5-Year Depreciation on $100k Luxury Cars

Buy a $120,000 BMW 7 Series today, and iSeeCars data projects you’ll absorb roughly $65,249 in depreciation alone over five years — more than the purchase price of a typical compact car. The Mercedes-Benz S-Class, another flagship luxury sedan priced above $110,000, isn’t far behind at an average $71,460 in five-year value loss. Meanwhile, the Porsche 911 Carrera, starting around $115,000, loses just $24,428 over the same period. These three vehicles share a price tier but represent almost opposite positions on the depreciation curve.

Key Figures at a Glance

Source: iSeeCars Depreciation Study, March 2024–February 2025 (800,000+ five-year-old used vehicles). Industry comparison calculated as percentage-point difference from 45.6% overall average.

The Flagship Sedan Problem

Flagship luxury sedans are the worst-performing category for residual value. The BMW 7 Series leads all non-EV models in the iSeeCars dataset at 67.1% five-year cumulative depreciation — ranking second overall behind only the Jaguar I-PACE electric vehicle at 72.2%. The S-Class, Audi A8 L, and Maserati Ghibli all cluster between 60% and 65%, confirming this isn’t a brand-specific quirk but a segment-wide pattern.

Edmunds’ True Cost to Own® data for the 2025 model year makes the annual pattern explicit. For the BMW 7 Series 760i xDrive, Edmunds projects $43,245 in depreciation in year one alone — 32% of the vehicle’s total cash price evaporating in 12 months. Years two through five add another $29,664. Total five-year depreciation per Edmunds: $72,909, representing the single largest cost category in BMW’s TCO® estimate. The 2025 Mercedes-Benz S 580 4MATIC follows a similar trajectory: $42,385 in year-one depreciation, $84,353 cumulative over five years.

These figures illuminate the actual cost structure buyers face. A $150k+ household purchasing a 2025 S 580 at its $139,693 total cash price isn’t just committing to $140,000 — it’s committing to absorbing $84,353 in value erosion before selling, plus financing, insurance, fuel, and maintenance. Per Edmunds, the all-in five-year total cost of ownership for the S 580 reaches $151,981.

Source: Edmunds True Cost to Own® (TCO®), 2025 model year. Assumes 15,000 miles/year, 10% down payment, 60-month loan, above-average credit. “Years 2–5 Depreciation” calculated as 5-year total minus year 1 figure. TCO® includes depreciation, financing, taxes & fees, insurance, fuel, maintenance, and repairs.

One figure in the table above will catch some readers off guard: the Porsche 911 Carrera’s Edmunds depreciation estimate of $86,283 over five years appears worse than the S-Class. That’s a trim-mix artifact — Edmunds calculates depreciation based on a specific model’s total cash price ($152,709 for the Carrera), while iSeeCars’ segment-average approach incorporates the full 911 lineup, where base Carreras hold value exceptionally well. The iSeeCars study’s 19.5% five-year cumulative depreciation rate for the 911 is the more useful comparative figure when evaluating value retention across brands.

Why Luxury Flagships Depreciate So Hard

The used luxury sedan buyer doesn’t value the same things as the new luxury sedan buyer. A new S-Class buyer pays a premium for the latest tech, the tactile experience of bespoke materials, and brand prestige. That same car, three years old, competes against a newer S-Class, a newer 7 Series, and a newer A8 — all with updated tech stacks that make yesterday’s flagship feel dated. The used car market applies a steep discount to yesterday’s technology in a way it doesn’t for a Porsche 911, whose core appeal — driver engagement, mechanical purity, iconic design — doesn’t expire with a software update cycle.

iSeeCars Executive Analyst Karl Brauer framed it precisely in the 2025 study: the used car market doesn’t prioritize luxury features to the same degree as the new car market, which systematically disadvantages any vehicle whose primary value proposition is luxury content rather than performance character or scarcity. This structural disadvantage explains why every major German flagship — the 7 Series, S-Class, and Audi A8 L with its 62.7% five-year rate — sits at 60% or worse in the iSeeCars dataset.

Volume plays a role too. Manufacturers push significant numbers of these vehicles into the market through fleet sales and lease programs, flooding the used supply precisely when three-year leases expire. A luxury SUV like the Land Rover Range Rover carries 62.9% five-year cumulative depreciation — bad by any measure — but Range Rover’s lease penetration rate keeps the used market perpetually oversupplied.

The EV Depreciation Overlay

Electric vehicles add a separate depreciation driver that compounds the luxury penalty: technology obsolescence. Range anxiety, battery degradation concerns, and rapid model updates hit EVs harder than comparable gas vehicles on the used market. The iSeeCars 2025 study puts the EV segment average at 58.8% five-year cumulative depreciation — more than 13 percentage points above the overall industry average of 45.6%.

At the $100k+ price point, the Porsche Taycan carries 60.1% five-year depreciation and an average $59,691 dollar loss — the Taycan being the best-performing EV in this price tier that still lands in the bottom 25 of iSeeCars’ full vehicle rankings. The Tesla Model S is worse: 65.2% and an average $52,165 loss. For comparison, the Porsche 911 (gas) loses $24,428 over five years. An S-Class EV buyer is effectively absorbing the luxury sedan penalty and the EV penalty simultaneously.

Battery degradation concerns are measurable in list prices. Five-year-old EVs with battery replacement uncertainty sell at steeper discounts than the depreciation percentage alone implies — buyers bake in the possibility of a $15,000–$25,000 battery replacement bill, which compresses residual values further. This is a structural feature of the used EV market, not a temporary condition.

The Porsche Exception — and Its Limits

The Porsche 911’s 19.5% five-year cumulative depreciation in the iSeeCars March 2024–February 2025 study isn’t luck. The 911 has ranked at or near the top of iSeeCars’ residual value rankings consistently before and after the pandemic. The 2026 iSeeCars study (covering March 2025–February 2026 transactions, 950,000+ vehicles) shows the 911 has improved further, recording just 11.1% five-year depreciation in that more recent period — the lowest of any vehicle in the study.

Three factors drive this. Constrained production keeps used supply tight relative to demand. The 911’s configuration diversity — Carrera, Targa, Turbo, GT3, GT3 RS — creates sub-market scarcity for specific variants. And enthusiast demand for the used 911 is structural, not trend-dependent. None of these advantages transfer to the Cayenne, which carries 52.1% five-year depreciation in the 2025 iSeeCars data. The Porsche badge alone isn’t the protective factor — the 911’s product characteristics are.

Buyers should note that the 911’s exceptional depreciation data comes with a caveat: iSeeCars’ model-level resale data shows 3-year depreciation of approximately 29.9% and a residual value near $155,981 — figures that reflect current used market conditions, including above-MSRP sales of recent 911 inventory. The Porsche 911 Carrera’s 3-year picture still outperforms every flagship sedan in this analysis by a substantial margin.

Finluxy Depreciation Efficiency Score

The Finluxy Depreciation Efficiency Score measures percentage of original MSRP retained after exactly three years of ownership (Score = 3-year market value ÷ MSRP × 100). Higher scores indicate stronger value retention. Scores above 70 are considered strong; below 50 indicate rapid depreciation.

For this analysis, 3-year residual values are drawn from iSeeCars model-specific resale value data where available, and estimated proportionally from the 5-year iSeeCars study figures where model-specific 3-year data was not returned. BMW 7 Series and Mercedes-Benz S-Class 3-year figures are estimated at approximately 67–70% of their 5-year cumulative depreciation rate applied at a 3-year horizon, consistent with typical front-loaded luxury depreciation curves (where year 1 absorbs 40–50% of total five-year loss).

Source: Porsche 911 score based on iSeeCars model-specific resale value data (3-year depreciation: 29.9%, residual: $155,981 on $221,861 base). BMW 7 Series, Mercedes-Benz S-Class, Audi A8 L, and Porsche Taycan 3-year scores are range estimates derived proportionally from iSeeCars 5-year cumulative depreciation study (March 2024–February 2025), applying Edmunds year-by-year depreciation curve data. Estimated ranges carry ±5-point uncertainty. Model-specific 3-year primary source data was unavailable at publication for these models.

The Overlooked Insight: Dollar Loss vs. Rate — Which Actually Matters?

Most depreciation coverage leads with percentage rates, and that framing consistently misleads $150k+ buyers. The BMW 7 Series’ 67.1% five-year cumulative depreciation rate sounds catastrophic — and it is, relative to the industry. But the Mercedes-Benz S-Class at 60.7% generates an average $71,460 dollar loss versus the 7 Series’ $65,249, because the S-Class starts from a higher price base. The Maserati Ghibli, at 64.7%, produces an average $70,874 dollar loss.

What the data shows that most coverage overlooks: for buyers at this income and asset level, the dollar loss matters more than the rate, and the dollar loss is asymmetric in ways that percentage comparison doesn’t surface. Paying $140,000 for a vehicle that retains $46,751 of value after five years (the 7 Series math, approximately) is a different financial outcome than paying $110,000 for a vehicle that retains $88,000 — even if both have “luxury” positioning. The gap between a well-chosen German or Japanese luxury vehicle depreciation curve can be $40,000–$47,000 over five years at these price points. That’s not a rounding error in a $150k household budget.

The three-year depreciation sweet spot reverses this logic for used buyers: the buyer who acquires a three-year-old S-Class or 7 Series captures the steepest portion of the original owner’s loss as a discount. The new buyer absorbs it. Understanding which side of that transaction you’re on — and why — is the actual analytical value of depreciation data at this price tier.

First-Year Depreciation: Where the Real Damage Happens

Edmunds’ year-by-year TCO® breakdown makes the front-loading visible. For the 2025 BMW 7 Series 760i xDrive, year-one depreciation is $43,245 — 59% of the total five-year depreciation of $72,909 landing in the first 12 months. The S 580 loses $42,385 in year one, representing 50% of its five-year $84,353 total. First-year depreciation on luxury cars is the highest-concentration financial event in the ownership cycle.

This structural front-loading is why certified pre-owned programs exist and why they attract financially sophisticated buyers. A 12-month-old 7 Series or S-Class, with the first-year loss already absorbed by the original buyer, offers substantially improved value retention per dollar spent over the remaining useful ownership period. The math changes entirely when you enter at year two.

Luxury SUV Comparison

The Land Rover Range Rover — a luxury SUV starting around $108,000 — carries 62.9% five-year cumulative depreciation and an average dollar loss of $67,858 in iSeeCars’ 2025 study. That places it among the worst-performing luxury SUVs in the dataset, comparable in rate terms to the Audi A8 L. The Cadillac Escalade at 61.0% and 62.9% (ESV) is nearly identical. These aren’t outliers — they’re the rule for full-size luxury SUVs at this price tier.

The depreciation gap between Land Rover and Volvo illustrates how brand positioning within the luxury tier creates divergent outcomes. Volvo’s XC60, a far less expensive entry, still carries 57.4% five-year depreciation in the same dataset — reflecting how the luxury penalty applies even at lower price points, though with a smaller absolute dollar impact. Full-size luxury SUV buyers absorb both the category premium on purchase and the category discount on exit.

What the $150k+ Household Should Actually Decide

The depreciation data at this price tier frames three distinct ownership strategies, each with a different financial profile.

Buying new and holding five-plus years reduces the annualized depreciation burden by spreading it over more years, but still concentrates the largest losses in the first 12 months. A Porsche 911 Carrera’s exceptional value retention makes this the least painful new-purchase scenario in this tier — 19.5% five-year cumulative depreciation means the residual value at sale covers a meaningful portion of the original outlay. A new BMW 7 Series or Mercedes-Benz S-Class held five years produces a depreciation cost in the $65,000–$85,000 range regardless of how carefully the car is maintained.

Buying certified pre-owned at the three-year mark captures the steepest portion of first-owner depreciation as a discount. The analysis of luxury car depreciation curves shows this is most valuable for vehicles with front-loaded loss patterns — precisely the flagships discussed here. A $80,000–$90,000 three-year-old S-Class offers significantly better value retention per dollar of subsequent ownership than its $140,000 new equivalent.

Choosing a model with structurally low depreciation — the 911 being the clearest example in this price tier — changes the total ownership cost calculation substantially. The performance differential between a Porsche 911 and a flagship luxury sedan may or may not matter for a given buyer’s use case, but the $40,000–$47,000 depreciation gap over five years is a real financial outcome that belongs in the purchase decision. The sticker price comparison is incomplete without the residual value projection. Buyers evaluating exotic car and hypercar depreciation, or weighing plug-in hybrid luxury car depreciation realities, will encounter the same structural tensions — performance character and technology content each pull depreciation in opposite directions.