By on July 7, 2017

2014-cadillac-cts

Late-model used cars have long been the clever shopper’s new vehicle alternative. While hubris keeps some of us from dirtying our driveways with anything that isn’t fresh from the factory, bargain hunters know purchasing an off-lease vehicle is a decent way to save a trunkload of cash and obtain something that can still be considered modern. It also provides cash-strapped individuals with the ability to buy something normally above their means.

With leasing growing in popularity and off-lease vehicles pouring into the market like pigeons on a slice of bread, shoppers can find late-model, low-mileage cars for roughly half the price of a new one. Often, still under warranty. Some deals are better than others, and a recent analysis of 2014 model-year vehicles highlights several models with above-average depreciation rates buyers can easily take advantage of.

iSeeCars compounded more than 5.8 million sales to parse out the models with the greatest loss in value after three years, when most leased vehicles join the used car market. While the average rate of deprecation was 34.5 percent, Cadillac’s CTS and ATS clocked in value drops of 51.4 and 50.4, respectively. That’s terrible news for those who bought one new but food for thought to anyone considering a second-hand luxury vehicle. You can easily find a 2014 CTS for well under $28,000, according to those metrics. However, some light browsing would suggest there are even better deals to be found with a modicum of effort.

While a little more expensive than the Caddies, Mercedes-Benz’s E-Class and C-Class sedans also posted higher than normal deprecation rates of about 48 percent. Those models are followed closely by the BMW 5 Series. The 3 Series and Infiniti’s Q50 also represent a good bargain, though the latter vehicle holds its resale value a little better with only 46.9 percent of its original value lost.

If you’re noticing a trend with these pre-owned vehicles, it’s because these are the most commonly leased cars in North America. “Whether you call them almost new, gently used or lightly used, the 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,” explained Phong Ly, CEO of iSeeCars. “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.”

Not all of the best deals were lease hounds, however. The Volkswagen Jetta, Ford Fusion, and Ford Focus all depreciated more than 45 percent.

Losses on utility vehicles are a little leaner. While shoppers can find a three-year-old Cadillac SRX, Buick Enclave, Kia Sorento, or Infiniti QX60 (representing a 42.4- to 44.0-percent loss), SUVs typically hold their value better than cars. But no segment’s value is quite as sturdy as the mighty pickup truck.

“Below-average depreciation isn’t surprising when you consider the increased demand for trucks,” said Ly. “In a previous study, we found that original owners also keep their pickups longer than the average vehicle.”

The average three-year depreciation for trucks was 28.5 percent, making it the only vehicle segment with all its models yielding depreciation rates below the overall average. While the Ram 1500, Ford F-150, and GMC Sierra 1500 all deprecated faster than their contemporaries, they were still so close to the segment average that it wouldn’t be worth a comparative analysis.

If you’re hunting for a mind-blowing deal on the second-hand market, stick to the sedan.

[Image: General Motors]

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67 Comments on “These Depreciation Bin Specials Are Your Best Bet for Bargain, Off-Lease Bliss...”


  • avatar
    readallover

    And many of those cars end up in Certified Pre owned programs to try and prop up the depreciation values.

  • avatar
    PrincipalDan

    “The average three-year depreciation for trucks was 28.5 percent, making it the only vehicle segment with all its models yielding depreciation rates below the overall average.”

    Used trucks never make sense unless gas is at one of the periodic “peak” prices. I bought a two year old truck 50% off the original MSRP but that was when gas was dang near $4 a gallon (opposed to approx $2.05 a gallon it is here now.)

    “Whether you call them almost new, gently used or lightly used, the 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,”

    Yeah just wait until the current crop of leases starts returning. This is a trend where the crest of the wave of returns has yet to arrive.

    • 0 avatar
      gtemnykh

      As sick as it sounds, I’m almost wishing for a (short lived) gas spike. Those dang Tundras just hold their values way too well. A pre-refresh ’12-’13 Cremax with the TRD package with 50-60k is still in the mid 20k range, ’14s with 40-50k hover in the high 20s, TRD Pros are solidly mid 30s ($44k MSRP IIRC?)

  • avatar

    my caddy ? lot poison. rwd only could not make up for the FE3 performance and 3.6 engine part. 16k. For so long as gas is cheap (18 mpg abused) it is a great deal. GM parts suck, but they aren’t expensive.

    • 0 avatar
      PrincipalDan

      Yeah would I buy it because “OMG Cadillac”? No. For me those feelings died with the BOF RWD Cadillacs of yore.

      But if you want a RWD sports sedan that is a bit more reliable and cheaper to repair than something from Germany. Go for it.

  • avatar
    gtemnykh

    If I were in the market for a comfy luxo-sedan with some curb appeal, a highly depreciated CTS with the 3.6 would be quite tempting. I say this as someone quite averse to GM vehicles.

    • 0 avatar

      Literally the first GM in a good-customer car buying extended family since an 80’s Cutlass Supreme turned us off the brand for good. I wouldn’t have made that leap of faith at full retail…

  • avatar
    thats one fast cat

    so this makes no sense to me at all. iseecars put together a list of cars to buy 1 year used; the fiat 500 topped the list at more than a third off:
    Rank Model % Price Difference Between New and 1-Year-Old Used $ Price Difference Between New and 1-Year-Old Used
    1 FIAT 500L -34.6% -$8,096
    2 Lincoln MKS -34.5% -$16,039
    3 Volvo S60 -34.4% -$14,204
    4 Kia Cadenza -34.3% -$12,940
    5 Mercedes C250 -34.3% -$15,247
    6 Nissan Maxima -34.0% -$12,469
    7 Lincoln MKZ + MKZ Hybrid -33.8% -$14,177
    8 Jaguar XF -32.3% -$19,966
    9 FIAT 500 -31.9% -$6,099
    10 Cadillac -31.8% -$13,351
    11 Chrysler 300 -31.7% -$11,525
    12 Buick Regal -31.2% -$10,117

    Does that mean that the CTS/ATS catch up in depreciation an that the Fiat500 “flattens out” the cost curve? I know a little about statistics and such, and the fact that there is not an overlay between what is best to buy three years out and what is best to buy one year out as a percentage reduction doesn’t seem to follow for me.

    Also, anecdotally, I would have thought you would have seen bigger dropoffs on the highest end german/english sheet metal – every seen the asking price for three year old S600/A8/760li/XJ Supercharged?

    • 0 avatar
      28-Cars-Later

      Jag resale started jumping around MY10.

      On that list, I see maybe two worth buying. I also think those figures may be “retail” and thus the curve is actually much deeper.

      Ooooo lookie here, just what I have been saying for the past two years:

      zerohedge.com/news/2017-07-07/auto-oems-and-auction-houses-are-colluding-prop-used-car-prices-it-wont-work

    • 0 avatar
      AlexMcD

      Let’s consider that a Fiat 500l can never be bought at a good price. Bought implies paying actual cash to take it away from the dealership.

      The starting point for that car should be a monthly payment to the poor slob that drives it away from the unfortunate lot in which is sits. I would place appropriate payments from Fiat to the future owner in the neighborhood of $640/month plus insurance. This is so repairs for the Fiat which will average 2,500 per year can be accommodated as well as the purchase of a Honda or Toyota so owner has a car which can actually be driven to a job or school.

    • 0 avatar
      NormSV650

      I believe the for-sale car websites offer $13,000 off MSRP on Cadillacs. Does that mean you drive them free for the first year?

    • 0 avatar
      NormSV650

      Lexus GS 350 depreciation of 1/3rd in 18 months.

      https://www.edmunds.com/lexus/gs-350/2013/long-term-road-test/2013-lexus-gs-350-carmax-appraisal.html

  • avatar
    ajla

    Good idea or great idea?

    jumboluxurycars.com/mobile/mdetails.aspx?VID=9696215

  • avatar
    28-Cars-Later

    *evil villain laugh*

  • avatar
    Dan

    Massive first year depreciation is a good reason to stay away from these cars new but how much status chasers paid for them last year is no endorsement of buying them used either.

    Would you pay $92.50 for a Prada paper clip?

  • avatar
    sportyaccordy

    We are in a strange market, all driven by dirt cheap credit I’m pretty sure. If rates come back to reality, all these nutty leases will cease, and I imagine the NPV on NOT putting 30-40% on the hood of a $25K Camcortima will become too positive to ignore.

  • avatar
    JMII

    #8 Infiniti Q50 $ 24,956 46.9% 1.36 x

    That what we got. Actually a Q60 (the coupe) and not the Q50 (sedan) but the drop off is about the same. We now have a low mileage, 2 year vehicle in perfect condition with a full warranty at 1/2 price! It was pretty much a no-brainer. I can’t imagine paying nearly $46K for a fancy Nissan, but at the 1/2 price you can’t beat it. Honestly it is a steal, with V6 power, RWD, all the important gizmos (sunroof, heated leather, bluetooth, etc).

    • 0 avatar
      28-Cars-Later

      How is the electronic steering rack?

      • 0 avatar
        JMII

        Ours is a 2014 thus the old rack. Its the model that is a G37 but with the stupid Q60 badge slapped on it. I so want to switch the badge back to reflect what the car really is.

        Wife loves the car. I’ve driven it a few times and have ZERO complaints, for the money its awesome. Getting about 22 MPG in mixed driving. It has more power then my Z but without any of the downsides. We compared it to a MB C-class and the Infiniti drove way better. The Benz suspension was too stiff yet the steering too light. The Q60 had quick, smooth, linear power while the Benz had (what felt like) massive turbo lag. Couldn’t seem to get the seating position in Benz just right either, while Q60 felt nearly perfect. I know people bash the Infiniti’s interior but we found it more user friendly then the overly complex yet boring Benz. Also looked at an Audi TT coupe which was even better, but our previous VW experience (B5 Passat) scared the wife off. Since I beat the crap out of my Z on track and understand its little gotcha’s staying in the Nissan family made sense too.

    • 0 avatar
      FreedMike

      I see a lot of these as rentals.

  • avatar
    APaGttH

    Nissan Maxima has ridiculous depreciation and it is one nice ride. You can find a clean one that is 2 to 3 years old for 1/2 of sticker.

  • avatar
    matt3319

    I’m surprised no one mentioned the Jeep Wrangler yet. Think is the King of Non-depreciation. Why even buy a year or two old Wrangler.

    • 0 avatar
      TTCat

      Depreciation? My 2000 Wrangler TJ is worth more today than when I bought it as a 1-owner used rig in 2008…

      Now, I am in Colorado, so there is that…

    • 0 avatar
      here4aSammich

      Exactly. I get FCA fleet pricing through my employer. Wife gets a new Wrangler every 36 months. The dealers fight for the old one. Our ’12 Unlimited Sport brought us $5k over the lease buyout. They CPO’ed it and flipped it for $1k over what they paid us. The ’16 has a year left on the lease, they always try to buy it when I get the oil changed (free, of course, or I wouldn’t go to the dealer). She gets the new ride, I always buy gently used. But I’d never go euro, odds are they’ll just get too expensive to maintain for as long as I tend to keep them.

  • avatar
    zip89123

    The Ford Fusion depreciates like crazy, but those snagging the Titanium models are very very happy!

  • avatar
    EX35

    after a quick search I see you can cop a CPO 2016 MB C300 for $27K. Not bad considering the MB CPO warranty is supposed to be pretty good. I’d rather buy a solid RWD sedan for the same price as a nicely equipped Civic.

  • avatar
    hpycamper

    What about the idea of never owning a German car out of warranty? And whether the vehicle has been driven too hard? In the not too distant future, I may be buying an Audi A5 and buying it used truly worries me.

    • 0 avatar
      TTCat

      Ran 2 TTs well out of warranty over the last 15 years before picking up my 14′ Cayman just last month – never had a real issue with either one – in fact, the first one got better after the warranty was gone, the second one has been bulletproof, and I passed it on to my Dad to drive…

      • 0 avatar
        hpycamper

        Did you follow Audi’s recommended maintenance, or go with more frequent oil changes, etc?

        • 0 avatar
          TTCat

          Just followed the Audi recommended maintenance schedule, 7500 mile engine oil changes on the first TT if I remember right, and 10k mile interval changes on the second one, with the Haldex service at 20k mile intervals (not an issue on an A5).

          …but I did do the timing belt services at 60k mile intervals, regardless of what the factory claimed – almost everybody I know or heard about that didn’t do the belt service around 60k got bit…

      • 0 avatar
        ajla

        Were they manuals or DSG?

        • 0 avatar
          TTCat

          Both manuals, the first was a 5-speed (180hp Quattro coupe), the second was a 6-speed (225hp Quattro coupe) – both were chipped, with aftermarket exhausts and diverter valves almost from day 1…

    • 0 avatar
      SilverCoupe

      I bought my 2008 A5 S Line (manual, 6 cylinder) in 2011, and it has been trouble free so far; granted, I only have 38,000 miles on it.

      My previous car, a 2001 TT (manual), was purchased one year old, w/ 14K, and was reasonably trouble free until the power steering failed on me once when it was 10 years old.

    • 0 avatar
      87 Morgan

      hpycamper. Anecdotally, I work with a guy who’s territory is Iowa. He drove an A5 270k miles with very little issues. Now drives a CPO E class with an extended unlimited mile 5 year warranty. He is happy with that too. He bought first a CPO C class and kept it 2 months for what its worth.

  • avatar
    stingray65

    How can they afford to offer great lease deals on sedans that depreciate 50% in 3 years? I can only assume that Cadillac, BMW, M-B, etc. are losing their shirts on recent leases, and that future lease deals on sedans are unlikely to be as attractive.

  • avatar
    Fred

    Odd that a car that didn’t sell well when new doesn’t depreciate much. I’m talking about my Acura TSX Sportwagon. On the other hand I know a few folks who fell for the CTS depreciation price. Only one still has it, the others gave up on it after too many repairs.

  • avatar
    Secret Hi5

    Vs. MSRP or actual? I’m sure those Caddys aren’t selling for anywhere near MSRP, when new.

    • 0 avatar
      brn

      A point that needs to be considered when comparing the price of new vehicles.

      Unfortunately, most automotive press compares vehicles at MSRP, rather than out-the-door prices. This creates a disadvantage for manufacturers where significant discounts from MSRP are expected.

    • 0 avatar
      bd2

      Yep – depreciation is based off MSRP and not ATP.

      So, it’s not nearly as bad if buyer are getting their “savings” up front – via heavy discounts from MSRP.

  • avatar
    SuperCarEnthusiast

    The 2014 5 series are around 50% off but they are the usually the cheap ones with very little packages or options in them or are higher mileage around the 40K+. The 550 models are the same but burn more gas and have higher maintenance expenses to them. I trying to find a low mileage 535ix with around 13-20K miles but they are around the 35%-45% off MSRP and they go quickly. So I just going to wait till the flood happens if it does. I have the “money” and these dealers are just full of it too! I want it at 45% off with a fully loaded model and low mileage. The 528 series are for the economy minded buyer. They have limited packages and only 18″ wheels available. They are not selling, so if you want a 4 cylinder with 240 horsepower and 260 lb. of torque and engine that sounds like a diesel; you get a bargain price BMW 5 series at 45%-50% off.

  • avatar
    JDG1980

    There’s a good reason why German cars depreciate so quickly. I’d stay away from them, myself.

    On the other hand, the used Ford Fusion should have reasonably good reliability and can be a genuinely decent deal. I think the heavy depreciation in this case isn’t due to leases, but due to the use of these as fleet vehicles – even higher trims. When my Honda Fit was in the shop for the Takata airbag recall, I got a rental voucher for Enterprise, and they gave me a Fusion sedan in the Titanium trim. I wouldn’t personally buy a sedan like this (at 6’7″, I need a vehicle with a tall roof for long-term use) but for many people, a depreciated off-rental Fusion would be a fine choice. I’d stay away from the Focus, though, because the transmission is so atrocious.

    As for pickups – it’s just insane how slow their depreciation is. I’ve been thinking about getting a used Ford Ranger as a second vehicle, but the prices on these are crazy for their age and mileage – a 2011 Ranger XLT or Sport that cost barely $20K new still fetches $12K-$15K with low mileage, and even 10-15 year old beaters with 150K-200K miles are hard to get under $4K unless they have serious problems.

  • avatar
    Joss

    I thought EV s the depreciating kings? You can finance a new battery for the cost of a monthly gas bill. Then parts & warranty? Deutschland erwache!

    • 0 avatar
      Luke42

      It’s the Leaf which depreciates that way.

      Tesla’s vehicles hold their value much better.

      Most other EVs are short-range California-only compliance-cars, and so I don’t follow their prices.

  • avatar
    87 Morgan

    I bought my 14′ Lacrosse as an off lease car. Premium I package with AWD for 20k plus tax and dealer handling.

    Seemed far more reasonable to me than close to 40k plus tax for anything new with the same options.

    My business partner bought 14′ off lease CPO BMW 650i with 11k miles for 58k. A lot of dough for sure, but way lower than the $110k new. If you really need a badge whore car, it is hard to beat Z-Germans when it comes to really expensive highline cars that are lease returns as long as you go CPO.

  • avatar
    I_like_stuff

    Studies that use MSRP as the base price are useless since the discount from MSRP varies widely between manufacturers. Tundra buyers will get $1K off MSRP on a good day. GM truck buyers on the other hand will get $10K off MSRP on a bad day.

    To use a very simple example, both the Tundra and GM are $50K MSRP. Tundra sells for $49K, GM sells for $40K. 3 years later the Tundra is worth $35K, the GM is worth $28K. Both are worth ~70% of what the buyer paid. But when comparing to MSRP it looks as if the Tundra has held its value a lot better.

    And also what is the value of financing? If GM offers 0% but Toyota offers 2.9%, that’s several thousand dollars that the GM buyer saves over that 3 years as well.

    I’m not making a case that GM is a better buy than Toyota mind you, just pointing out that determining what depreciates better is not cut and dried percent of MSRP.

  • avatar
    lostboy

    Hi All – quite frankly i didn’t read through all the prior comments but has anyone thought of the off lease cars maintenance schedules? It’s all fine to talk to depreciation on the purchase price but the real question is maintenance over the long run!

    i’m not a stickler but my mechanic a long time ago told me about brake job pricing for a 3 series that quickly led me to an acura instead (and by extension pretty much any major work on europeans vs GM or jap)
    ((did you know that you can get most work on Acura done at Honda for literally $50 or $100 off the acura prices for literally everything?))

    I vaguely remember feeling uneasy doing timing belt changes on my VW years ago, every 100K KM! – most of the new cars timing belt changes are deferred until 80K MILES (unless they have a chain) so the first owner has no major work during a typical lease but that SOAB comes due when you own it used and the parts are expensive but the labour is killer!! – so if you’re buying used and your worried i’d seriously consider re-certified pre-owned with an extended warranty from a dealer just to cover that extended but oh so “up your wallet loving” major service interval that’s due in 15K miles after you purchase it. Seriously.

    The caddy drops like a rock for various reason but trust me, the maintenance costs HAS to be cheaper than the germans.(you just have to put up with the don’t give a F customer service attitude of the GM dealers vs. the lube me up with cash attitude of the europeans) – but honestly, no one can argue that the GM is really going to cost more to keep on the road over time than the europeans. (and you can more easily DIY with GM IMHO) – just think about the shocks on those BMW 3/5’s and Audis and you know what i’m talking about!!

    used korean is the way to go – nothing else unless you want to spend $$ on keeping it on the road or more up front (IMHO, i just don’t give a damn about name plates or badges)

    best of luck trying to find a hugely depreciated japanese anything, they have a reputation that may not be as deserved as it should be but damn, anything toyota you can almost sell back at the same price in 2 years. (this excludes suzuki)

    just one damn fool opinion :)

    Also, just a heads up, i drive a 12 year old subaru, and i’m not shopping for another 5 years. wife drives 4 year old acura, and will again in 3 years!

  • avatar
    CincyDavid

    As long as the cheap leases continue, that’s what we’ll do. 4-5 oil changes, a couple of tire rotations, wiper blades, and gas…that’s IT. After 3 years (really more like 30-32 months because they pull us ahead each time), dump it for a new one. No muss no fuss, never out of warranty, no sales tax, at least not directly, no trade-in haggling and hassles.

    • 0 avatar
      I_like_stuff

      Agreed. But, leases get a bad rep because most people don’t understand them and they get ripped off. Dealers also love leases for that same reason, it’s easy to bamboozle unsuspecting customers. Leases are complicated in that there are a lot of moving parts, MSRP, residual, money factor, acquisition fees, disposition fees, different sales taxes for different components of a lease, etc. And for the layman non-finance type, it’s easy to get lost in it all.

      I like to lease for the same reason you do…always driving a new car under warranty with very limited maintenance. Plus after 30ish months, hand the keys over, and get a new one. I used to own older cars thinking I was saving money. But I wasn’t really, not when I had to buy tires, changes brakes, change a timing belt, etc. Maybe it was marginally cheaper, but not enough to give up driving a new car every 2-3 years.

    • 0 avatar
      FreedMike

      +1 to Cincy.

      If you don’t do a ton of driving, and you like getting a new car every few years, leasing is the best way to go. By far.

      And +1 to the follow up comment as well. There are websites that will explain how leases are calculated, and apps that you can put on your phone. Make sure the dealer is disclosing the money factor accurately, plug the info into your calculator, and make sure it adds up. If they’re trying to sneak stuff in there, it won’t.

  • avatar
    22_RE_Speedwagon

    New 2016 Q50s are being advertised for 27% off MSRP right now in the Boston area.


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