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The 5 cars that lose value fastest — and the 5 that hold it best over time

"You might like that flashy car ... but if it depreciates quickly, that's money out of your pocket."

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New cars start to lose their value as soon as you drive them off the lot, but certain models depreciate faster than others.

How well a car holds its value should factor in your decision if you're shopping for a new ride, says Matt DeLorenzo, senior managing editor for Kelley Blue Book: "You might like that flashy car with lots of options and a high sticker price, but if it depreciates quickly, that's money out of your pocket."

You could get much less money than expected if you later want to sell or trade in that car. If you financed the purchase, quick depreciation can also mean you owe more on your loan than the car is worth. That leaves you on the hook for the difference if your car is stolen or totaled, or even if you just want to trade it in to buy a new vehicle.

"Having more value in your car than your outstanding loan balance gives you leverage when it comes time to trade or sell," he says.

To find which models depreciate fastest and slowest, iSeeCars.com analyzed more than 800,000 car sales from the 2016 model year that were then resold between January and August 2021. Using inflation-adjusted figures, researchers at the automotive website found the lowest and highest loss in value of the vehicles' manufacturer suggested retail price after five years. During the time, the cars lost an average 40% in value.

Here are the cars that hold their value best and least well, according to the iSeeCars.com analysis.

Top 5 cars that lose value fastest

5. BMW X5
Average five-year depreciation: 60%         
Depreciation in dollars: $41,950

4. Maserati Ghibli
Average five-year depreciation: 61%         
Depreciation in dollars: $51,659

3. BMW 7 Series        
Average five-year depreciation: about 61%         
Depreciation in dollars: $63,271

2. BMW i3
Average five-year depreciation: 63%         
Depreciation in dollars: $32,663

1. Nissan LEAF
Average five-year depreciation: 65%         
Depreciation in dollars: $23,666

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Top 5 cars that hold value best

5. Toyota Tundra
Average five-year depreciation: 19%        
Depreciation in dollars: $8,458

4. Toyota Tacoma
Average five-year depreciation: 14%         
Depreciation in dollars: $4,899

3. Porsche 911
Average five-year depreciation: 13%         
Depreciation in dollars: $20,710

2. Jeep Wrangler Unlimited
Average five-year depreciation: about 10%         
Depreciation in dollars: $3,810

1. Jeep Wrangler
Average five-year depreciation: 9%           
Depreciation in dollars: $2,796

How to predict your car's depreciation rate

Thanks to the global microchip shortage and a hot market for used cars, "depreciation is less of an issue now than in a more normal market with plenty of new and used cars competing for a limited pool of buyers," says DeLorenzo.  

Still, it's smart to understand the concept and how it could affect you, especially if you plan to sell. For drivers trading in or otherwise getting rid of their ride after a few years, a "brand new car that has a slower rate of depreciation can put more money in your pocket for your next car purchase," iSeeCars executive analyst Karl Brauer wrote in the report.

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Auto insurers and sites including Edmunds, KBB, and iSeeCars offer calculators to help drivers estimate the long-term cost of ownership, including depreciation.

There are two driving factors when it comes to a car's value decline, DeLorenzo explains: wear and tear on the vehicle and the fact that "newer versions of the same or competing products come onto the market, which in turn depresses the value of the older product."

DeLorenzo says there are a few tells that a car will better hold its value: "A more conservative car with classic styling and a good reputation for reliability, dependability, quality, and good resale value will cost you less in the long run."

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