Cars, SUVs, trucks, and all forms of motor vehicles will probably be the second largest purchase any of us will make, other than our homes. A car buyer must understand the concept of depreciation if the aim is getting the most bang for your buck, long-term value, and making informed decisions when purchasing and financing.
Depreciation is the rate at which a vehicle loses value over time. Several factors influence this decline, such as whether the vehicle is new or used, mileage, condition, and market demand. A few imports and American-made vehicles are known to depreciate as much as 50% once they are over the curb.
Sport Utility Vehicles (SUVs) are immensely popular due to their practicality while catering to diverse lifestyles. Families who need extra cargo space and plenty of power to tow a boat or camper need the advantages of an SUV.
Nearly every global automaker has some type of SUV in its lineup, and each model, new or used, will vary widely in value. Depreciation rates will also fluctuate within industry segments. Due to their popularity and demand, SUVs generally retain their values better than other vehicle types. Brand names such as Toyota or Lexus are a significant factor when examining depreciation rates and long-term values.
What SUVs Depreciate The Least?
SUVs of every size, shape, number of rows, and engine type are coming out of the woodwork and being produced in unprecedented numbers. Even Lamborghini has an SUV; however, the Urus, priced at a cool $241,843, may not be suitable for the middle-income family of four.
Several 2024 SUVs offered to the American consumer provide stellar long-term stabilized values, including the Toyota 4-Runner, Jeep Wrangler, Honda CR-V, and the Subaru Outback. We cover each of these SUVs.
Toyota 4-Runner
Toyota has been producing this outstanding SUV since 1984, and sales are as brisk now as they were 20 years ago. The 4-Runner, starting at $41,655, continues to offer distinctive styling, unquestionable safety, and reliability ratings and is perfect for rugged terrain.
The 4-Runner has a strong reputation for excellent resale values over three and five years as compared to other SUVs. This outstanding SUV will depreciate about 39% over five years, with the average buyer paying 79% of the original price. Edmunds states that a well-equipped TRD 4-Runner depreciates about $5400 in the first year and $3400 in the fifth.
Toyota has not given the 4-Runner a facelift in decades; however, buyers are everywhere. The V6 engine has a spirited 270 HP with a five-speed automatic, and it is not fuel efficient. Since there have been no major upgrades to the truck frame, technology and comfort may be lacking for some purists.
Toyota has improved several areas of the 4-Runner, such as cargo loading, an upgraded infotainment system, and enhanced driver-assist features.
Jeep Wrangler
No other SUV on the global market has the distinctive look of a Wrangler. In 1940 the Army invited automakers to submit their designs for all-terrain reconnaissance vehicles, with Willys Overland winning the contract. The CJ designs, beginning in 1949, are the consumer forerunners to the modern Jeep Wrangler.
The 2024 Jeep Wrangler, which starts at $31,995, can go as high as $102,000 with the Rubicon model. The Wrangler continues to be the king of off-road. With the right equipment, the Wrangler can go anywhere it is pointed. Engine choices have expanded considerably in recent years, with the 285 HP 3.6 Liter V-6 as the standard powerplant. For added performance, choose the 6.4 liter V-8 with an astounding 470 HP to go blindingly fast off-road. Imagine a Wrangler going from 0 to 60 in 6.1 seconds.
The Jeep Wrangler retains its value really well, with a typical depreciation rate of about 34% over five years. The demand for a good-running and well-maintained five-year-old Wrangler will have a resale of about $38,610, and the numbers continue to go up.
The Wrangler offers the creature comforts everyone must have, with technology and entertainment upgrades available. There are seven models to choose from, and the Wrangler is on every off-road list. There are plenty of competitors, but only one Jeep Wrangler.
Honda CR-V
Honda is not known for producing mountain-climbing SUVs, and the CR-V is no exception. Global Honda builds everything from lawn mower engines to ATVs and Jets; however, the company is rapidly moving into the mountain-climbing SUV segment with its Passport and Pilot models.
The CR-V, which starts at $31,450, is a great compact crossover SUV with a comfortable cabin and a fuel-efficient 1.5-liter turbocharged four-cylinder offering 190 hp. The 0 to 60 is a bit sluggish for the four-cylinder, but overall, a peppy engine.
The Honda CR-V offers plenty of technology and infotainment options for the entire family. Seven and nine-inch touch screens, Apple CarPlay and Android Auto, are part of the package. Families will find the CR-V one of the safest small compacts on the market with loads of driver-assist technologies.
The CR-V holds its value with a five-year depreciation rate of around 21.9%, resulting in a resale value of $19,776. After five years, the CR-V will lose about 35% of its value. Overall, Hondas are some of the best cars and SUVs on the road.
Subaru Outback
The Outback debuted in 1995 and has created one of the most loyal followings of any vehicle on the road. Subaru adds plenty of value for the money with standard AWD, spacious interiors, and an all-around comfortable ride.
The Subaru Outback’s base engine is a 2.5L flat four-cylinder with 182Hp and lots of torque, starting at $28,895. The transmission is an innovative, continuously variable-speed automatic. Another innovative feature is descent control, a driver-assist feature that helps drivers maintain a safe distance from the car ahead.
Plenty of Subaru technology and entertainment systems have been added to the Outback for 2025.
The Subaru Outback has slightly underwhelming depreciation rates compared to other SUVs in the sub-compact class. The Outback will lose approximately 42% of its value over five years, resulting in a sale price of about $23,209. The Outback will lose, on average, 27.6% after three years.
The Outback is an extremely efficient vehicle to maintain and handle well in off-road situations. Overall, the Subaru Outback is a good mid-sized SUV for the money.
Why Does Depreciation Matter When Buying an SUV?
Most consumers do not consider or know the true cost of ownership of the vehicle they are about to purchase. Car buyers usually research only the purchase price or maybe the cost of financing.
The total cost of ownership includes not only the purchase price but also the financing rates, insurance, fuel costs, maintenance, repairs, and, of course, depreciation.
Vehicles steadily lose their value over time and are considered one of the highest costs of ownership. No money is taken from your pocket; however, depreciation affects your cash outlay when it is time to trade in or when selling the vehicle. SUVs are more expensive than ever, and most industry experts believe they cost consumers a minimum of $3,334 a year. Buying a used SUV is a viable option because the first, second, and third years of depreciation have been factored into the price. One of the many valuable tools available on the internet is a depreciation calculator. These simple yet effective tools help the consumer understand depreciation and how the steady decline in a car’s value will impact their next vehicle purchase.
