Understanding Car Depreciation
Car depreciation is a significant factor for both new and used car buyers. A recent study analyzed cars that hold and lose value, identifying models that are best avoided by shoppers looking to purchase new vehicles.
Key Findings
- Every new car depreciates, but the rate varies significantly across different models.
- Buying a used or pre-owned car is generally a good way to avoid rapid depreciation.
- The study compared the average high and low Manufacturer’s Suggested Retail Prices (MSRPs) of new models to their current average prices to determine the total value drop and percentage depreciation.
Cars with the Fastest Depreciation
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2022 Tesla Model S: -61.53% Depreciation | -$74,131.50 Value Lost
- Average Price New: $120,490
- Average Price Used: $46,358.50 The Tesla Model S, particularly the high-performance Plaid model, experienced significant depreciation due to its high initial price and frequent updates to Tesla’s lineup.
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2022 Tesla Model Y: -56.64% Depreciation | -$38,510 Value Lost
- Average Price New: $67,990
- Average Price Used: $29,480 The Model Y’s depreciation is attributed to Tesla’s pricing strategy and frequent changes to its models.
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2022 Tesla Model X: -55.23% Depreciation | -$71,792 Value Lost
- Average Price New: $129,990
- Average Price Used: $58,198 The Model X’s polarizing design and Tesla’s pricing fluctuations contributed to its depreciation.
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2022 Lucid Air: -54.74% Depreciation | -$70,171.50 Value Lost
- Average Price New: $128,200
- Average Price Used: $58,028.50 As a new luxury EV brand, Lucid Air faced challenges in retaining value due to its high price and the inherent risks associated with new technology.
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2022 Tesla Model 3: -53.31% Depreciation | -$29,315 Value Lost
- Average Price New: $54,990
- Average Price Used: $25,675 The Model 3, being the most affordable Tesla, still suffered from the brand’s overall depreciation trend.
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2022 Polestar 2: -52.48% Depreciation | -$25,140 Value Lost
- Average Price New: $47,900
- Average Price Used: $22,760 The Polestar 2’s value was affected by its limited sales volume and competition from other EVs.
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2022 Chevrolet Trailblazer: -51.99% Depreciation | -$12,789 Value Lost
- Average Price New: $24,600
- Average Price Used: $11,811 The Trailblazer, a subcompact crossover, depreciated significantly despite being comfortable and offering good value when new.
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2022 Volkswagen ID.4: -51.33% Depreciation | -$23,263.50 Value Lost
- Average Price New: $45,320
- Average Price Used: $22,056.50 The ID.4’s depreciation can be attributed to the release of newer models and competitors in the EV market.
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2022 Mercedes-Benz EQS Sedan: -50.81% Depreciation | -$63,990 Value Lost
- Average Price New: $125,950
- Average Price Used: $61,960 Despite its luxurious features and design, the EQS Sedan’s high initial price and some user complaints about its interface contributed to its depreciation.
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2022 Maserati Levante: -48.17% Depreciation | -$55,999 Value Lost
- Average Price New: $116,250
- Average Price Used: $60,251 The Levante’s styling and cabin quality issues likely contributed to its significant depreciation.
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2022 Audi e-tron GT: -48.07% Depreciation | -$58,832.50 Value Lost
- Average Price New: $122,400
- Average Price Used: $63,567.50 The e-tron GT’s high price and the availability of more practical EVs affected its value.
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2022 BMW iX: -47.41% Depreciation | -$39,443 Value Lost
- Average Price New: $83,200
- Average Price Used: $43,757 The iX’s depreciation may be due to its initial questionable styling decisions and subsequent feature upgrades.
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2022 Jaguar I-Pace: -47.36% Depreciation | -$33,107 Value Lost
- Average Price New: $69,900
- Average Price Used: $36,793 Jaguar’s reputation for fast depreciation and the I-Pace being the brand’s only EV at the time impacted its value.
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2022 Nissan Leaf: -46.29% Depreciation | -$14,999 Value Lost
- Average Price New: $32,400
- Average Price Used: $17,401 The Leaf’s lower range and the emergence of more competitive EVs in the market affected its depreciation.
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2022 Ford Mustang Mach-E: -46.13% Depreciation | -$24,422.50 Value Lost
- Average Price New: $52,945
- Average Price Used: $28,522.50 The Mach-E’s image issues among Mustang purists and Ford enthusiasts may have contributed to its depreciation.
Conclusion
For potential buyers, understanding which cars depreciate the fastest can inform decisions about whether to buy new or used. The listed models, while experiencing significant depreciation, can also present opportunities for buyers looking for good deals on used vehicles.
