10 Cars That Lose Half Their Value in Just 3 Years
For many car consumers, the question is whether to buy or lease a vehicle. On one hand, leasing a new model simplifies your life by limiting the amount you owe and eliminating the hassle of selling. However, leasing a vehicle also means you do not retain that equity. Unless you choose the purchase option, it’s simply a long-term rental, and typically only makes financial sense in a situation like temporary job relocation.
If your priority is getting the best value from a car purchase, your job gets a little easier. According to a July 2017 report by iSeeCars.com, many leased cars failed to retain 55% of their value after just three years. In other words, those who swoop in for a pre-owned model could save $25,000 or more on an almost-new vehicle. Considering the limited mileage involved with most leases, the terms can be quite appealing.
Car shoppers looking for a German luxury sedan should definitely consider a lightly used model over its brand-new twin on the dealer’s lot. Likewise, popular cars by Ford and Volkswagen offered consumers excellent deals after three-year leases ended. Let’s take a closer look at 10 cars that lost close to half their value after a brief time on the road.
10. Ford Fusion
Consumers who like the styling of the latest Ford Fusion should start their search with the 2014 model or later. That was one year after the redesigned model made its debut and when the first cycle of three-year leases began. The iSeeCars research showed a ’14 Fusion lost 45.1% of its value ($15,140) on the used market in 2017. Instead of paying close to $30,000 for a high-trim Fusion, a savvy buyer could snatch the same model for nearly half the price. The same applies for a ’14 Focus, which also shed 45% of its value in three years.
9. Volkswagen Jetta
There are some drawbacks to buying a car a few years after it was new. For example, Volkswagen offers a warranty that only covers a new Jetta for three years. However, the powertrain continues to be covered for five years, so you know you can avoid costly engine repairs for that period. Meanwhile, Jetta buyers who pounce after the lease ends can get a 2014 edition for 46.4% ($13,033) less than the original sticker price. Even for a car that ranks poorly on reliability, you can make a strong financial case for this purchase.
8. Infiniti Q50
Consumers looking for an entry-level luxury model can clean up on the used market. In this segment, three-year leases are common, and it’s hard to tell the difference from one year to another until you check the window sticker. For example, the Infiniti Q50 sedan starts around $34,000 and averages close to $50,000 for the model featuring 300 horsepower (aka, the one you want). On the used market, iSeeCars found a ’14 Q50 going for an average of $25,000 in 2017 — a fat 46.9% off the original price.
7. BMW 3 Series
German luxury cars always make sense for used car shoppers. For starters, you will find the driving experience undiminished after such a short time. As far as your finances go, you can steal one for a fraction of the price. After a three-year lease of a BMW 3-Series sedan, the data showed this model selling for $24,821 (46.9%) less on the used market. Actually, you don’t have to wait that long if you want a late-model Bimmer in your driveway. Previous iSeeCars research revealed the 3-Series had the highest percentage of owners bailing one year after purchase.
6. Nissan Maxima
In the case of the 2014 Nissan Maxima, buyers found themselves with an outdated car at the end of their three-year lease. The redesigned Maxima entered the market as a 2016 model and received solid reviews from nearly every auto publication. Yet the outgoing model was no slouch, either, and scored high (four of five stars) on overall quality in J.D. Power rankings. Used car shoppers can find that very model for 47.9% ($18,867) less on the market in 2017.
5. BMW 5 Series
A new BMW 5 Series sedan easily breaks $60,000 with a reasonable amount of options added. But after three years and about 30,000 miles, consumers who want a midsize luxury mainstay enjoy savings of 48% ($33,474) on the used market. That brings down the pre-owned price to about $35,000. It may not be the latest, greatest thing from Munich, but we’re probably not the only ones who have a hard time telling a 2015 from a “next-gen” 2016 5-Series.
4. Mercedes-Benz C-Class
To get into a bona fide Benz — and we don’t mean the overpriced CLA class — you will plunk down over $40,000 and watch that value drain away quickly. Just one year later, you might see the same car fetch 20% less on the used market. If you opted for a three-year lease then bought the car, you might see as much as $23,212 (48.3 %) skimmed off the top of the original MSRP. Smart buyers will buy the same C-Class sedan with 30,000 miles on the odometer for half the price.
3. Mercedes-Benz E-Class
The higher the price of the luxury sedan, the more you save on a purchase three years later. As far as the German brands go, no vehicle had higher depreciation than the Mercedes E-Class sedan. After a 36-month lease, buyers could nab an E350 for $33,727 (48.4%) off the original price. For one of the safest and most recognizable luxury cars on the market, you could do much worse for a $65,000 car. In Consumer Reports rankings of the 2014 luxury models, E-Class scored best in reliability among German models.
2. Cadillac ATS
After running the numbers for the study, iSeeCars.com found two cars that actually depreciated over 50% following a three-year lease. The first of two was the 2014 Cadillac ATS, a sedan that typically carried a new-car price of $42,340. Just a few years later, used car shoppers could snatch up this ride for $21,175 (50.4%) less than its MSRP. You won’t find this car’s cramped dimensions changed once the lease ends, but you will find yourself a reasonable price if the back seat won’t be of much use to you.
1. Cadillac CTS
If you’re shopping strictly for the amount of American-made content in a luxury sedan, Cadillac CTS is tops on the market. However, it was the worst vehicle on the U.S. market in terms of depreciation after a three-year lease. The iSeeCars research showed CTS dropping 51.4% of its value (a total of $27,537) over that time. Any wise consumer who must have a Cadillac would make their move a few years after these models roll off the lot. Buying new will mean watching your investment fade away fast.