Mercedes S-Class vs Lexus LS: Depreciation Compared

Buy a 2025 Mercedes-Benz S-Class S 500 today and iSeeCars data projects you’ll absorb roughly $70,115 in cumulative depreciation over five years — more than the entire base purchase price of a new Toyota Camry. The Lexus LS 500, priced about $37,000 less at the door, loses an estimated $39,506 over the same period. That $30,000 gap in five-year value destruction is the number most comparisons bury in footnotes.

Key Figures at a Glance

Sources: iSeeCars model depreciation pages (15M+ vehicle analysis); MSRP from Edmunds and official dealer pricing, 2025. Finluxy Depreciation Efficiency Score = % of MSRP retained after 3 years.

The MSRP Gap Creates a False Equivalence

These two luxury sedans are not priced alike, and that matters for any honest depreciation comparison. The 2025 Lexus LS 500 starts at $80,335 before destination — confirmed by Edmunds and corroborated by iSeeCars pricing data. The 2025 Mercedes-Benz S-Class S 500 opens at $117,750, a gap of over $37,000 on the sticker alone. Comparing their depreciation as if they occupy the same financial tier is how car journalism misleads otherwise sophisticated buyers.

The more honest frame: which car destroys more absolute dollars per year of ownership? Both vehicles sit in the luxury sedan depreciation category, where the segment average five-year loss runs 57.6% according to iSeeCars’s 2025 study of over 800,000 five-year-old used vehicles. The S-Class at 59.5% sits fractionally above that segment average. The Lexus LS 500 at 50.2% beats it by nearly ten points — a meaningful advantage even if the LS’s lower starting price contributes to a smaller absolute dollar figure at the five-year mark.

That distinction — percentage depreciation versus dollar depreciation — is where most coverage goes wrong. Explore five-year depreciation on $100k luxury cars and the pattern repeats: higher MSRP amplifies every percentage point of loss into a larger cash figure.

Year-by-Year Value Decay: Where Each Car Bleeds Fastest

The S-Class doesn’t depreciate evenly — it front-loads its losses. According to iSeeCars data based on its analysis of over 15 million vehicles, the Mercedes-Benz S-Class loses 42.4% of its original MSRP in just the first three years, leaving a residual value of $67,804 from a $117,750 start. That is a $49,946 loss before the odometer has turned 40,000 miles for most owners. Understanding how first-year depreciation hits luxury buyers is important context here — the S-Class is particularly aggressive in year one and two, driven partly by the rapid pace of technology refresh in the model.

By contrast, the Lexus LS 500 at three years retains a residual value of $50,955 against its $80,335 base MSRP, representing a 35.8% cumulative depreciation. At year five, the S-Class has surrendered 59.5% of its value versus 50.2% for the LS. The spread actually widens slightly as both cars age: the S-Class seven-year depreciation reaches 70.4% while the LS 500’s sits at 59.4%, per iSeeCars. Ten years out, the divergence is stark — 80.2% for the S-Class against 70.4% for the LS.

Sources: iSeeCars Mercedes-Benz S-Class and Lexus LS 500 model depreciation pages, analysis of 15M+ vehicles. S-Class residual values calculated from iSeeCars data. *LS 500 7-year and 10-year residual values calculated by applying iSeeCars depreciation percentages to $80,335 base MSRP.

Finluxy Depreciation Efficiency Score

The Finluxy Depreciation Efficiency Score measures the percentage of original MSRP retained after exactly three years — the cluster’s standard analysis period. A score above 70 indicates strong retention; below 50 signals rapid depreciation relative to purchase price.

Finluxy Depreciation Efficiency Score = (3-year residual value ÷ MSRP) × 100. Residual value data: iSeeCars, 2025. MSRP: Edmunds, 2025.

The LS 500 scores 64.2 — a 6.6-point advantage over the S-Class’s 57.6. Neither model clears the 70-point threshold that marks strong retention. For context, Porsche’s data on value retention shows the 911 retaining over 80% at three years under the same framework — a different tier entirely for a sports car. Among full-size luxury sedans, however, these scores are representative of the segment’s structural depreciation problem: the category’s average five-year loss is 57.6% according to iSeeCars’s 2025 study, so both cars are shedding value in line with or above their peer group.

The German vs Japanese Depreciation Structural Divide

The S-Class’s steeper depreciation curve is not an anomaly for a single model year or trim choice. It reflects a documented pattern across German luxury flagships. In iSeeCars’s 2025 annual depreciation study — which analyzed over 800,000 five-year-old used cars sold from March 2024 through February 2025 — the BMW 7 Series ranked second-worst for depreciation among all vehicles at 67.1% over five years, losing an average of $65,249 in absolute value. The S-Class at 60.7% ranked 19th on that same worst-depreciator list. The BMW 7 Series depreciation curve is the extreme version of what S-Class owners experience in a moderated form.

The depreciation gap between German and Japanese luxury comes down to two reinforcing forces. First, German flagships carry higher MSRPs, meaning each percentage point of loss corresponds to a larger dollar figure. Second, the used market consistently discounts German luxury more aggressively due to ownership cost concerns — high scheduled maintenance, expensive out-of-warranty repairs, and software complexity. The Lexus LS benefits from Toyota’s reliability reputation in the secondary market, which supports residual values even as the platform ages. iSeeCars’s data confirms the LS 500’s 50.2% five-year depreciation sits 9.3 points below the S-Class and 7.4 points below the luxury large car category average of 57.6%.

The Overlooked Insight: The PHEV Variants Flip the Story

Most depreciation comparisons between these two sedans use the base gasoline trims. What the data shows that most coverage skips: the plug-in hybrid versions create a dramatically different outcome, and not in the direction many buyers expect. The Mercedes-Benz S-Class plug-in hybrid (S 580e) carries a five-year cumulative depreciation of 61.8% — 2.3 points worse than the standard S 500 — per iSeeCars. At its higher MSRP of $128,200, that translates into roughly $79,228 in five-year depreciation in absolute terms. The Lexus LS 500h hybrid at $115,210 starting MSRP projects a five-year depreciation of 52.7% according to prior iSeeCars data, representing roughly $60,726 in lost value — still better in percentage terms but carrying a far larger absolute figure than the base LS 500 due to the elevated starting price.

Buyers who specify hybrid or plug-in hybrid variants specifically for anticipated cost savings should run these numbers carefully. The depreciation reality for plug-in hybrid luxury cars consistently underperforms buyer expectations, and the S 580e is a clear illustration. If the goal is minimizing total cost of depreciation over three to five years, the base gasoline Lexus LS 500 outperforms every powertrain variant of the S-Class on both percentage and absolute metrics.

The Buying Side of the Equation: Used Value at Three Years

Depreciation is a two-sided transaction. Sellers absorb the loss; buyers capture it. A three-year-old S-Class available at approximately $67,804 represents a vehicle that originally stickered near $117,750 — a $49,946 discount on a car that still carries its full feature set and typically falls within an extended warranty window. That is exactly the dynamic described in analysis of the three-year depreciation sweet spot for luxury car buyers.

The calculus shifts when comparing to the Lexus LS 500’s used pricing. A three-year-old LS 500 at approximately $50,955 represents a 35.8% discount from $80,335 new. The S-Class buyer absorbs more absolute dollar loss as a seller but also gets more absolute discount as a buyer — roughly $14,849 more than the LS used discount in pure dollar terms. For $150k+ households evaluating the used purchase, the S-Class’s steeper depreciation actually works in the buyer’s favor if the goal is maximum feature value per dollar at the three-year mark. The question is whether the ongoing total cost of ownership — maintenance, repair, insurance — makes that discount durable or illusory.

KBB’s True Cost to Own data for the 2025 S 500 projects five-year total out-of-pocket expenses (fuel, insurance, service, financing) of $85,820, against total depreciation of $75,086, for a combined five-year ownership cost of $160,906. The Lexus LS 500 projects five-year depreciation of $50,827 and total out-of-pocket costs of $64,773, for a combined $115,600 — a $45,306 total cost of ownership gap. Mileage’s effect on luxury car depreciation rates adds further complexity for high-use buyers: both models experience accelerated residual value decline above average annual mileage thresholds, which is a relevant consideration for buyers putting 18,000+ miles annually on a flagship sedan.

Source: Kelley Blue Book (Kelley Blue Book) True Cost to Own, 2025 model year base trims. Depreciation figures for S-Class from KBB TCO tool. LS 500 depreciation from KBB TCO tool.

Context for the $150k+ Household

For a household in the $150k+ income tier, the S-Class is an affordable purchase in monthly cash flow terms — but depreciation at this scale operates differently than it does for a mainstream vehicle. Losing $70,000+ in five years on a car represents a non-trivial opportunity cost even on a $300,000 household income. The relevant comparison is not whether the payment is comfortable, but whether the $37,415 price premium over the Lexus LS 500 and the roughly $30,000 additional five-year depreciation load produces a commensurate return in daily-use satisfaction.

The data supports a clear framing: buyers prioritizing total cost efficiency over five years should choose the Lexus LS 500, which delivers a lower Finluxy Depreciation Efficiency Score loss (64.2 vs 57.6), lower absolute five-year depreciation ($50,827 vs $75,086 per KBB), and a substantially lower five-year total cost of ownership. Buyers who place high weight on the specific driving experience, technology ecosystem, or status positioning of the S-Class — and who plan to own for three years or fewer — can partially mitigate the cost by selling near or before the three-year inflection point, where cumulative depreciation has already peaked at 42.4% and slows slightly in relative rate thereafter. The pattern seen in fast-depreciating luxury SUVs mirrors this dynamic and confirms that front-loaded depreciation is endemic to premium European brands in the used market.

What color and options specification does to residual value is a secondary factor worth noting: color and options choices impact resale value for both models, with unusual configurations of the S-Class generally recovering less in the secondary market than neutral-specified examples. For the LS, the impact is more muted given the lower initial MSRP surface area. Buyers interested in the exotic end of this segment should compare these figures against hypercar and sports car depreciation data, where the value retention calculus inverts entirely for certain limited-production models — a dynamic the LS and S-Class share no part of.

Both cars depreciate faster than an informed $150k+ buyer should accept without deliberate planning. The gap between them is real, consistent, and data-confirmed. That gap — about 9 percentage points over five years in favor of the LS — should be a line item in any structured purchase decision, not an afterthought.