Luxury vs Economy Car Depreciation
**Luxury brands** (BMW, Mercedes, Audi) often lose 50-60% in five years. **Economy brands** (Toyota, Honda) may retain more resale value—depreciation dominates true cost more than MPG.
Step by step
1. Model both brands
Use depreciation calculator with brand presets.
2. Add insurance gap
Luxury insurance and tires cost more annually.
3. Compare CPO
One-year-old luxury can equal new economy price.
Luxury vs economy depreciation
Buying used luxury vs new economy is a common crossover point.
- Luxury: Steeper curve; higher repair and insurance.
- Economy: Slower depreciation; better resale liquidity.
Common mistakes
- Ignoring mileage penalties at resale
- Financing luxury with 84-month loans
FAQ
Do EVs depreciate faster?
Varies by model year and tax credits—run current comps.