Six Must-Have Cars that Offer Affordability and Low Five-Year Depreciation

Buying a new car today comes with a much higher price tag thanks to high demand, higher interest rates, and a lingering supply crunch related to a microchip shortage. According to Kelley Blue Book, the average sale price of a new car has soared to more than $49K.

Those with a more constrained budget shouldn’t despair. There are still many vehicles with affordable price points that hold their value, too. Here are six must-have cars that won’t break the budget or be a nightmare to trade in (per data from iSeeCars):

• Honda Civic
• Toyota Corolla
• Subaru BRZ
• Nissan Versa
• Jeep Wrangler
• Toyota RAV4

Low Depreciation Rates Can Lead to Better Trade-In Offers

Buyers might focus on the price of a vehicle at the time of purchase. New vehicles should fit comfortably into the budget so that buyers aren’t stretching their finances. However, most buyers might not research how well a vehicle holds its value over time.

All cars experience depreciation. Driving out of the dealership can cause the car to decrease its value by nine to 11 percent. Over the course of five years of ownership, the average car loses one-third of its original value.

Some vehicles, however, hold onto their value better than others. iSeeCars compiled a list of the cars that offer the lowest depreciation over five years. Why should depreciation rates matter to buyers? A car that holds value can lead to more money when buyers need to sell it or use it as a trade-in for a new vehicle.

iSeeCars reported that the Jeep Wrangler is the vehicle with the lowest five-year depreciation. While the average depreciation rate hovered at 33.3 percent, the Jeep Wrangler only lost 7.3 percent of its value over a five-year period. The Jeep Wrangler Unlimited was the vehicle with the second lowest depreciation rate over five years (8.7 percent).

The site explained that the design consistency of the Wrangler contributed to its low depreciation. Buyers who are looking at an older Wrangler might realize that the design hasn’t changed much over the years. While iSeeCars didn’t delve into popularity, the Wrangler also has a loyal fanbase making the vehicle a desirable choice. This likely helps contribute to its steady valuation.

Other cars noted for their low depreciation included the Honda Civic (16.3 percent five-year depreciation), Subaru BRZ (18.2 percent depreciation), Toyota Corolla (19.8 percent depreciation), and the Nissan Versa (19.9 percent). In addition, iSeeCars included the Toyota RAV4, the Wrangler Unlimited, and the Wrangler among the models that were actually worth more after three years.

Those that are looking for a new vehicle that will hold value longer might focus on the Jeep Wrangler (and Unlimited), the BRZ, Civic, Corolla, and Versa. In addition, the Toyota RAV4 appreciated after three years, and the Jeep Wrangler and Wrangler Unlimited also saw an uptick in price over three years of ownership.

Vehicles with Low Prices, Great Fuel Efficiency, and Top Safety Ratings

The cars with the lowest depreciation are also among some of the more affordable choices on the market. As the price of vehicles has risen, the choice of affordable vehicles has become more limited. For 2022, the Chevrolet Spark was the most affordable model; however, this model was discontinued and isn’t available for 2023.

Buyers who are looking for the most fuel-efficient vehicle could consider the Mitsubishi Mirage. It is priced at $16,245 and offers the best fuel efficiency of any standard vehicle on the market. The Mirage can get an estimated 36 MPG in the city and 43 MPG on the highway. However, its three-cylinder engine doesn’t offer great acceleration and it didn’t earn a safety nod from the Insurance Institute for Highway Safety (IIHS); safety data from the National Highway Traffic Safety Administration (NHTSA) isn’t available. The Mirage also isn’t noted for a lower depreciation rate.

There are multiple vehicles that are priced affordably, offer good gas mileage, and are among the safest on the market. These vehicles also are among those with low five-year depreciation.

Honda Civic

The 2023 Honda Civic has a starting MSRP of $23,450. It can get an estimated 33 MPG in the city and 42 MPG on the highway. The 2023 Honda Civic sedan was named a Top Safety Pick by the IIHS and it also received a five-star safety rating from the NHTSA. The Civic was the 25th most popular vehicle of 2022 by sales volume. It depreciated 16.3 percent after five years.

Toyota Corolla

The 2023 Toyota Corolla is priced at only $21,550 (starting) and can get an estimated 32 MPG in the city and 41 MPG on the highway. The 2023 Corolla sedan also received a Top Safety Pick from the IIHS and earned a five-star safety rating from the NHTSA. The Corolla was the 12th most popular vehicle in 2022 by sales volume. After five years, the Corolla depreciated 19.8 percent.

Subaru BRZ

The Subaru BRZ is a sports car, and it has a starting price of $28,595. While it’s designed for speed, the BRZ also gets decent fuel efficiency—21 MPG in the city and 30 MPG on the highway. The 2023 Subaru BRZ earned a Top Safety Pick+ rating/award from the IIHS (this is the highest safety honor). Data from the NHTSA on the BRZ is not yet available. Over five years, the BRZ only depreciated 18.2 percent.

Nissan Versa

The 2023 Nissan Versa is a small or compact car and it might be the least expensive vehicle available. It has a starting price of $15,730 and can get an estimated 32 MPG in the city and 40 MPG on the highway. While the 2023 Versa didn’t receive a Top Safety Pick from the IIHS, the Versa was awarded a five-star safety rating from the NHTSA. The five-year depreciation rate for the Versa was 19.9 percent.

Toyota RAV4

The Toyota RAV4 isn’t among the list of vehicles with the lowest five-year depreciation, but it is among the vehicles that appreciated after three years (which is a rare feat). The RAV4 was the fourth most popular vehicle in 2022 by sales volume. The 2023 RAV4 has a starting price of $27,975, which makes it a higher-priced model (like the BRZ). The RAV4 earned a Top Safety Pick from the IIHS and received a five-star safety rating from the NHTSA.

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