The analysis of the residue values of 800,000 five-year-old used cars from March 2024 to February 2025 by iSeeCars.com reveals several key insights:
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Regular-Car Brands Dominance: The top 25 vehicles retain a high percentage of their original value, with thousands from classic car brands like Ford, Mercedes-Benz, and Audi. This suggests that these models evade significant depreciation compared to luxury or electric vehicles.
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Loyalty of Specific Brands: Models such as the Infiniti QX80 and Maserati Ghibli are among the weakest, with 67.1% and 64.7% losses respectively. Regardless of their valuation achievements (e.g., premium design or production quality), these models lose value faster.
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Revenue Impact: The overall industry average loss is 55%, outpacing the 45.6% for all vehicle segments. This low retention rate is causing market pressures, as higher depreciation rates lead to increased inventory turnover and higher costs for dealers.
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Technological Advancements: While Tesla and car brands equipped models for LTE (Low Earth Orbit Technology) show high losses, electric vehicles like the Jaguar i-Pace and Model Y continue to falter, invalidating the initial thought that these models would not struggle.
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Market Trends: COVID-19 and its effects on car manufacturing have driven the resurgence of certain models, leading to unpredictable valuations. The trend shows a decline in driver confidence, with prices adjusted below market levels, indicating a dynamic, evolving market.
- Economic Factors and Execution: The pandemic accelerated car shipments, leading to lower marginal valuations. dealers and sellers face pressures to evade premium pricing, impacting metrics like mileage requirements and mileage thresholds.
In conclusion, while the majority of vehicles aren’t overtly depreciating, those that are show the worst case scenarios. These include luxury and older, traditional models. The reasons include market trends, technological advancements, globalization effects, and driver behavior. This nuanced picture reflects the dynamic evolution of the used car market.
