What is a luxury car for depreciation?

The luxury car limitation is the annual limit on the amount of depreciation that can be applied to a luxury car used for commercial purposes. This amount is indexed each year for inflation. The purpose of luxury car limitations is to control the type and amount of money companies spend on luxury cars for tax purposes. But before you go to the nearest BMW dealership to buy an i3, it's worth knowing that it would have lost approximately 68% of its original value in the first five years.

According to CarEdge calculations, the BMW i3 will have a residual value of approximately 19.38% after 10 years of ownership. The Mercedes-Benz GLE500 is a mid-size luxury SUV with an attractive exterior, superior interior refinement and excellent power. But despite all the good things, the value of the GLE500 plummets by approximately 65% in the first five years. The Mercedes-Benz GLE500 mid-size luxury SUV ranks second for the most depreciating luxury car after five years of ownership, with a depreciation rate of 65%.

It has some positive attributes, including an attractive design and a luxurious interior, but a significant drawback is its significant drop in value. However, together with the high original price, they tend to depreciate considerably. With models such as the BMW i3, Mercedes-Benz GLE500 and Land Rover Range Rover, the significant drop in value after five years of ownership means that you may not make as much money as you expected if you decide to sell it. With an average depreciation rate of 68%, the all-electric BMW i3 compact hatchback ranks first as the most discontinued luxury car after five years of ownership.

Here are 10 luxury cars with steeper depreciation curves than any of their counterparts, measured by the amount of value they lose over the course of the first five years of ownership. While the average new luxury car loses 40-50% of its original value in the first five years of ownership, some models tend to lose much more. On average, luxury cars lose about 40 to 50% of their original value in the first five years of ownership, as HotCars details. The enormous cost of repairing and maintaining luxury cars is primarily responsible for high depreciation rates.

We rank the fastest depreciating luxury cars based on the amount of value they lose in the first five years of ownership.

Minnie Langehennig
Minnie Langehennig

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