All cars depreciate. The very second you drive that shiny, scratchless, brand-new vehicle off the dealer’s lot, its value decreases. Unfortunately, car depreciation is an unchangeable fact. Savvy car buyers know this, but most people don’t consider car depreciation when purchasing a new vehicle. Instead, they buy a new car based on their tastes and how much they’re willing to spend but don’t base their decision on its resale value. As a result, cars that don’t hold their value could be disappointing when trading or selling them outright. So let’s talk about some cars with the worst resale value.
Why Do Some Car Models Depreciate Faster Than Others?
Suppose you want to buy a new car to sell within 3 to 5 years. In that case, it’s important to understand why one brand or particular model loses value faster than others while some car brands keep excellent resale values. This is based on several different factors and can change over time. Some of the most common reasons include the following:
- Popularity – Trends can change quickly. What was once a popular or highly desirable vehicle can quickly hit the dog pile. Vehicle tastes and popularity can be fickle and are influenced by pop culture.
- Imagined value vs. true value – This rings true for many luxury vehicles. The high sticker price for luxury vehicles has much to do with ego and vanity. But, unfortunately, once that high-end expensive car or SUV is a few years old, it’s not so special anymore.
- Cost of repairs – Some mid to high-priced cars are incredibly expensive to repair. After several years and several thousand miles, the likelihood of a costly repair becomes more of a reality.
If you have an older vehicle or one lost most of its value within a few years, selling or trading it in could become a nightmare. Most dealerships will offer bottom dollar prices for cars with low resale values. A solution to this unfortunate situation is to sell it to a specialized dealership that offers the best money for depreciated cars like these.
Which Cars Have the Lowest Resale Value?
Let’s face it: most people don’t buy a new car thinking they’ll own and drive it forever. Unless you’re buying an antique vehicle that’s more for display than to get you from A to B, there will come a time when you’ll want to sell it. Regarding sale potential, knowing what you’re investing in is important.
No matter how much you spend, buying a car that doesn’t hold its value doesn’t make much financial sense. Yet, surprisingly, many vehicles don’t hold their value. This fact is especially true for luxury vehicles. So here are some to avoid.
BMW 7 Series – 5-Year Average Resale Value Loss: 57%
It’s common knowledge that the BMW brand is well-known worldwide for building eye-catching and desirable cars. But, unfortunately, many of us have watched one buzz by on the highway while we turn green with envy.
Oddly, the BWM 7 Series doesn’t retain its value. For its hefty sticker price, at the 5-year mark, owners of this luxury sedan are shocked to learn that it’s lost approximately 56 to 57% of its value. As a result, the 7 Series is a better deal for used car buyers who want the bragging rights of owning one but can’t afford to purchase it new.
Jaguar XF – 5-Year Average Resale Value Loss: 54%
Jaguar is known for stylish vehicles for cruising around town or zipping around a racetrack. But unfortunately, not everyone on the block owns one, and those who do, are usually proud of their purchase.
Unfortunately, the Jaguar XF sedan may seem like the optimal choice for drivers who crave luxury (and some attention), but not so much for when it comes to selling. The XF has a depreciation rate of around 54 percent, far more than more affordable vehicles. One of the reasons this Jaguar quickly loses value is its bad reputation for reliability and the high cost of repairs.
Infiniti XQ80 – 5-Year Average Resale Value Loss: 53%
New car buyers who want style, luxury, and a vehicle that can handle a bit of off-road fun love the Infiniti XQ80. This full-sized SUV has style and grace, but its resale value falls incredibly short.
At the 5-year mark, the XQ80 loses more than half its original sticker price value, making it incredibly difficult to recoup much of the upfront dollars spent on its purchase. One factor contributing to its decline in value is that the Infiniti brand isn’t as popular as it once was. As a result, Infiniti’s brand recognition has plummeted over the last few years.
Cadillac Escalade ESV – 5-Year Average Resale Value Loss: 52%
The lavish Cadillac Escalade ESV is another example of a luxury SUV that doesn’t hold its value for long. This statement vehicle used to turn heads and command respect, and to a degree, it still does. The change is that only brand-new Escalades are valued in today’s world. Once they’re more than a few years old, their desirability drops.
One reason for the Escalade’s low resale value is that the typical consumer who wants to own a luxury SUV is looking to purchase a new one. Older Escalades aren’t as desirable as they used to be. As a result, owners of a 5-year-old Escalade can only expect to sell it for less than half its sticker price.
Lincoln Navigator – 5-Year Average Resale Value Loss: 52%
This luxury SUV fares a little better than its rivals, but it can still be difficult to sell after just a few years of use. The Navigator is Lincoln’s top-of-the-line and one of their most expensive SUVs, and new ones are still quite popular.
Much like other luxury SUVs, the target buyers for Navigators are those who want to buy these vehicles brand new. Once they are a couple of years old, their owners typically trade them in for the latest model and don’t care too much about their loss of value. However, for those with a modest income, purchasing a new one should only be done if they keep it for the long haul.
Ford Expedition – 5-Year Average Resale Value Loss: 51%
Although Ford’s Expedition doesn’t have the same air of luxury and prestige as some of the other full-sized SUVs, it still remains a fairly popular choice amongst new car buyers. However, the Ford Expedition is more of a family-friendly vehicle known for its practicability than its head-turning ability.
At the 5-year mark, this still somewhat pricey SUV will have lost half of its value. For buyers who like to upgrade their vehicles often and have the money to do so, the Ford Expedition suits that purpose. However, if you’re of average means and want to sell yours, finding a buyer who will pay what you ask could be troublesome.
Which Car Brands Have the Worst Depreciation?
Some car models within a brand depreciate much faster than others, but some car brands universally have models that don’t hold their value. Listed below are the five car brands with the worst depreciation.
- Maserati – This Italian brand is known for incredibly expensive, fast-driving, eye-catching luxury sportscars. Unfortunately, they’re also known for having incredibly bad resale values.
- Volvo – This much more affordable car brand also has a low resale value. They suffered a lot of bad press through the years, mostly from recalls and vehicle safety issues.
- BMW – Although incredibly popular, this German carmaker has an incredibly bad reputation regarding resale value. New BMWs are highly desirable. Unfortunately, used ones aren’t.
- Audi – Over five years, most Audi models will lose as much as 64% of their purchase price.
- Lincoln – This American luxury brand doesn’t cut the mustard when selling. Used car buyers don’t appreciate the bells and whistles that this brand offers.
Top Luxury Cars with the Worst Resale Value
You would think that luxury cars retain their value better than your average run-of-the-mill vehicle. For some luxury cars, this is true, but it’s mainly due to their rarity or collectability. Unfortunately, cars like this are usually way outside the common person’s reach. However, there is a common car brand that is accessible to a lot of us that has the worst possible resale value.
The worst car brand as far as depreciation goes is Jaguar. Depending on the model, this somewhat expensive brand has a horrible reputation for retaining value. After only three years of ownership, most Jaguar models will lose 60% or more of their original value.
One of the causes for Jaguar’s quick depreciation is the high cost of maintenance and repairs. A simple oil change can hit the owner’s wallet to $300 to $340. The annual cost of maintaining a Jaguar is far above most other brands. They also have a reputation for needing costly engine repairs as they age.
Other highest depreciation cars in the luxury segment include:
- Maserati Ghibli, with depreciation of almost 57% at the five-year threshold;
- Audi A 6, with depreciation of almost 52% at the five-year threshold;
- Volvo S90, with a depreciation of almost 52% at the five-year threshold.
Interestingly enough, Tesla Model S and Model X are also among the cars that don’t hold their value, each losing an average of 40% of their initial price tag.
Top Sports Cars With The Worst Resale Value
The Mercedes-Benz SL-Class is one example of sports cars with poor resale value. According to Kelley Blue Book, the 2020 SL-Class was expected to lose around 61% of its value after five years, one of the highest depreciation rates among luxury sports cars. This may be partly due to the high cost of ownership for the SL-Class, which includes expensive maintenance and repair costs and a relatively high starting price.
- Another example is the Audi A5, which has recently seen relatively high depreciation. According to Kelley Blue Book, the 2020 A5 was expected to lose around 52% of its value after five years. One possible explanation is that the A5 has faced increased competition in its segment, which may have driven down its resale value.
- The BMW Z4 has seen relatively poor resale value in recent years. The 2020 Z4 was expected to lose around 51% of its value after five years. Like the SL-Class, the Z4 may suffer from high ownership costs and a high starting price, which could contribute to its relatively quick depreciation.
- The Mercedes-Benz SLK is another luxury sports car with relatively high depreciation in recent years. According to experts, the 2020 SLK was expected to lose around 50% of its value after five years. Like the SL-Class, the SLK may suffer from high ownership costs and a relatively high starting price, which factor in quick depreciation.
- The Chevrolet Corvette sports car has historically suffered from relatively high depreciation. For example, the 2020 Corvette was expected to lose around 47% of its value after five years. One possible explanation is that the Corvette has faced increased competition recently, which may have driven down its resale value.
Overall, sports cars that suffer from high depreciation rates often share certain characteristics, such as high ownership costs, a high starting price, and increased competition in their segment. These factors can make it difficult for these vehicles to maintain their value over time, leading to steep depreciation rates.
What Should I Do with a Car That’s Lost Its Resale Value?
If you’ve found yourself with a vehicle that, unfortunately, has lost a big portion of its sticker price, you’re probably wondering what to do with it. Those uncertain about their vehicle’s current value can use one of the many online calculators to make an idea of what they can expect to get for it. Quite a few of them are available online, but the most common and reliable one is Kelley Blue Book.
Selling your low-value vehicle to a private buyer will most likely leave you frustrated and feeling like you’ve wasted time. Most used car buyers will have consulted with an online car value calculator and will offer you less than its value. It’s worth a try, but you’ll likely end up with tire kickers and hardcore hagglers.
Scrap and junk yards will purchase almost any vehicle regardless of its make, model, and condition. As a result, selling to them is typically easy. However, you won’t get anywhere near your vehicle’s value.
The best solution to selling your car with a low resale value is to contact a specialized dealership that purchases cars that haven’t retained their value. This method will not only save you time, but you’ll also get a fair price. Most will pay you on the spot, so you can deliver the vehicle, fill out some basic paperwork, and walk out with cash.
Do You Have a Car with Poor Resale Value?
Before purchasing a new vehicle, it’s important to take the time to do some research to see if it’ll hold its value. Of course, new vehicles immediately drop in resale price the second they put a few miles on them, but some brands and specific models retain their value while others take a quick nosedive.
Buyers who purchase a new car they intend to keep for over five years or more may not be too concerned with its resale value, but that’s most likely not the case for everyone. So why spend your hard-earned dollars on a pricey new vehicle that will lose half its value in just a few short years? Don’t make the mistake that thousands of others have. If you’ve already made that mistake, sell your car with bad resale value to a specialized dealer.
