Best Bargains on Lightly-Used Cars

By Julie Blackley

Cars with highest three-year depreciation provide bargains for used car shoppers

As the number of off-lease vehicles reaches record highs, a new study by car search engine iSeeCars.com reveals which lightly-used cars present the best deals for consumers. While the average vehicle depreciates 38.2 percent after three years, these highest-depreciating vehicles lose more than half of their value, resulting in significant savings for consumers opting to buy a three-year-old vehicle in favor of a new one.

“The rising popularity of auto leases in recent years has led to an influx of cars coming off lease that are deeply discounted and provide bargains for used car shoppers,” said iSeeCars CEO Phong Ly. “Some of these bargains present good opportunities for consumers as reliable vehicles that are discounted because they simply aren’t as popular in their segments.”

iSeeCars.com analyzed more than 4.8 million car sales to identify models with the greatest loss in value after three years when most leased cars enter the used car market. The automotive research firm identified the top 10 vehicles, which all depreciated more than 1.4 times the 38.2 percent average for all vehicles.

iSeeCars 10 Best Bargains on Lightly-Used Vehicles*
Rank Car Avg. 3-Year-Old Used Price % Depreciation Depreciation Compared to Average
1 Acura RLX $28,259 55.8% 1.5x
2 Lincoln MKZ $19,855 55.6% 1.5x
3 Mercedes-Benz E-Class $31,051 55.4% 1.5x
4 Jaguar XF $30,268 54.8% 1.4x
5 Cadillac XTS $26,306 54.5% 1.4x
6 Lincoln MKZ Hybrid $20,034 54.5% 1.4x
7 Kia K900 $26,522 54.4% 1.4x
8 BMW 5 Series $30,203 53.8% 1.4x
9 Cadillac CTS $26,785 53.8% 1.4x
10 Audi A6 $29,941 53.3% 1.4x
Average for All Vehicles 38.2%
*Excludes Luxury Cars over $80,000 New and Electric Vehicles

Download Table

The entire list is comprised of luxury sedans, with midsize cars accounting for seven vehicles and large cars making up the rest. Imports narrowly edge out domestic vehicles by a ratio of six to four. Of the ten vehicles on the list, the average cost savings for the lightly-used vehicles compared to their new versions is $32,375.

“Luxury brands are often leased, which creates a surplus of these three-year-old luxury vehicles in the used car marketplace without an equal amount of demand,” said Ly. “Given the heightened demand for SUVs, which account for a higher share of used car inventory than ever before, luxury sedans are less sought after and have to come down significantly in price to attract used car buyers.”

Earning the top spot is the Acura RLX large luxury car, which loses 55.8 percent of its value after three years. “With an average new car starting price of $62,658, shoppers who opt for a three-year-old Acura RLX can save a whopping $34,000 by purchasing a used version at $28,259,” said Ly. “Although the RLX has favorable overall ratings and many standard safety features, it doesn’t stand out in the competitive class of large luxury cars due to possible reasons such as lower grade interior materials and lackluster handling.”

Two additional large luxury cars that make the list include the fifth-ranked Cadillac XTS and the seventh-ranked Kia K900. “The Cadillac XTS lags behind its competitors and draws criticism for its below-average reliability and complicated infotainment system,” said Ly. “Meanwhile, the Kia K900 earns favorable ratings and has a powerful engine, but shoppers at that price point might opt for a luxury marque rather than a Kia.”

Seven midsize sedans round out the top ten list including the second-ranked Lincoln MKZ, the third-ranked Mercedes-Benz E-Class, the fourth-ranked Jaguar XF, the sixth-ranked Lincoln MKZ Hybrid, the eighth-ranked BMW 5 Series, the ninth-ranked Cadillac CTS, and the tenth-ranked Audi A6.

Of the midsize sedans, three are from domestic automakers. “The Lincoln MKZ and its hybrid variant are reliable vehicles that provide shoppers with standard features such as a rearview camera, rear parking sensors, and a built-in garage door opener at a savings of over $20,000 when purchased lightly-used,” said Ly. “These vehicles are among the more affordable vehicles in their class so their interiors might not feel as luxurious as their competitors, which may detract some auto buyers while also appealing to more practical ones.” Similar to the XTS, the Cadillac CTS also has the same infotainment and reliability concerns.

The four foreign luxury midsize vehicles that round out the list are among the more expensive vehicles and are also known for having high operating costs. “In addition to their expensive upfront costs, Jaguars and German vehicles in general are notorious for their high repair costs, which contribute to their steep depreciation,” said Ly. “But cars from Mercedes-Benz, BMW, and Audi continue to be popular due to the allure of their upscale interior, drive quality, and list of features and shoppers looking at used versions of these models don't have to contend with as much of a luxury premium."

Best Bargains Under $20,000

iSeeCars.com also examined the list for cars currently priced under $20,000 to determine the most affordable bargains ideal for new drivers and graduates.

iSeeCars Best Used Car Bargains Under $20,000
Rank Car Avg. 3-Year-Old Used Price % Depreciation Depreciation Compared to Average
1 Lincoln MKZ $19,855 55.6% 1.4x
2 Kia Cadenza $19,508 50.2% 1.3x
3 Ford Fusion Hybrid $14,844 49.7% 1.3x
4 Chevrolet Impala $17,745 49.4% 1.3x
5 Kia Optima Hybrid $16,381 49.2% 1.3x
6 Fiat 500L $13,403 49.1% 1.2x
7 Ford Taurus $17,587 48.7% 1.2x
8 Volkswagen Tiguan $16,235 47.7% 1.2x
9 Fiat 500 $11,469 47.2% 1.2x
10 Hyundai Sonata Hybrid $16,303 47.0% 1.2x
Average for Comparably Priced Vehicles 39.3%
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The list includes a mix of vehicles including four midsize cars, three large cars, and one vehicle in each of the compact car, subcompact car, and compact SUV categories.

Joining the top-ranked midsize Lincoln MKZ sedan are three midsize hybrids including the third-ranked Ford Fusion Hybrid, the fifth-ranked Kia Optima Hybrid, and the tenth-ranked Hyundai Sonata Hybrid. “New hybrid vehicles are more expensive than their non-hybrid counterparts with the Kia Optima Hybrid costing an additional $4,303,” said Ly. “However, there isn’t a high demand for these hybrid vehicles, and their steep depreciation brings their resale value close to that of their non-hybrid versions. For example, the average price of a three-year-old Fusion Hybrid is only about $200 more than a gasoline-powered Fusion, making the fuel savings more valuable.”  The non-hybrid versions of these vehicles also depreciate at an above-average rate which reflects the broader trend that sedans are declining in popularity.

The three large cars include the second-ranked Kia Cadenza, the fourth-ranked Chevrolet Impala, and the seventh-ranked Ford Taurus. “The Kia Cadenza is among the top vehicles in its class according to Consumer Reports, but it is also among the most expensive so it has to steeply depreciate to be attractive to used car buyers,” said Ly. “Meanwhile, the Ford Taurus has recently ceased production while the Chevrolet Impala will be discontinued in 2020, due to lower demand for these vehicles as the sedan segment continues to wane.”

Two Fiats make the list, including the sixth-ranked Fiat 500L compact car and the ninth-ranked Fiat 500 subcompact. “The Fiat 500L has poor reliability and safety ratings, while the Fiat 500 is one of the more expensive vehicles in its class despite having the smallest amount of passenger room and poor safety scores,” said Ly. “As the lowest-priced vehicles on the list, these vehicles might be attractive options for city drivers on a budget.”

Rounding out the list is the lone SUV on the list, the eighth-ranked Volkswagen Tiguan. “The Volkswagen Tiguan boasts a good projected reliability rating and offers more cargo and passenger space than other compact SUVs with a third row of seats that is rare for the segment,” said Ly. “Its long list of standard features makes it one of the more expensive vehicles in its class, which leads to its above-average depreciation.”

Bargains on Almost-New SUVs

iSeeCars.com also identified the top 10 SUVs, which had at least 1.2 times greater depreciation than the average SUV depreciation of 37.9 percent, or a loss in value of 46.9 percent to 50.8 percent.

“With more three-year-old SUVs entering the used car marketplace than ever before, there are lots of deals to be had in this popular segment,” noted Ly.

iSeeCars Best Bargains On Lightly-Used SUVs
Rank Car Avg. 3-Year-Old Used Price % Depreciation Depreciation Compared to SUV Average
1 Lincoln Navigator L $37,905 51.6% 1.4x
2 INFINITI QX80 $38,869 49.1% 1.3x
3 Lincoln MKT $28,441 49.0% 1.3x
4 Ford Expedition $30,874 48.7% 1.3x
5 Lincoln Navigator $38,426 48.1% 1.3x
6 Lincoln MKC $23,006 48.0% 1.3x
7 Buick Enclave $26,021 47.8% 1.3x
8 Volkswagen Tiguan $16,235 47.7% 1.3x
9 BMW X5 $37,196 47.7% 1.3x
10 INFINITI QX60 $28,993 46.9% 1.2x
Average for All SUVs 37.9%
Average for All Vehicles 38.2%
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Luxury vehicles dominate the list of SUVs that depreciate the most, outnumbering non-Luxury models eight to two. Domestic vehicles account for the majority of the list with six models.

Lincoln accounts for the most SUVs on the list with four including the top-ranked full-size Lincoln Navigator L, the third-ranked Lincoln MKT midsize SUV, the fifth-ranked full-size Lincoln Navigator, and the sixth-ranked compact Lincoln MKC. Joining the Lincoln SUVs as the other domestic luxury SUV is the seventh-ranked midsize Buick Enclave. “These SUVs are ranked highly in their respective classes but aren’t as popular as their more luxurious competitors,” said Ly. “As a result, their demand might not be as high, which provides value for used car shoppers who are interested in a dependable luxury SUV.”

Fourth on the list is the Ford Expedition, which shares the same manufacturer as Lincoln and is built on the same platform as the Lincoln Navigator. “Full-size SUVs are priced like luxury vehicles so they may take a large depreciation hit for similar reasons,” said Ly. “The Ford Expedition is at the top of its class in terms of reliability and value, which makes it an attractive option for used car shoppers looking for an enduring family vehicle.”

Three foreign luxury SUVs join the non-luxury Volkswagen Tiguan on the list including the second-ranked full-size INFINITI QX80, the ninth-ranked midsize BMW X5, and the tenth-ranked midsize INFINITI QX60. “The BMW X5 earns stellar ratings, but is one of the more expensive vehicles in its competitive class,” said Ly. “Conversely, the INFINITI QX80 and the INFINITI QX60 are among the less expensive vehicles in their respective classes, and while the QX80 is ranked among the top of its class according to U.S. News and World Report, the QX60 has below average reliability ratings.”

Bargains on Almost-New Pickup Trucks

The average three-year depreciation for pickup trucks is 32.5 percent, which is the lowest across all vehicle segments. iSeeCars found that only four of the 10 pickups examined depreciated at a higher-than-average rate.

iSeeCars Best Bargains On Lightly-Used Pickup Trucks
Rank Car Avg. 3-Year-Old Used Price % Depreciation Depreciation Compared to Pickup Average
1 Nissan Titan XD $33,097 45.9% 1.4x
2 Ram Pickup 1500 $27,826 37.1% 1.1x
3 Ford F-150 $29,651 34.7% 1.1x
4 GMC Sierra 1500 $33,088 34.2% 1.1x
Average for Pickup Trucks 32.5%
Average for All Vehicles 38.2%
Download Table

“The Nissan Titan XD is the most expensive pickup in its class, with an average new car price of $59,684, which is almost $9,000 more than the second-most expensive model, the GMC Sierra 1500,” said Ly. “The Titan XD has to significantly come down in price to make it competitively priced with the other trucks in its segment that have better reliability ratings such as the GMC Sierra 1500 and the Ford F-150.”

Bargains on Almost-New Electric Vehicles

iSeeCars examined the depreciation of electric vehicles and found that the average for the segment is 56.6%, which is nearly 1.5 times greater than the average for all vehicles. “Categorically, electric vehicles depreciate more than the average vehicle because resale values take into account the $7,500 federal tax credit and other state and local credits that were applied to these vehicles when they were bought new,” said Ly. “Because the technology of EVs changes at a rapid pace, obsolescence also plays a role in their dramatic depreciation as well as consumer range anxiety and lack of public charging infrastructure.”

iSeeCars Comparison of Depreciation for 3-Year-Old Electric Vehicles

Rank

Car

Avg. 3-Year-Old Used Price

% Depreciation

Depreciation Compared to EV Average

1

Fiat 500e

$10,358

69.7%

1.2x

2

BMW i3

$19,784

63.3%

1.1x

3

Nissan LEAF

$14,070

59.6%

1.1x

4

Volkswagen e-Golf

$13,758

58.1%

1x

5

Ford Fusion Energi

$15,983

57.7%

1x

Average for Electric Vehicles

56.6%

6

Kia Soul EV

$15,325

56.5%

1x

7

BMW i8

$73,242

53.9%

1x

8

Hyundai Sonata Plug-In Hybrid

$17,902

53.7%

0.9x

9

Chevrolet Volt

$18,240

52.8%

0.9x

10

Tesla Model S*

$57,517

17.1%

0.3x

Average for All Vehicles

38.2%

* Tesla Model S new car prices estimated from Tesla's 2016 quarterly shareholder updates

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The electric vehicle that depreciates the most after three years is the Fiat 500e, with nearly a 70% price drop. “When looking at average prices, a consumer could purchase three lightly-used Fiat 500e models for the price of a new version of the vehicle,” said Ly.

The other electric vehicles that depreciate more than average after three years include the BMW i3, the Nissan LEAF, the Volkswagen e-Golf, and the Ford Fusion Energi. “The average price of a new BMW i3 is $55,204, which is high for an electric car,” said Ly. “Similarly, the Nissan LEAF and Volkswagen e-Golf are above $30,000, which is a high price for the small car segment.”

While the average electric vehicle is subject to steep depreciation, the Tesla Model S bucks that trend with a depreciation at 17.1%, which is just one-third of the average for electric vehicles. "The Tesla Model S is in high demand, which is likely the result of low supply and its over-the-air updates that keep the vehicle current,” said iSeeCars CEO Phong Ly.

Bargains on Almost-New Luxury Vehicles over $80,000

iSeeCars analyzed the luxury vehicles with new car average prices over $80,000 and found that the average for the segment is 41.3%.

“Given their high new car starting prices, these vehicles take a significant depreciation hit because consumers shopping in the used car market don’t value the luxury features as much as those in the new car market,” said Ly. “When comparing the new car prices to the three-year-old used car prices of the top bargains in the segment, the average cost savings is over $56,000.”

iSeeCars Best Bargains On Lightly-Used Luxury Vehicles Over $80,000
Rank Car Avg. 3-Year-Old Used Price % Depreciation Depreciation Compared to Segment Average
1 BMW 6 Series $45,293 56.1% 14x
2 Maserati Ghibli $37,422 55.8% 1.4x
3 Maserati Quattroporte $54,449 55.5% 1.3x
4 Jaguar XJ $40,355 54.4% 1.3x
5 BMW 7 Series $50,082 54.2% 1.3x
6 Audi A8 L $42,659 53.8% 1.3x
7 BMW M6 $62,413 52.2% 1.3x
8 BMW M5 $59,812 51.5% 1.2x
9 Jaguar XJL $47,428 50.5% 1.2x
10 Mercedes-Benz CLS $42,088 50.1% 1.2x
Average for Vehicles Over $80,000 41.3%
Average for All Vehicles 38.2%
Download Table

The list consists exclusively of imported vehicles. German manufacturers comprise the majority of the list with six models including the top-ranked BMW 6 Series, the fifth-ranked BMW 7 Series, the sixth-ranked Audi A8L, and the tenth-ranked Mercedes-Benz CLS. “These vehicles are often leased, so there is a high supply of them in the secondary marketplace,” said Ly. “German luxury vehicles tend to be priced lower on the used car market to help offset their expensive repair costs.”

Two Jaguar models make the list including the fourth-ranked Jaguar XJ and its counterpart with a longer wheelbase, the ninth-ranked Jaguar XJL. “Jaguars are notorious for their high ownership costs, which can be unsettling for used car buyers,” said Ly.

A pair of Maseratis round out the list including the second-ranked Ghibli and the third-ranked Quattroporte. “The Maserati brand has been plagued by reliability concerns, which could lessen demand for their cars and cause luxury used car buyers to opt for a brand that is more dependable,” said Ly.

Best Used Car Deals by Metro Area

iSeeCars further analyzed the data to determine the vehicles with the highest three-year depreciation in the top 20 populous metro areas.

Best Bargains on Lightly-Used Cars By Metro Area
DMA Car Avg Used Car Price % Depreciation
Atlanta, GA Kia K900 $28,063 57.2%
Boston, MA-Manchester, NH Mercedes-Benz E-Class $31,445 56.0%
Chicago, IL Kia K900 $28,149 57.5%
Cleveland-Akron (Canton), OH Lincoln MKZ $18,961 57.5%
Dallas-Ft. Worth, TX Mercedes-Benz E-Class $29,128 57.2%
Denver, CO Mercedes-Benz E-Class $29,567 58.0%
Detroit, MI Lincoln MKZ $19,156 57.7%
Houston, TX Mercedes-Benz E-Class $29,583 57.0%
Los Angeles, CA Lincoln MKZ $19,071 58.1%
Miami-Ft. Lauderdale, FL Volvo V60 $19,241 60.4%
Minneapolis-St. Paul, MN Volvo V60 $20,414 56.8%
New York, NY Mercedes-Benz E-Class $30,105 57.2%
Orlando-Daytona Beach, FL Volvo S60 $18,571 58.1%
Philadelphia, PA Cadillac XTS $25,730 55.9%
Phoenix, AZ Kia K900 $20,970 60.8%
Sacramento-Stockton-Modesto, CA INFINITI Q70 $16,900 58.6%
San Francisco-Oakland-San Jose, CA Lincoln MKZ $18,998 57.6%
Seattle-Tacoma, WA Kia K900 $27,140 56.3%
Tampa-St Petersburg (Sarasota), FL Kia K900 $24,854 57.3%
Washington, DC (Hagerstown, MD) Acura RLX $26,375 57.1%
The Kia K900 and the Mercedes-Benz E-Class tie as the highest-depreciating vehicle in the most metro areas with five.

For consumers who are making a vehicle purchase, it is important to understand the types of cars that are available within their budget and to anticipate how long they plan on keeping the vehicle. “If you want to save money, purchasing a car that has already lost most of its depreciation is a smart economic decision,” said Ly.  “Conversely, if you are purchasing a new vehicle and plan on turning it in after a few years, consumers might want to avoid the vehicles on this list.”

Methodology

iSeeCars.com analyzed more than 3.7 million new cars from model year 2016 sold between January and May 2016, and more than 1.1 million used cars from the same model year sold between January and May 2019. Prices from 2016 were inflation-adjusted to 2019 dollars, based on data from the US Bureau of Labor Statistics. The difference in average price for the same model across the two time periods was calculated as a percentage of the average price in 2016, adjusted statistically for sales volume and new car pricing. Luxury cars priced over $80,000 new and electric cars were analyzed separately, due to their high cost and the availability of federal and local tax credits, respectively.

About iSeeCars.com

iSeeCars.com is a car search engine that helps shoppers find the best car deals by providing key insights and valuable resources, like the iSeeCars VIN check report. iSeeCars.com has saved users over $188 million so far by applying big data analytics powered by over 25 billion (and growing) data points and using proprietary algorithms to objectively analyze, score and rank millions of cars and thousands of dealers. Based in the Boston area, iSeeCars.com was founded by TripAdvisor and SAP veterans determined to improve the car shopping experience for consumers.