Some models have incredibly low amounts of depreciation.
The benefits of buying a new car include having a low chance of developing mechanical issues, better insurance rates, and that inimitable new car smell. But there are pitfalls in buying a brand new car, chief among them being depreciation. However, with careful shopping and keeping resale value in mind, you enjoy a new car for five to seven years without losing too much cash.
The worst vehicles to buy with resale in mind is a luxury or electric car, while the best are trucks, sports cars, crossovers and SUVs. That doesn't mean any truck, sports car, crossover or SUV is going to hold its value better than the industry average of 49.6 percent depreciation over five years. We've covered sports cars recently, so here are the top ten best crossovers and SUVs to buy based on resale value over the last five years.
The Subaru Outback ranks a little worse than the industry average overall but makes the top ten because of its well-earned reputation for reliability and longevity. There's a market pretty much everywhere for Subaru Outbacks, but the best resale values will be in the areas where they are most popular. Vermont, Maine, and New Hampshire are geographically close to each other, but Subaru also does well as a brand in any state known for outdoorsy lifestyles and/or cold weather. You may not want to buy one with resale in mind if you live in Miami, Florida, but if you live near a Colorado ski resort, it's probably a good buy.
Traditionally, big money vehicles lose a lot of value quickly, but the Toyota Land Cruiser has a legendary reputation for ability and reliability. Its current generation is long in the tooth, which might mean it's not the latest and greatest, but it does mean it has been well proven. Used buyers know they are getting a ton of off-road prowess and a brawny V8-based drivetrain that will go on for many, many, miles. With all that in mind, people are prepared to pay a bit more over say, a Range Rover.
Also in the big-money vehicle bracket on this list is the Mercedes G-Wagen in AMG form. Like the Land Cruiser, the G-Class is renowned for its exceptional ability off the road and long term reliability. Unlike the Land Cruiser, though, it's a vehicle people like to use to show they have money. The current AMG version also brings additional bragging rights with a 4.0-liter twin-turbo V8 making 577 horsepower and 627 lb-ft of torque. That means an astounding 4.4-second sprint to 60 mph in a vehicle weighing 5,845 lbs.
The fact of the matter here is that rugged off-roaders high in capability tend to hold their value. The Mercedes G-Wagon has stayed very close to its roots since it first emerged in 1979, while other classic vehicles, like the Range Rover or Jeep Cherokee, have evolved to meet the modern market head-on. Even the new updated version holds true to the original's functionality as well as its quality, making any model year desirable on the used market. To give you an idea just how deep off-road travel is engineered into the G-Class, standard on every G-Wagen are three differential locks with 100% lockup when engaged and a torquey 4.0-liter bi-turbo V8 engine is the top option.
It's not just off-road ability that helps resale value for crossovers and SUVs. Like the Subaru Crosstrek, the Honda CR-V has a reputation for longevity, but it doesn't sit in a niche where all-wheel-drive is critical. Family vehicles are the meat and potatoes of the car industry, and the CR-V isn't flashy but does everything it needs to very well. It's refined, has a good cabin, it's comfortable, has a voluminous cargo area, and does well in fuel efficiency. It's classed as a compact SUV, but is more than adequate for a family of four and still useable if a third child is growing up as well.
For larger families, the Toyota Highlander has been serving since 2001. Back then, many SUVs were of a body-on-frame design, so building the first car-based mid-size crossover was a gamble for the Japanese company. It paid off, and the Highlander has evolved over the years and is currently renowned for its fuel economy in the segment. The Highlander now faces stiff competition from the Kia Telluride and Hyundai Palisade. Still, its head start and reputation for reliability and fuel economy are keeping it ahead in resale value. For now, anyway.
Toyota is the brand to beat when it comes to resale value in crossovers and SUVs. The third from the Japanese brand on this list was also the best selling non-pickup truck in the United States in 2019. Despite the massive numbers sold each year, the RAV4 holds its value well, and that boils down to longevity and reliability again. People don't tend to rush selling their RAV4s, so, when they do sell them, there's guaranteed to be a couple of people lining up to buy it.
The fourth and final Toyota on the list is the gracefully aging 4Runner SUV. In fact, it's aging so gracefully we gave it our 2019 Off-Road Warrior award. It's the kind vehicle you want to own if there's an apocalypse. It'll just keep on running and take you just about everywhere. Depreciation value of only 36.5% over five years is fantastic, and we suspect that the new TRD Pro models will do even better over the next five years.
The used market for Jeep Wrangler models is incredibly healthy. As a hobby, off-roading is a massive deal in the USA, and the aftermarket for Jeeps models is a huge business. The used market fuels that hobby, so demand is high, and, as a result, so are the prices.
Driving even more demand is that people just want to own a Jeep, in the same way that many Americans just want to drive a Mustang, a Camaro, or anything else with s strong identity as an American icon. Hardcore Jeepers may mock the "pavement princesses," but the fact of the matter is they are a big help to why the Wrangler is still a huge success, and why the Wrangler isn't way more expensive than it is.
A depreciation curve of just 30% over five years for any vehicle is phenomenal. For comparison, if you spent $35,000 on a Subaru Outback, you would lose $17,885 of its initial value over five years. Spending the same on a Jeep Wrangler Unlimited, you would lose just $10,500. Seven grand is no laughing matter if you only plan to hold onto a car for five years. Seven grand is also a pretty low price to pay to own a car for five years, and that's with a factory warranty. Currently, the warranty on Wrangler Unlimited models is three years or 36,000 miles basic limited, and five years or 100,000 miles on the powertrain.
Suddenly people buying Jeep Wranglers and Wrangler Unlimited models brand new and with no plan to go off-roading makes a lot of sense. And for those that do plan to go off-roading, the most significant risk of surprise costs will inevitably be self-inflicted.