These Depreciation Bin Specials Are Your Best Bet for Bargain, Off-Lease Bliss

Matt Posky
by Matt Posky

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]

Matt Posky
Matt Posky

A staunch consumer advocate tracking industry trends and regulation. Before joining TTAC, Matt spent a decade working for marketing and research firms based in NYC. Clients included several of the world’s largest automakers, global tire brands, and aftermarket part suppliers. Dissatisfied with the corporate world and resentful of having to wear suits everyday, he pivoted to writing about cars. Since then, that man has become an ardent supporter of the right-to-repair movement, been interviewed on the auto industry by national radio broadcasts, driven more rental cars than anyone ever should, participated in amateur rallying events, and received the requisite minimum training as sanctioned by the SCCA. Handy with a wrench, Matt grew up surrounded by Detroit auto workers and managed to get a pizza delivery job before he was legally eligible. He later found himself driving box trucks through Manhattan, guaranteeing future sympathy for actual truckers. He continues to conduct research pertaining to the automotive sector as an independent contractor and has since moved back to his native Michigan, closer to where the cars are born. A contrarian, Matt claims to prefer understeer — stating that front and all-wheel drive vehicles cater best to his driving style.

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  • CincyDavid CincyDavid on Jul 08, 2017

    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.

    • See 1 previous
    • FreedMike FreedMike on Jul 08, 2017

      +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.

  • 22_RE_Speedwagon 22_RE_Speedwagon on Jul 08, 2017

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

  • Bob65688581 We bought zillions of German cars, despite knowing about WWII slave labor. Refusing to buy something for ideological reasons is foolish.Both the US and the EU have imposed tariffs, so the playing field is level. I'll buy the best price/quality, regardless of nationality.Another interesting question would be "Would you buy one of the many new European moderate-price EVs?" but of course they aren't sold here.Third interesting question: "Why won't Stellantis sell its best products in America?"
  • Freshblather No. Worried there will be malicious executable code built into the cars motherboard that could disable the Chinese cars in the event of hostilities between the west and China.
  • Bd2 Absolutely not - do not want to support a fascist, totalitarian regime.
  • SCE to AUX The original Capri was beautiful. The abomination from the 90s was no Capri, and neither is this.It looks good, but too similar to a Polestar. And what's with the whacked price?
  • Rover Sig Absolutely not. Ever.
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