New vs. Used: What Actually Holds Value in Luxury Cars

The conventional advice is that buying a used car is always the smarter financial move because the first owner absorbs the steepest depreciation. For mainstream vehicles, this is almost always correct. For luxury cars, the situation is more nuanced.

According to data from industry analysts, most luxury sedans lose 40 to 50 percent of their value in the first three years. The Mercedes-Benz S-Class, for example, typically depreciates by roughly 45 percent in its first three years. This means a three-year-old S-Class that cost $120,000 new might sell for around $65,000 to $70,000. That is an attractive proposition for a buyer who wants the experience of a flagship sedan at half the original price.

Limited-edition and high-performance luxury vehicles tell a different story. The Porsche 911, especially GT and Turbo variants, often maintain 70 to 80 percent of their value after three years. Certain Ferraris and Lamborghinis have even appreciated in recent years, though that trend has cooled in the 2024-2025 market as interest rates have risen.

What this means for buyers depends on what you value. If your priority is minimizing total cost of ownership, a 3- to 4-year-old luxury sedan that has already taken its depreciation hit is the rational choice. If your priority is driving the latest design and technology and you plan to keep the car for 5+ years, buying new makes sense because the depreciation curve flattens after year four.

[UNCERTAIN CLAIM: Specific depreciation percentages for the S-Class and 911 are based on industry sources such as Kelley Blue Book and J.D. Power, but exact figures vary by model year, options, mileage, and geographic market. The 70-80% retention for 911 GT/Turbo variants is directionally correct but should not be treated as a guarantee for any specific purchase.]