Owning the right used vehicle can mean several thousand dollars difference in resale value, according to a recent report.
In determining which models hold their value the most, the vehicle research site iSeeCars.com analyzed more than 3 million used cars sold in 2022 that were three and five years old. In this article, I’ll focus on the five-year-old vehicles.
How Much Value Does the Average Car Lose After the First 5 Years?
The average five-year-old car lost 33.3% of its value from the manufacturer’s suggested retail price (MSRP), according to the report. That is a 17% drop in depreciation compared to last year.
“The relative scarcity of late-model used cars due to pandemic-related new car production disruptions has kept used car values high for more than a year,” Karl Brauer, executive analyst for iSeeCars, says in the report.
Let’s take a look at the vehicles that have depreciated the least, according to iSeeCars.com.
These Cars Are Holding Their Value the Most Right Now
|Jeep Unlimited Wrangler||8.7%||$3,344|
|Average for all vehicles||33.3%||$14,049|
Money expert Clark Howard wants you to jump into this crazy car market only if you absolutely have to. Otherwise, until things get more stable, he suggests that you keep the car you have and make any needed repairs.
If you must buy a vehicle, Clark remains a big fan of buying used cars because the first owner will take the brunt of the depreciation in the first few years.
“I’ve had an obsession forever about why buying a used vehicle is so much better for your wallet than buying new,” Clark says. “For most people, buying used is going to be a much better choice.”
But there is an exception, Clark says:
“If you can buy that three-year-old vehicle for a third less than what a new one would be, then go ahead and buy the three-year-old used vehicle,” Clark says. “On the other hand, if the gap is less than that, that would push you more toward buying a new one.”