Depreciation by Make and Model: Which Cars Hold Value Best?

What is depreciation and why does it matter?

Depreciation is the difference between what you paid for the vehicle and what it's worth when you sell — and it's the single biggest cost of vehicle ownership, accounting for ~40% of all-in cost over the first 5 years (AAA Your Driving Costs 2024). On a $35,000 purchase, the difference between a low-depreciation vehicle (Toyota Tacoma at 30%) and a high-depreciation one (BMW 3-Series at 55%) is $8,750 over 5 years — about $146/month in stealth cost most people never see itemized on their budget.

The good news: depreciation is highly predictable. Brand, vehicle class, drivetrain, and trim level explain ~85% of the 5-year resale variance across the U.S. market (NADA 2024 + KBB residual value index).

What are the 5-year depreciation rates for the most-purchased U.S. vehicles?

5-year depreciation percentage (purchase MSRP vs. 5-year used trade-in value), per NADA + KBB 2024:

What patterns predict the best resale value?

Three patterns drive ~85% of the resale variance:

1. Brand reputation for reliability — Toyota, Honda, Subaru, and Mazda dominate the top of the chart. Lexus, the Toyota luxury arm, has similar depreciation. The reason: a 5-year-old Toyota carries lower buyer perception risk than a 5-year-old equivalent from a brand with mixed reliability data.
2. Vehicle class — pickup trucks + body-on-frame SUVs hold value best because they have long usable-life beyond 100k miles AND continue to find buyers in the work/utility market. Sedans depreciate fastest because demand for sedans has been declining for a decade.
3. Trim level — base + mid trims hold value better than fully-loaded top trims. The $4,500 leather + tech package on a new vehicle is worth ~$1,200 at year 5. The luxury features depreciate ~75% over 5 years while the base vehicle depreciates ~42%.

Why do luxury brands depreciate so fast?

Three reasons:

• Off-lease oversupply. Luxury vehicles are leased at 2–3× the rate of mainstream vehicles. The off-lease wave (3 years after the original sale) floods the used market with low-mileage, well-maintained luxury inventory, suppressing prices.
• Higher repair + parts cost. A $25,000 used BMW 3-Series carries a $2,400/yr maintenance cost (Repair Pal 2024) vs. $850/yr for a comparable used Honda Civic. Used buyers price that risk in.
• Faster technology obsolescence. Luxury vehicles ship with cutting-edge infotainment + driver-assist tech that becomes "outdated-feeling" within 4–5 years. Mainstream vehicles have simpler tech that ages more gracefully.

How does mileage affect depreciation?

For every 1,000 miles above the U.S. average of 13,500/yr × age, the vehicle's resale value drops about $200 on a sub-$30k vehicle and $350 on a $30–$60k vehicle (KBB 2024). So a 5-year-old vehicle with 75,000 miles is worth ~$1,750 less than the same vehicle with 67,500 miles (the on-pace number).

The penalty is non-linear: above 100,000 miles, the per-mile penalty jumps to $450–$650 because most buyers + dealers consider 100k a psychological threshold beyond which "you're buying an old car." Past 130,000 miles, depreciation effectively floors out — the vehicle has nearly reached its salvage residual.

What's the depreciation curve year-by-year?

Average across all vehicles (Edmunds 2024):

• Year 1: 20% drop (the famous "drive-it-off-the-lot" hit; most concentrated in the first 30 days)
• Year 2: +9% additional (cumulative 29%)
• Year 3: +8% additional (cumulative 37%)
• Year 4: +5% additional (cumulative 42%)
• Year 5: +5% additional (cumulative 47%)

This is why used-car buyers who target 3-year-old vehicles capture the steepest part of the depreciation curve (37% off MSRP) while still getting a vehicle with 80%+ of its usable lifespan ahead of it.

How do you actually use this in a buying decision?

Three steps:

1. Compute the 5-year cost difference. A $35k Toyota Tacoma at 30% depreciation = $10,500 lost. A $35k Hyundai Tucson at 49% = $17,150 lost. Even if the Tucson is $2k cheaper upfront, the Tacoma is a $5,000 net winner over 5 years.
2. Avoid the top luxury depreciators if you plan to sell within 5 years. BMW 3-Series, Mercedes C-Class, Audi A4 lose $19,000+ on a $35k purchase. Consider a Lexus or pre-owned-CPO equivalent instead.
3. Buy at year 3 to skip the steepest part of the curve. A 3-year-old Toyota RAV4 with 30k miles is worth $25,500 — about $11,500 less than new — and has 100k+ miles of useful life ahead.

Bottom line

Depreciation is the largest hidden cost in vehicle ownership. The 25-percentage-point spread between best and worst depreciators on a $35k purchase translates to $8,750 over 5 years. Use the patterns above (brand reliability, vehicle class, base/mid trim) to land on the resale-strongest version of whatever you're buying. For the full TCO picture, see our real cost of car ownership guide, and use the total-cost-of-ownership calculator to compare two candidates side-by-side.

Frequently asked questions

Which cars depreciate the least over 5 years?

Toyota Tacoma (30%), Honda Civic (32%), Toyota 4Runner (34%), Subaru Crosstrek (36%), and Toyota RAV4 (37%) are the top 5 lowest-depreciation vehicles in the U.S. market per NADA + KBB 2024. The pattern: Japanese brands with strong reliability reputations + utility vehicle classes (pickups + body-on-frame SUVs) that maintain value beyond 100k miles. Avoid mainstream sedans and luxury brands if depreciation is your primary concern.

Why do BMW and Mercedes lose value so fast?

Three reasons: (1) Off-lease oversupply — luxury vehicles are leased at 2–3× the mainstream rate, flooding the 3-year used market and suppressing prices. (2) Higher repair + parts costs — a used BMW 3-Series averages $2,400/yr in maintenance vs. $850/yr for a Honda Civic; used buyers price that risk in. (3) Faster tech obsolescence — luxury vehicles ship with cutting-edge tech that feels outdated within 4–5 years. A $35k BMW 3-Series loses $19,250 over 5 years (55% depreciation).

Does mileage matter more than age for depreciation?

Both matter, but the per-mile penalty kicks in non-linearly. Up to ~100,000 miles, every 1,000 miles above 13,500/yr × age costs ~$200 on a sub-$30k vehicle. Above 100k, the penalty jumps to $450–$650/1,000 miles because most buyers psychologically treat 100k as a threshold. Past 130k, depreciation floors out near the salvage residual. So if you drive 20,000 miles/year, expect a 2–3 year vehicle to look 'older' in the resale market than its model year suggests.

Should I buy a 3-year-old used car instead of new to skip depreciation?

Often yes — it's the single highest-leverage move in vehicle financial planning. Years 1–3 capture the steepest part of the depreciation curve (~37% off MSRP per Edmunds 2024). A 3-year-old vehicle with normal mileage has ~80% of its usable lifespan ahead of it. The math: a $25k new vehicle that would cost $12,800 in 3 years if you bought it new = $4,300/yr in depreciation. Buying it used at year 3 + selling at year 8 = $10,200 total depreciation, just $2,040/yr. Net savings: $11,300+ over 5 years for the same vehicle.

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Related on CarSavr

• CarSavr guides — the editor-curated hub page
• total cost of ownership calculator — free calculator
• Real Cost of Car Ownership by Vehicle Type (2026)

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