years between competing $70,000 cars would represent a $3,500 return at trade-in time, assuming both cars are kept in good condition with average mileage. However, differences in resale values among similarly priced models tend to narrow the longer one keeps a vehicle, and can become negligible if you’re the type of person who literally “runs a car into the ground.”

What’s more, depreciation is of major consequence to those who lease a new car or truck instead of purchasing one outright. That’s because monthly payments are primarily based on the difference between a vehicle’s transaction price and what it’s predicted to be worth at the end of the term, financed at a set interest rate.

As it turns out, the 10 models that are predicted to best hold onto their original values are pickup trucks, sportutility vehicles and sports cars. That’s according to a recent study of over 7.7 million vehicle transactions conducted by the auto research website iSeeCars. com in Woburn, Massachusetts. We’re featuring the list with the percentages of lost value after a five-year ownership period in the accompanying box.

The best-performing models in this regard will depreciate 19.4 to 39.5 percent less than average. The top two models in this regard are the Jeep Wrangler and the four-door Wrangler Unlimited, which historically bring back high resale values.

“Jeep Wranglers are known for retaining their value for reasons including their ruggedness, durability, and iconic design,” says iSeeCars CEO Phong Ly. “Because of Jeep’s loyal following, their demand outstrips supply in the used car marketplace leading to high resale values.”

Meanwhile, the models that drop their values the most precipitously, according to iSeeCars.com, are expensive luxury sedans, and electrified cars. “Luxury cars have steep depreciation because

owners likely trade them in when they become outdated and used car buyers don’t want to pay a high premium on a dated model,” explains Ly. “Previous government incentives contribute to the steep depreciation of electric and plug-in hybrid vehicles [while] outdated technology also contributes to their dramatic depreciation.”

The worst offender here is the Maserati Quattroporte luxury sedan. It loses an average of 72.2 percent of its original worth after half a decade, which comes to a staggering $95,393 in depreciation.

Overall, Toyota, Ram, Jeep, Honda, and Porsche vehicles tend to hold onto their values the best over time. “Toyotas have a strong reputation for reliability and longevity, and their high resale values reflect that,” says Ly.”