Most new cars depreciate quite rapidly, starting the minute they’re driven off the dealership lot. According to Kelley Blue Book, new cars lose roughly 30% of their value in the first 2 years, and an additional 8-12% each subsequent year. This amounts to a significant 55% drop in value over five years, leaving a resale value of just 45%. To put it into perspective, a new car purchased for $40,000 will only be worth $18,000 after 60 months of ownership.
Purchasing a brand new car may not be the wisest financial move. Nevertheless, the need for reliable transportation, the latest safety features, and a factory warranty to cover repairs is essential for some Americans. Conducting thorough research before buying your next car can lead to a more informed decision. Vehicles that depreciate slower than average will provide a better return on investment when it’s time to sell or trade in for your next vehicle.
The Toyota Tacoma is one such vehicle that retains its value exceptionally well. This midsize pickup truck, available since 1995, is known for its longevity, with many models reaching hundreds of thousands of miles without issues. There is even an extraordinary example with over 1.6 million miles on the odometer, proving its durability. In a 2023 report on trucks with high resale values, Motor Trend estimated that the 2023 Tacoma would retain an impressive 73.1% of its original value after five years of ownership.
By 2023, the Tacoma was growing dated
Ironically, Motor Trend described the 2023 Tacoma — the third generation of this model — as reliable yet dated, cramped, and fuel inefficient. This opinion is understandable since the third-gen Tacoma was introduced in 2016, which is quite a while without a major redesign. Some parts of the 2023 Tacoma, like its outdated rear drum brakes, have remained unchanged since 2005. Additionally, its long production run has made its tailgate a frequent target for thieves, as it’s one of several popular and costly parts to replace.
Despite these drawbacks, the Tacoma’s durability, reportedly low maintenance costs, and the reputable Toyota nameplate outweigh the truck’s shortcomings in buyers’ eyes. Toyota vehicles generally have a high resale value. Some models, like the compact Corolla sedan, retain their value even better than the Tacoma. According to industry experts, brand new Toyota Corollas are expected to maintain 81.1% of their original price after five years, while the Tacoma’s SUV counterpart, the 4Runner, is projected to retain 75.1% of its value over the same timeframe.
Consider the option packages carefully
If you’re in need of a pickup truck, opting for a late-model Toyota Tacoma can be a smart move for preserving capital — as much as one can expect from a depreciating asset like a vehicle. The choice of options and trim levels can also have a significant impact. Motor Trend suggests investing in higher trim levels like the Toyota Racing Development (TRD) Pro, TRD Off-Road, or TRD Sport for added desirability. Additionally, choosing the “double cab,” a four-door crew cab version that seats five adults, is recommended.
Interestingly, Tacomas with manual transmissions tend to hold their value better than those with automatic transmissions. However, manual transmission vehicles account for less than 1% of new vehicle sales, and fewer than 20% of drivers are proficient at driving them. Thus, the higher value of manual transmission Tacomas might seem peculiar, except that those who desire a stick shift, really desire it. A TRD-optioned, manual transmission, crew cab Tacoma was projected to retain 80% of its original price after five years with its original owner.
It’s also noteworthy that an all-new, completely redesigned Tacoma is now available — marking the fourth generation. If past performance is any indication of future outcomes, the 2024 and later iterations of Toyota’s highly successful midsize truck should continue to shield its owners from the harshest depreciation impacts.
