There will always be a market for luxury cars, but with a high price comes increased risk in the form of vehicle depreciation. A new car that loses its value faster than its rivals costs the owner more financially when the car is traded in or sold. Even worse, a car owner with a long-term loan may end up owing more than the car is worth. Fortunately, some models depreciate less than others. Here are the ones worth considering.
Porsche Debuts the New 718 Boxster S
The value of a car decreases by at least 10% as soon as you drive it off the lot.
The Lexus LS 500 received the KBB Best Resale Value Award for Luxury Cars in 2021. That is because there are plenty of second-generation owners willing to pay for the pleasure of owning a superb luxury car. Although there is also a hybrid version (the LS 500h), the gasoline-powered LS 500 commands better resale value. The Lexus 500 is roomy inside with leather and a high-tech interior. The car has a 416-horsepower turbocharged V6 engine with a 10-speed automatic transmission. There are enhancements available such as air suspension, massaging seats, a 23-speaker Mark Levinson audio system, and four-zone climate control. According to AutoPadre, the 2020 Lexus LS 500 has a five-year estimated depreciation rate of 50%.
The 2021 Audi A7 has a five-year estimated depreciation rate of 28% of its original sticker price, according to Kelley Blue Book. The model has a four-cylinder, 335-horsepower V6 engine. It is a liftback sedan so it also has usable cargo space. The BMW 8 Series Gran Coupe and Porsche Panamera are both luxury liftbacks but are priced significantly higher.
Porsche is consistently recognized for leading in resale value. Porsche has built its reputation on the iconic 911 and the more recent 718 Boxster and Cayman. For the 2021 Best Resale Value Awards from Kelley Blue Book, the Macan won the compact luxury SUV segment. The larger Cayenne finished second in the large luxury SUV category. The Porsche 911 retains 57.5% of its value, the 718 Boxter/Cayman retains 58.7% of its value, and the Macan retains 62.4% of its value. Porsche has an electric sedan, the Taycan sedan, which took third in the EV category for resale value.
According to Motortrend, the BMW X4 retains 51% of its value at resale. The X4 is characterized by its coupe-like roofline, which took some critics a little while to get used to. It has a four-cylinder engine with 248 horsepower. The X4 M40i has an inline six-cylinder engine and a maximum output of 382 horsepower. Motortrend expects the X4 to hold its value as well as or better than most of its competitors.
The 2021 Mercedes-Benz GLC 2021 is a luxury compact SUV and depreciates at a rate of 50.7% of its resale value, according to Motortrend. The GLS won the 2017 SUV of the Year competition by Motortrend. The car has either a 362-hp turbocharged inline-six or a 483-hp twin-turbo V8, both of which have a hybrid-assistance system. Competitor SUVs are the Land Rover Range Rover and the Lincoln Navigator.
The Audi Q5 retains 51% of its value, according to Motortrend. The Q5 was Audi's best-selling model before 2018, but it received a full redesign that year, moved to a new platform, and received upgrades all around. The Audi Q5 has a two-liter four-cylinder and 261 horsepower engine.
Few electric vehicles have strong resale value, but Tesla is the exception. The vehicle has a range of 390 miles, a top speed of 200 mph, and 1,020 peak horsepower. According to Green Car Reports, the average Tesla Model S, in 2017, had only a 17.1% depreciation rate.
The Bottom Line
When buying a luxury car, it's next to impossible to leave the lot without experiencing significant depreciation. But with the right purchase, you can keep the loss to a minimum over the years and enjoy driving a fine automobile in the meantime. When it comes to making that purchase, it pays to do your research.