It’s a fact of life, and certainly not news that cars depreciate. Some depreciate quite a bit, and on average cars depreciate to 37% of their original value after five years, according to Edmunds.
There are a few cars that hold their value better than others though, and every year KBB decides one standard, and one luxury brand that has the best resale value. From 2012-2016 KBB has awarded cars with the highest resale values to some combination of Toyota and Subaru, and among luxury brands Lexus has reigned supreme. It’s obvious enough why Toyota retains its resale value, as its cars last a long time and are reliable. By default since Lexus is from the same company, it makes sense why it would earn a slot as one of the top resale value cars. Subaru however, provides an interesting dynamic.
The general consensus was that while Subaru cars might not be as outright reliable as other brands like Toyota or Honda, it has options for sporty and practical cars like the Impreza or WRX wagon. Since the market of enthusiasts looking for high performing, cheap and practical sports cars is so small, theoretically the demand for Subarus hasn’t changed which means the prices don’t depreciate as quickly.
Lexus (and Toyota, for that matter) has claimed the luxury brand with the best resale value reportedly due to reliability and reasonable pricing, and demand for reliability and affordability is likely to hold. However, this year in 2017 Lexus has been dethroned by the prestigious German automaker Porsche.
This isn’t necessarily a surprise. Porsche’s 911 has been at the forefront of optimal resale value for a long time, with year models as recent as 2011 going up in value. However it is impressive that Porsche has earned the best resale value for all luxury vehicles, and with models like the Cayenne and Macan leading luxury crossovers and SUVs, and the 911, Panamera, 718 Boxster and Cayman leading luxury sedans and coupes. Both Toyota and Porsche had more than one vehicle competing as top 3 finishers in multiple categories, and that’s hard to beat.
Instamotor’s article about things that affect resale value provides good insights into what decides a car’s value. Porsches may have a higher price tag than other brands, but like Subaru it provides a niche market in which demand doesn’t typically change.
Buying a car already involves a lot of work, and for some people considering depreciation isn't part of the plan but it is something to watch out for. If you're getting a car that does depreciate to 37% of its original value then it might be best to keep it forever. However, if you're just looking to get a car for a few years, depreciation is an aspect you won't want to take lightly.
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