I am considering buying a car. One of the requirements would be minimal depreciation. Between a luxury car and a standard model, which one will depreciate faster?
Depreciation is not directly linked to whether a car is a luxury model or a mainstream family (or “standard”) model. It has more to do with the reputation of the brand and how much the car was discounted when it was new. The bigger the discounts — whether from rebates, special finance rates, dealer price cuts or all the above — the less the car will be worth down the road.
Here are a few examples. The Automotive Lease Guide estimates a 2010 Lexus ES 350 will be worth 54 percent of its original value after three years and 44 percent after four years. ALG says a 2010 Toyota Camry will retain 50 percent after three years and 41 after four (using base models in all cases). But the numbers for a Cadillac CTS and a Chevrolet Malibu are virtually the same: 47 percent after three years and 38 percent to 39 percent after four. A Ford Fusion (51 percent after three years and 40 after four) will depreciate less than a Lincoln MKS (46 after three years and 36 percent after four), according to ALG.
You can find ALG’s residual values (estimates of what vehicles will be worth at the end of a lease) for 2010 models here. Residual values are used primarily to calculate lease prices and are a good predictor of depreciation.
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