Luxury Car Depreciation: Managing the Value of Your Luxury Vehicles


Luxury exotic cars are a joy to own, as well as an investment. Unfortunately, depreciation can hit any vehicle’s value hard, even luxury ones. Don’t let it happen to you. Read on to learn more about luxury car depreciation, how to avoid it, and what happens when depreciation rates on your vehicle are higher than you expect.

What is Depreciation?

Every vehicle has a price, although that price can fluctuate. When a vehicle goes down in value over time, it is known as depreciation.

Why Does Depreciation Matter for Luxury Vehicles?

Vehicle depreciation can affect taxes as well as car insurance rates. While having a car depreciate can be great when paying taxes or renewing auto insurance policies, it’s not as great when it comes to reselling a vehicle, especially if that vehicle is a luxury car like a Lincoln Navigator or BMW 7 series.

What Causes a Luxury Vehicle to Depreciate?

Not every vehicle depreciates at the same rate. In fact, some cars actually gain value over time. The reason is that depreciation rates are determined by considerations of a wide variety of factors.

Specific factors that affect the amount of depreciation deductions a vehicle receives include:

  • Mileage. The fewer the miles on the car, the higher its resale value will be.
  • Number of owners. Usually, the more owners a vehicle has had, the lower its resale value will be.
  • If the vehicle is a passenger car or for business use. Businesses in the U.S. may be able to depreciate the value of their business vehicle for tax-related purposes, according to the IRS.
  • Fuel economy. Improved fuel efficiency typically means a vehicle retains its value better than vehicles with poor fuel economies.
  • Make and model. The more luxurious and expensive the original new car was, the more value it will have even after depreciation deductions. For example, a 2024 Porsche 911 will depreciate on a slower scale than a run-of-the-mill sedan or SUV from brands like Tesla.
  • Reputation. The reputation of the car absolutely plays a role in its residual value. For example, you can expect a new Cadillac Escalade to depreciate far more slowly than a Infiniti.
  • Age of the vehicle. The first year is the year that most vehicles will depreciate the most depending on the manufacturer. New Ferrari, Porsche, Mercedes-Benz G63, have a much slower rate vs regular depreciation. That said, newer vehicles typically have better residual value than older used cars, unless the older vehicle is a coveted classic.
  • Inflation adjustments. Most calculations take inflation into account when determining depreciation rates on passenger automobiles.

5 Ways to Maintain the Value of a Luxury Car

  1. Keep up with maintenance. Maintaining proper maintenance on your vehicle means that it will retain its value far better than if it is left to ruin. After all, these vehicles are investments, so why not treat them as such? It’s important to keep up with standard upkeep like oil changes, tread changes, fluid checks, and more to ensure any investment car retains its value for years to come.
  2. Maintain records. It’s important to not just maintain a vehicle but also to keep records of maintenance history. Showing that a vehicle has been well-cared for and maintained can lead to a lower depreciation rate and improve the overall value of the vehicle.
  3. Don’t neglect damages. Getting a cracked windshield or sideswiped vehicle fixed might be a pain, but it’s ultimately worth it in terms of maintaining the vehicle’s value. Vehicles with visible damage to either the interior or exterior depreciate at rates far exceeding unblemished cars.
  4. Pick timeless models. Some vehicles retain their value better than others. Car owners wanting to avoid depreciation will serve themselves well by opting for timeless, popular makes and models of luxury cars like the Lexus LX 600 and even a McLaren P1.
  5. Maintain the warranty. Vehicles under warranty typically have a higher resale value. One of the best ways to maintain an exotic vehicle warranty is to ensure that the exotic vehicle is serviced by people authorized by the dealer.

Depreciation Hit Your Exotic Car Hard? Sell with We Buy Exotics

Luxury car depreciation hit you harder than you expected, and right when you were planning to sell your exotic vehicle? Don’t worry. You can still get the most money for your vehicle when you sell through We Buy Exotics.

Our experts know luxury vehicles inside and out, which is why we are able to give no-obligation cash offers to exotic car owners in just minutes of receiving a little bit of information about the vehicle. We are interested in buying supercars from luxury auto brands like Mercedes-Benz, Land Rover Range Rover, Audi, Porsche, Ferrari, Lamborghini, and more.

If you want to make the most out of your investment vehicle, contact We Buy Exotic and get your quote today.