Most cars depreciate, or lose their value, over time. But some vehicles depreciate more quickly than others. Considering how expensive a new car can be — around $48,000 on average in 2024, according to Kelley Blue Book — the last thing you want is to spend your hard-earned money on a vehicle that’s suddenly worth hundreds or even thousands of dollars less than it was when you first drove it off the lot.
The Mercedes-Benz E-Class is a luxury hybrid vehicle that goes for over $62,000 retail. The BMW 3-Series class goes for even more than that. Both are also cars that tend to lose their value quickly.
“In my experience, both professionally and personally, luxury hybrids in the BMW 3-Series and Mercedes E-Class classes often lead the pack in early depreciation,” said Jason Farrell, a certified master technician at Mechanic’s Diary.
“With premium brand badges comes premium pricing — sometimes $10K or more than their non-hybrid variants,” he continued. “But after a few years, they’ve lost 30% or more just from driving off the lot. Unless you really rack up the miles, you’d be hard pressed to make back that higher upfront cost solely through fuel costs.”
The Toyota Camry retails at about $29,000 new, which is significantly lower than what you’d get with luxury hybrids. That being said, this vehicle can also depreciate surprisingly quickly.
“Even mainstream models like the Toyota Camry hybrid can unexpectedly dip 25% after 36 months,” said Farrell. “Now, the fuel difference is smaller to make up, say $3K. But factor in typical hybrid maintenance over that time, too, and it may take closer to 5 years before you feel like you come out ahead.”
The 2017 and 2021 Lexus ES 300h are both comfortable hybrids with a great aesthetic. They’re also spacious and have great fuel economy. They cost around $43,000 new.
But according to CarEdge, these models lose value fairly quickly. In the first five years of ownership, you can expect them to depreciate by roughly 38%.
The Audi A8 is a plug-in hybrid model. This vehicle comes with a lot of legroom, is comfortable and offers a smooth ride. It retails for around $95,000 when new.
According to CarEdge, this vehicle has an expected depreciation rate of 52% after five years. This assumes the vehicle was purchased new and is driven about 12,000 miles a year.
Melanie Musson, an auto industry expert with AutoInsurance.org, suggested steering clear of the BMW 5-Series hybrid due to how quickly it depreciates.
“The 5-Series Hybrid loses almost 60% of its value over the first five years,” she said. “Luxury cars tend to be some of the fastest-depreciating vehicles, and even though, as a whole, hybrids retain their value well, this BMW model follows the luxury depreciation trend.”
While a brand new Chrysler Pacifica Hybrid costs roughly $50,000, you can find older models for much less. These vehicles are roomy and tend to get good gas mileage — just like most hybrids do. But they depreciate quickly.
“It’s hard to justify the benefits of driving a hybrid when a new Pacifica hybrid will lose over 46% of its value over the first five years,” said Musson.
With a starting price of around $30,000, you might be tempted to go with the Hyundai Sonata Hybrid. And if you want something you can drive for a long time and aren’t worried about its long-term value, this could be a good starting hybrid vehicle.
But in terms of depreciation, it might not be the best option.
“Even though the Sonata Hybrid is priced low, the fact that it loses over 40% of its value in the first five years makes it one of the worst hybrid investments,” said Musson.
Buying any vehicle is a financial commitment, so be prepared for any and all costs that go with it.
“There are two types of costs to consider when buying a car: up-front and ongoing costs. Despite being true for when you buy any type of car, what falls under each type of costs differs for hybrid and electric vehicles,” said Renée Horne, chief marketing and customer experience officer at Chase Auto. “Typically, hybrids cost more upfront than their traditional gas-powered counterparts but save money over time due to generally lower maintenance costs and savings from gas.”
With that being said, hybrid vehicles can come with hefty repair costs, too. Sometimes, these extra costs make it even harder to justify the purchase.
“As the guy who’s been under the hood of nearly every make and model, I’ve seen first-hand how hybrid components like electric drive motors add complexity — and repair bills,” said Farrell. “Unexpected repairs or an early battery replacement, which tend to strike closer to the five-year mark, have [the] potential to completely wipe out any savings at the pump.”
Take into consideration the vehicle’s purchase price and the ongoing cost of ownership associated with the specific model you’ve chosen. Know how much you can comfortably afford, and make a budget that covers any planned and unplanned costs to avoid stretching your finances too thin.
