One reason new vehicle sales have struggled recently is the volume of cars and light trucks being returned following the expiration of their three-year lease terms. These vehicles — whether categorized as “almost new,” “gently used,” or “lightly used” — may be available for as much as 51% below the new car price.
Over a three-year lease term, an average vehicle loses about 34.5% of its new-car value, according to used-car industry researchers at iSeeCars.com. The researchers analyzed more than 5.8 million sales to identify models with the greatest loss in value after three years when most leased cars enter the used car market and came up with a list of the 11 best bargains on “almost new” cars.
iSeeCars CEO Phong Ly said:
[T]he fact that auto leases have risen 91 percent in the last five years means a boon for shoppers who want a late-model car at a bargain price. While some of the Best Bargains we identified are leased more than others, they all have the most depreciation after three years and they’re great buying opportunities when you look at the data.
Here is the iSeeCars list of the 11 best bargains, along with the average price, percentage depreciation and the depreciation ratio compared to an average score of 1. Note that, all things equal, the higher the used car’s depreciation, the more you save compared to buying a new vehicle.
- Cadillac CTS: $27,537 average price; 51.4% depreciation; 1.49× compared to average
- Cadillac ATS: $21,173; 50.4%; 1.46×
- Mercedes E-Class: $33,727; 48.4%; 1.4×
- Mercedes C-Class: $23,212; 48.3%; 1.4×
- BMW 5 Series: $33,474; 48%; 1.39×
- Nissan Maxima: $18,867; 47.9%; 1.39×
- BMW 3 Series: $24,821; 46.9%; 1.36×
- Infiniti Q50: $24,956; 46.9%; 1,36×
- Volkswagen Jetta: $13,033; 46.4%; 1.34×
- Ford Fusion: $15,140; 45.1%; 1.31×
- Ford Focus: 11,853; 45%; 1.3×
Luxury brands took the top five spots, and seven spots altogether, in the rankings. Ly noted:
Luxury brands are known for depreciating at a higher rate because they’re often leased to keep monthly payments down, so this helps create a constant influx of 3-year-old vehicles in the used car market, driving prices lower.
The research also indicates that buying a three-year-old pickup truck is probably not a particularly good option. Pickups are in high demand now and that keeps prices high. And because owners keep the trucks longer than average, there are fewer available and that also serves to maintain their value.
According to iSeeCars, a three-year-old Ford F-150 has an average selling price of $27,122, which pencils out to 30.8% depreciation at a rate of just 1.08 times the average. Average depreciation over three years for all trucks is just 28.5%.
Visit the iSeeCars website for more details and the rankings for used SUVs.