After five years of ownership, the average vehicle is worth about half of what its value was as a new car.
But for one clear leader in the clubhouse, you can nearly cut that depreciation in two.
According to an analysis from iSeeCars.com, the four-door Jeep Wrangler Unlimited loses 27.3 percent of its value in the first five years.
That was good enough to top the iSeeCars list of vehicles with the lowest five-year depreciation.
Second on the list?
The two-door Wrangler, whose depreciation was just “a fraction of a percentage point” higher, iSeeCars noted.
“Jeeps are known for retaining their value due to their enduring popularity, as well as their durability and performance across all terrains,” iSeeCars chief executive Phong Ly said in the analysis.
Three pickup trucks followed: the Toyota Tacoma (29.5 percent), Toyota Tundra (37.1 percent) and Nissan Frontier (37.8 percent).
The back half of the top 10 list was also trucks and SUVs, for the most part. The Toyota 4Runner was sixth at 38.1 percent, followed by the Chevrolet Silverado 1500 (39.7 percent) and GMC Sierra 1500 (39.9 percent), respectively.
To determine this list and others in its report, iSeeCars looked at over 3.6 million 2013 model-year vehicles sold that same year. It also examined over 750,000 cars from the 2013 model year that were sold in the first nine months of 2018.
“Cars with outlier pricing were removed, as were heavy-duty trucks and vans and models no longer in production as of the 2018 or 2019 model year. Only models where depreciation was accurate to within +/- 0.5 percentage points were used in the final analysis,” the company explained in its methodology. “Used-car prices from 2018 were inflation-adjusted by 7 percent to 2013 dollars, based on data from the U.S. Bureau of Labor Statistics.”
Continuing on, No. 9 on the list was the Subaru Impreza, which was the only car to make the list and had 42.3 percent deprecation after five years.
Rounding out the Top 10 was the Ram 1500 (42.7 percent).
“While the average new vehicle loses 50.2 percent of its value after five years, there are vehicles that retain more of their value and depreciate less than average,” Ly said.
“For consumers who buy new vehicles and sell them around the five-year mark, choosing a model that retains the most value is a smart economic decision,” he said.
But for Wrangler owners, they may not be willing to part with their Jeeps after five years, given their passion for the vehicle.
You might even call the Wrangler a cult classic.
“And it keeps growing, though … it’s a cult vehicle, but that cult keeps attracting more and more people,” Jonathan Banks, who is vice president of vehicle analysis and analytics for J.D. Power, said in a phone interview last month.
“And you would assume as we continue to migrate towards more trucks and SUVs, that becomes the icon,” Banks said. “I expect it to be the leader in the segment for many years to come.”
The 2018 model-year Wrangler is projected to retain 62.3 percent of its value after 36 months, according to J.D. Power’s residual value forecast for September/October.
That’s nearly 15 percentage points higher than the segment average of 47.4 percent.
“The Wrangler has always had this kind of appeal in the used market,” Banks said. “It’s really the unique value proposition that vehicle offers.
“It basically has a loyal and very passionate following that has enabled the Wrangler to not only be appealing to people that actually use it for what it’s built for, but it’s become this completely emotional product even for people that don’t really use it for off-roading,” he said.
During his two decades in the auto industry, Banks has seen the Wrangler maintain “phenomenal” resale values, as it is “always that vehicle up at the top,” he said.
And to be fair, there have been other models with “glimpses” of such strength, like the Toyota FJ Cruiser, Land Rover Defender as well as the Nissan Xterra “to some extent, when it went away,” Banks said.
He said, “there’s just a real appeal for U.S. consumers for this rugged-looking vehicle that actually has the capability to perform in line without looks.”
For the Wrangler, that performance is driven by an emotional connection-sparked demand that outweighs the supply.
He doesn’t expect that to change, barring something drastic, and perhaps unwise.
“That DNA of that vehicle is just something that shouldn’t be messed with,” Banks said. “It’s like the perfect vehicle for that customer.”