Introduction
Lexus resale value is an important factor to consider when buying a set of luxury cars, not just the price at which they are sold to you. Depreciation, maintenance issues, reliability and what you will get out of the car when you trade it all play into the total picture. At Lexus they have done a great job of blending luxury with reliability which in turn makes many of their used cars very attractive to buyers. For people that are going to sell or trade in their car after a few years’ ownership, strong resale value may make the higher base price more bearable.
Compared to BMW, Mercedes-Benz, and Audi, Lexus does well in depreciation. CarEdge reports that over a five year period the average for Lexus is at 38% which is true for most models though performance may vary by which model you choose. This also means that when buying a car what the price is when new is not the only thing to look at but also the trade in value which may be different at the end of the ownership period.
Understanding Lexus Depreciation Rates
Depreciation is the loss of a car’s value as it gets older and puts on miles. With each model year the introduction of new technology, design, and features in luxury vehicles causes that segment to see great amounts of depreciation. But Lexus has a strong case of used car demand, they are known for their dependability and the overall predictability of the cost of ownership. Thus some Lexus models do better at holding their value in comparison to other luxury cars.
Not every Lexus is the same depreciation rate. RX, GX, and ES have done well historically but results do in fact vary by trim, mileage, condition, powertrain, and market demand. Also it is a good idea for buyers to research the specific model before buying instead of which the Lexus logo alone will guarantee great resale value.
Lexus vs. BMW Resale Value
BMW is noted for great driving dynamics, powerful engines, and premium interiors, but in terms of ownership issues depreciation may be a large concern. At present CarEdge reports that the average five year depreciation for BMW is at about 50% which is also true for Lexus’ 38%. That is a difference which may represent a large sum when it comes to resale or trade in.
This is not to say that BMW is a poor choice. What we do see is that for the buyer which puts a premium on performance and driving experience the extra depreciation may be a fair trade. In terms of the buyer which is mostly concerned with the long term financial picture however it may be that Lexus is a more attractive brand. A Lexus that may have had a higher price at the time of purchase will in fact see that price recoup more when the car is put up for sale after 5 or more years.
Lexus vs. Mercedes-Benz vs. Audi
Mercedes and Audi put out competitive models which in terms of design, tech, comfort and performance are top of the range. But there is the issue of depreciation which lessens the financial benefit of purchasing these cars new. What may pass off as a plus point in a new car may by the time of the next model year’s release be made standard in all cars.
Lexus has an innovative approach of putting in premium features which at the same time have a very good reputation for long term dependability. Used car buyers in this case are focused on the car’s reliability once the original warranty is out which they will be the ones to bear. This in turn increases demand for the well maintained Lexus models and we see them do better in resales which in many cases out perform some of the other luxury cars.
Lexus Models With Strong Resale Value
Lexus GX
Lexus’ GX is a leader in the resell category. It’s that much of a desirable vehicle for its blend of luxury, durability, off road performance and unique design which in turn has developed a very loyal following. At present CarEdge reports that the GX 550 sees a 33% drop in value over 5 years’ time which in fact makes it a very attractive choice for buyers looking at total value over time.
The GX also stands out as it fills a niche between full luxury SUVs and rugged off road vehicles. We see great demand in the used market for it. While that is the case it is still recommended to shop around as high resale value does not make a good purchase price.
Lexus RX
Lexus RX is also an excellent choice which it does so by presenting a great balance of comfort, practicality and premium features. Also known for its family friendly luxury crossover image which in turn gives it wide appeal in the used market. This may in fact help sustain demand for the older models.
CarEdge reports that we see a 33% depreciation for the RX 350 over the next five years based on our present models. The RX’s reliability, smooth ride, and practical SUV design which we note also make it a model to put on your list at Lexus when you are focused on resale value.
Lexus ES
Lexus’ ES is an excellent choice for those that want a sedan. It is known for comfort, quiet ride, dependability and every day functionality which in turn may appeal to used car buyers in search of a reliable luxury sedan.
CarEdge reports that we see a 35% five year depreciation for the ES 350. Although SUVs dominate present day sales, the ES proves that a full size luxury sedan still does very well and retains great value when it has a strong reputation and consistent demand.
Advantages of a Lexus Certified Pre-Owned Vehicle.
Buying into a Lexus Certified Pre Owned car is another option which improves on luxury car ownership from a financial standpoint. Instead of jumping into a brand new car that drops in value right off the lot you can go for a well maintained used car that has already seen some of that initial drop in price. This can put a premium Lexus within your budget also which puts you in the car without as great an out of pocket expense while at the same time you get the added benefit of the manufacturer’s backing.
Lexus’ certified pre owned fleet goes through a thorough inspection and comes with an extended warranty. Lexus reports that certified pre owned cars come with a 2 year unlimited mileage warranty, 2 years or 20,000 miles of free scheduled maintenance, and 24 hour road side assistance. While buyers should still do research and compare certified and non certified prices, the program does add peace of mind when you purchase a used luxury car.
How Resale Value Lowers Ownership Costs
The purchase price is just a factor in what ends up being an expensive luxury vehicle. Take for example two cars which have the same price as new. If one does better in holding its value after 5 years’ time, then its owner will put out less money in depreciation even if at purchase it was more.
Lexus’ great resale value also plays a large role in their decision to trade in or sell. While reliability, maintenance, insurance, fuel, and financing are still important factors, depreciation may be your biggest cost. If you are going to put your car up for resale at any point, do your research on the expected resale value before you decide which luxury brand gives you the best overall value.
Tips for Protecting Lexus Resale Value
Maintenance and care is what mainly determines resale value. By following the recommended service schedule, keeping maintenance records, avoiding unnecessary modifications, and in maintaining a clean interior and exterior you can make your Lexus more attractive to future buyers. Also with regard to mileage which does play a role, try to keep it down when possible to protect the car’s market position.
Timing of the purchase and price paid is key. Even a Lexus which does well in terms of resell may still be a bad financial decision for the buyer that pays way over market value. Before you buy or sell, do your research on dealer options, used cars, trade in values, and similar models. The best approach is to go in with a great model at a low price and take care of it during the term of ownership.
Conclusion
Lexus has what may be called out as the best resale value which many of its German luxury counterparts lack. BMW, Mercedes-Benz, and Audi do well in performance, tech, and luxury but in the long term that which they put out also has high depreciation. What Lexus brings to the table is its reliability, has a large demand for their used cars, they have practical models and a reputation for lasting.
For luxury value conscious buyers we see the Lexus GX, RX, and ES as great options. Also into buying pre owned but certified from Lexus which in turn reduces the impact of early drop in value and has the added benefit of an extra warranty and maintenance packages. Also what we see is that Lexus has set out to present the luxury car as an investment beyond just a premium product. By looking at the picture of a car’s performance in terms of how it devalues over time, its resale value, the cost of maintenance and its dependability buyers can make better informed financial decisions for the long term.
