Vehicle Depreciation Guide

New vehicles lose value the moment they're driven off the dealer lot — typically 15–25% in the first year. By year three, most vehicles have lost 30–45% of their original purchase price. By year five, depreciation has typically reached 50–60% of the original price. The rate slows significantly after year five as the vehicle transitions from 'recent used' to 'established used.' Three factors drive faster depreciation: high initial MSRP (luxury vehicles depreciate more dollars even when they hold percentage value reasonably well), poor reliability reputation (vehicles known for high maintenance costs depreciate faster as the market prices in future costs), and low demand (vehicles with limited appeal, discontinued models, or those in saturated segments depreciate faster). High fuel consumption is increasingly a depreciation accelerator as fuel prices rise.

Toyota and Lexus vehicles consistently lead long-term value retention data — the 4Runner, Tacoma, Land Cruiser, Tundra, and Sequoia are among the lowest-depreciation vehicles sold in North America. The Tacoma and 4Runner are exceptional outliers, sometimes selling used for prices very close to (or equal to) new — a function of limited supply, strong demand, and discontinuation pressure from other mid-size trucks. Jeep Wrangler and Ford F-150 Raptor also hold value exceptionally well in their respective categories. Pickup trucks as a category depreciate more slowly than cars of equivalent price. Luxury European vehicles (BMW, Mercedes, Audi) typically show the steepest depreciation in dollars — a $65,000 BMW 5 Series may be worth $32,000 in three years. This creates buying opportunities for used luxury vehicle buyers who let the first owner absorb the initial depreciation hit.