What is a short way to size up the car market over the past year? iSeeCars Executive Analyst Karl Brauer put it this way:
We’ve seen record high used car prices over the past 15 months as a result of the microchip shortage, and that has slowed down the average depreciation rate across all vehicles. Vehicles that have historically maintained their value well have depreciated even less this past year, but even in today’s market some cars continue to drastically drop in value.
Car prices, both used and new, have skyrocketed in the past year for several reasons. Among them is pent-up demand. Dealerships were closed for weeks, and sometimes months, due to the COVID-19 pandemic. More recently, the supply of cars has plummeted, due in part to a severe shortage of the semiconductors used in car electronics systems. This shortage will not let up until next year. In the meantime, many dealers are nearly empty, and manufacturers have had to shutter some assembly lines.
The reason for used car price spikes is simple. People who do not want to wait for the latest make and model of the cars they want buy them used instead. Yet, not all cars hold their value well over time, despite this surge in demand.
For its “Top 10 Cars That Hold Their Value Best: Five-Year-Car Depreciation Across All Vehicle Segments” study, research and car sales company iSeeCars reviewed over 8.2 million car sales to identify vehicles from the 2016 model year with the lowest and highest loss in value from manufacturer’s suggested retail price after five years.
The average across all vehicles considered was a decline of 40.1%.
The car with the lowest five-year depreciation is the Jeep Wrangler at only 9.2%. Bauer points out:
Jeep earns the top two spots on the list, with the Jeep Wrangler having the lowest depreciation followed by its four-dour counterpart, the Jeep Wrangler Unlimited in second. Jeep Wranglers are known for retaining their value due to their enthusiastic fanbase, as well as their durability and performance across all terrains, especially off-road. Jeep Wranglers also have maintained their iconic design, so even older models don’t appear dated.
The next vehicle on the list is a Jeep as well. The five-year depreciation rate of the Jeep Wrangler Unlimited is only 10.5%.
These 10 cars depreciated the least in the past five years:
|Jeep Wrangler Unlimited||10.5%||$3,810|