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Luxury Car Depreciation: How to Compare Resale Value and Ownership Costs

A fair luxury-car cost comparison uses the same ownership period, mileage, and price basis, then separates estimated depreciation from insurance, fuel, financing, fees, maintenance, and repairs.

By CarCody Team 5 min read

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To compare luxury-car depreciation fairly, use the same ownership period, mileage, purchase-price basis, and condition assumptions for each vehicle. Estimate each car’s value at sale, subtract it from your acquisition cost, then add fuel or electricity, insurance, financing, fees, maintenance, and repairs. Resale rankings and cost estimates can guide the comparison, but neither guarantees what your particular car will sell for or cost to own.

What does luxury-car depreciation measure?

Depreciation is the difference between what you pay to acquire a vehicle and what you receive when you sell or trade it later. For a useful comparison, show the loss in dollars as well as the percentage of the starting value lost:

Estimated depreciation = acquisition cost − estimated resale value

Depreciation rate = estimated depreciation ÷ stated starting value × 100

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State the starting value clearly. MSRP, negotiated price, and total purchase outlay are not interchangeable. Options, incentives, taxes, and fees can make your actual acquisition cost different from a model’s base MSRP. If you calculate depreciation from the negotiated price, use that same price as the percentage denominator and explain what is included.

For a used luxury car, the first owner has already absorbed some depreciation. Estimate your own future loss from what you pay now—not from the car’s original new-car MSRP—unless you are deliberately comparing new and used purchase paths separately.

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Which luxury cars hold their value?

There is no single ranking that combines resale value and every ownership expense for every luxury model. Rankings also depend on the year, data, and calculation method. For example, iSeeCars’ luxury-car ranking describes a comparison between new MSRP and the price of an equivalent five-year-old used model. Its value-retention score is adjusted for inflation using Bureau of Labor Statistics data. That is a market-based model comparison, not a quote for your car.

Market conditions are useful context, but broad averages are not model-specific forecasts. In its 2026 analysis, iSeeCars reported average five-year depreciation of 41.8%, based on more than 950,000 five-year-old used cars sold in the United States from March 2025 through February 2026. The study reported an average of 57.2% for EVs and said luxury models and EVs together accounted for 24 of the 25 highest-depreciating models. Those combined categories do not mean that 24 luxury cars alone occupied those positions, nor do the segment averages predict an individual luxury EV’s future value. See the study’s definitions and findings alongside any figure you use.

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Another useful but different source is Kelley Blue Book’s residual-value forecast. KBB says its projections use statistical models built on millions of transactions. Its 2025 awards release describes projections for vehicles in average condition with 75,000 miles at the end of a five-year lease or ownership period. These are forecast assumptions, not guaranteed sale proceeds. Read the KBB 2025 release for the stated scope.

These sources answer related, but not identical, questions: one observes used-car sales and compares model-level new and used values; the other projects future auction values under stated conditions. Keep the method and date attached to any number you compare.

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How do I compare depreciation fairly?

  1. Choose a common holding period and mileage. Five years is a common comparison window, but use the period you expect to own the car. Set annual mileage to match your driving plans.
  2. Match the vehicles being compared. Use the same model years where possible, and identify trim, drivetrain, options, and purchase condition. A base-model value is not a sound resale estimate for a heavily optioned vehicle without an adjustment.
  3. Choose and label a purchase-price baseline. Record MSRP, negotiated price, or another actual acquisition figure for each candidate. Say whether taxes, incentives, and options are included; do not mix baselines across cars.
  4. Find dated, relevant ending-value estimates. Use comparable mileage, condition, and location assumptions. A residual forecast, a ranking based on historical used-car sales, and current local listings are different kinds of evidence, so identify the source and method rather than treating them as interchangeable.
  5. Calculate both dollars and percentage. Subtract estimated resale value from the stated acquisition cost. Divide that loss by the same stated starting value to calculate the depreciation rate.
  6. Test a range. Recalculate with lower and higher resale estimates or a different mileage assumption. This shows how sensitive the comparison is to an uncertain future sale price.

For example, if two cars have different negotiated prices, subtracting an estimated sale value from each negotiated price reveals their expected dollar losses on those purchase terms. Comparing percentages can add context, but it does not replace the dollar figure a buyer may actually need to budget.

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How much does depreciation add to the cost of owning a luxury car?

Depreciation is one part of ownership cost, not the whole bill. Kelley Blue Book’s five-year cost-to-own framework includes depreciation, fuel, insurance, financing, state fees, maintenance, and repairs. A low-depreciation car can still have high insurance, financing, or service costs; a higher-depreciation car may have a different mix of expenses.

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For a fair total-cost comparison, add the same categories over the same holding period. Use your expected fuel or electricity use, insurance quote, financing terms, local taxes and registration fees, scheduled maintenance, and a realistic allowance for repairs. Then show depreciation separately as well as within the total, so readers can see what drives the difference.

KBB’s estimates are not personal quotes: its guidance notes that results vary by make, model, body style, use, and owner situation. A model-specific example illustrates why the scope matters: KBB’s page for the 2025 Cadillac LYRIQ listed estimated five-year depreciation of $35,196 and $29,007 in out-of-pocket expenses, for a $64,203 total. Those figures are for that model and page, not a typical luxury-car cost or a personalized estimate; estimates may change as data and assumptions are updated. Review the 2025 Cadillac LYRIQ cost-to-own page for its current details.

What can change a luxury car’s resale value?

A projected residual is not a promise of proceeds. The value of a particular car can differ with mileage, condition, accident history, service history, local supply and demand, and market conditions when it is sold. A clean record and regular maintenance may help preserve buyer confidence, but they do not guarantee a higher price.

KBB recommends maintaining the vehicle and keeping good service records in its guide to minimizing depreciation. Keep records accessible and compare your car’s condition honestly with the assumptions behind any forecast. A vehicle valued as average-condition at a specified mileage is not automatically equivalent to one with different wear or history.

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How do I compare total ownership costs for my situation?

  • Set the frame: holding period, annual mileage, location, and whether the purchase is new or used.
  • Make prices comparable: acquisition cost, incentives, options, taxes, and fees should be identified consistently.
  • Document resale estimates: source, date, valuation method, mileage, and condition assumption.
  • Separate the cost categories: depreciation, energy, insurance, financing, fees, maintenance, and repairs.
  • Replace generic inputs where possible: get an insurance quote for the driver and vehicle, use local fee information, and base energy costs on realistic mileage and consumption.
  • Show uncertainty: compare at least a lower and higher resale estimate, and disclose important financing or mileage assumptions.

Use the resulting comparison to understand trade-offs, not to declare a universal winner. Reliability and safety can be assessed separately; for example, iSeeCars’ broader score includes reliability, resale value, and safety, which is not the same as a total-cost calculation.

Product prices and availability are accurate as of the date/time indicated and are subject to change. Any price and availability information displayed on Amazon at the time of purchase will apply.

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