How Depreciation Works for Luxury Sedans
Luxury sedans depreciate differently than regular cars. Most luxury vehicles lose about 50 to 55 percent of their value over five years. However, the exact amount depends on several factors beyond just the brand.
What Affects Depreciation Most
Brand reputation matters, but it's only part of the story. Here's what really drives resale value:
- Maintenance history: Well-maintained vehicles hold value better
- Mileage: Lower mileage means higher resale prices
- Market demand: Popular colors and features sell faster
- Condition: Accident-free vehicles command premium prices
- Age: Newer model years retain value longer
The Real Numbers
According to AAA's 2025 depreciation data, the average new vehicle loses about 4,334 dollars in value per year. For luxury sedans specifically, this figure is often higher due to steeper initial depreciation rates.
When comparing vehicles in the same segment, the difference in depreciation rates is typically small. A well-maintained luxury sedan from Brand A might hold its value nearly as well as Brand B, even if Brand B has a stronger reputation.
How to Compare Resale Value
If you're deciding between specific luxury sedans, check these resources:
- Look up the specific model's historical resale prices on Kelley Blue Book or Edmunds
- Calculate the 5-year depreciation percentage, not just the dollar amount
- Compare vehicles with the same options and mileage
- Factor in maintenance costs, which vary by brand
Smart Shopping Strategy
Don't choose a vehicle based solely on expected depreciation. Instead, focus on:
- Total cost of ownership (depreciation plus maintenance and insurance)
- Whether you plan to keep the car long-term
- How much driving you'll do annually
- Your budget for unexpected repairs
Using a tool like Sidekick helps you see the full financial picture. You can compare the true cost of ownership across different luxury sedans, including depreciation, maintenance, insurance, and fuel costs specific to your situation.