jrmckinley

Like many of us here, I'm constantly perusing different makes/models online to see what is available for sale and at what price and am pretty interested in numbers/analytics associated with used car prices. I've owned 3 iterations of the LS for the last 10 years of my life and currently loving my 460, but one vehicle I've always loved is the 4Runner (having owned two of them in the past). So I've been just looking online at 2014 4Runner's and stumbled on an interesting question- why does an LS460 depreciate at a significantly more rapid pace than a 4Runner? Because anyone with a $35k budget can buy either car, with the same mileage, in the most-recent facelift of each model. Here are some thoughts to consider:

• I'd argue the GS is in the most competitive segment of luxury sedans- and therefore when buying used you can typically get a screaming deal on a GS. High production, lots of competitive models also with high production equals tons of options for the used car buyer. I think the same can be said for the 4Runner. Very high production, they're a dime-a-dozen on the road, lots of competition, so buyers have lots of options. This should drive lower prices just like it does in the GS segment.
• Clearly the LS is intended to be a low-volume seller but still faces decent competition from competing brands. But still, you have less options, lower availability of any option from any brand, and that should equal price holding a bit higher. Look how many members here on the LS forum search for 6+ months to find the car they want...

So just for kicks, I looked at 2014 4Runners and 2013 LS460's (the first model year of a facelift for each). On eBay, I have a few sellers that I follow out of Texas and one of them actually had both a 2014 4Runner Limited and an LS460. So I'm comparing two different vehicles from teh same seller - and I found cars with very similar miles. Doing a quick search on CarGurus, it appears that the original sticker prices when each were new were somewhere in the general range of:

• 2014 4 Runner Limited: $42k
• 2013 LS460 RWD: $72k

Here's what I find fascinating - the Texas seller has a 2014 4 Runner Limited with 37k miles for $37k- they also have another 2014 Limited 4 Runner with 16k miles for $35,500. So lets split the mileage difference and price difference and say you can get a 2014 Limited 4Runner with 25k miles from this seller for an asking price of $36k. Guess how much the asking price is for a 2013 LS460 is with 23k miles from the exact same seller? $36,900. So the LS460 has depreciated just under 50% from supposed sticker while the 4Runner has depreciated just under 20% (granted the 4Runner is one year newer, but you get the point). And for someone with a $35k budget, they could get one of the more refined luxury sedans or a dime-a-dozen, wildly reliable, but otherwise very standard SUV. Tough choice..

Here are the listings for kicks:
https://www.ebay.com/itm/Lexus-LS/40...Za6J10&vxp=mtr

https://www.ebay.com/itm/Toyota-4Run...pa7zU3&vxp=mtr

Thoughts?

Johnhav430

Without following these two vehicles, I would wonder what the list v. sell prices are on a LS460. If it is like GM, using my dad's case specifically, he bought a brand new 2017 car that had a 39,xxx list, for 31,xxx plus sales tax. This implies there should never, ever, be any of his car, likely equipped, on eBay, for more than 31,xxx USED.

Someone might say that's a 39k car, how come it's only 27 (which is more likely) for a < 12 mo. old car with only 6k miles?

Answer is it was never a 39k car, that's an inflated list price. It's a 31k car, which has depreciated to 27k. my .02

Also, I see used Land Cruisers going for what seems to be unreasonable used prices, even with 200k miles. Demand is my guess.

jrmckinley

Valid point but I don't think it applies to either the LS or the 4Runner. Even if there were some major discrepancy between the sticker & sell price on the LS (like sticker says $72k and you get it for $62k - which is over 15% off), the depreciation of the LS is still wildly higher than the 4Runner.

I own an LX570 and attest to what you're saying about LandCruiser selling prices. That actually adds to my curiosity of why the LS depreciates the way it does- the LX and LandCruiser are low production vehicles just like the LS - so why does the LS behave differently in the used market? I would have to research, but my guess is the production volume of LandCruiser + LX is very similar to overall production of LS. Only thing I can think is the LX is notoriously known for owners holding on to them for 10+ years so there may be lower used inventory on the market at any given time. Maybe the LS is leased more often and therefore a steady flow of cars every 3-4 years?

mmarshall

A simple, one-word answer....demand. SUVs are selling today.....sedans aren't.

Toys4RJill

jrmckinley

I don't think it's that simple. A GS doesn't depreciate nearly 50% off sticker in the same time frame like the LS. And that's a WAY more competitive segment.

Johnhav430

My one curiosity that I could never get an answer to. A 2006 LS430 may have stickered for $65,300. What did it sell for, in October, 2005? My hunch is it had to have been more than 10 grand off list, maybe 20. Because when I drove them at a Lexus event in July 2005, nobody at all was even interested in them. They all sat there waiting for people to test drive. Even the ES had a long line, the IS a super long line. The BMW 2006 330i that Lexus brought was the most popular vehicle at the event.

Because cars are a market, the steep initial discount when new, can never be "erased," it will follow the vehicle forever.

The other thing is, if you are not selling, it's inconsequential. BMW forum does this all the time. Why is my car only $8900 per carfax? I paid 45k for it! If you're not selling it, who cares? lol My home went down 35k on zillow in a month, now it went back up 22k. Should my emotions follow that price trend (zillow is a feel good anyway inflated)?

jrmckinley

But that's why I used percentage of depreciation from sticker instead of dollar value depreciation from sticker. Percentage is relevant no matter the price point.

mmarshall

True, but you can't compare either one of them to a 4Runner's depreciation (or lack thereof). The 4Runner holds its value because of demand, because it is an SUV in an age of SUVs, and, like Jill points out, because it is built to last 300,000 miles. More then fifteen years ago, back when I was driving Toyotas and my Lexus IS300, the Service Manager at my local Toyota shop (who was also a personal friend of mine), told me that they not only sold used 4Runners on the dealer lot with 175-200K miles on them, but, even at that mileage, they had minimal problems with them. And that was the better part of two decades ago. One would assume that, in some ways, 4Runners have become even more reliable since then....hence their value.

jrmckinley

Fair point, but I'd say that reliability logic applies to Toyota's in general. I sold my 1996 LS 400 with close to 275k on the odometer (no problems), sold my 2004 LS430 with 250k (no problems), drove a 4Runner to 200k (no problems), Sequoia to 180k (no problems) and have an LX570 with over 100k (no problems). It's the whole reason I stay so loyal to the brand. I'm scared to deviate because reliability is so important to me and I've become so accustomed to owning cars that require little outside of the recommended maintenance. I bought an Audi S5 about 2 years ago - kept it for a year and put under 2k miles on it (it had 47k miles on it when I bought it) and I was way more scared to drive that than my 430 with 240k miles on it... Seemed like every time I started the S5 I was holding my breath waiting for something to beep at me.

So.... if reliability is a consistent theme across the Toyota brand, something else has to be driving the variance in depreciation.

DaveGS4

iTrader: (2)

You picked one of the consistently '10 best' least depreciating vehicles to compare to.


https://www.roadandtrack.com/new-car...value/?slide=3
https://www.carscoops.com/2018/02/to...east-one-year/
https://www.caranddriver.com/news/wh...tion-disasters
https://cars.usnews.com/cars-trucks/...t-depreciation

Toys4RJill

jrmckinley

Interesting, thanks.. That explains the slower % depreciation of the 4Runner, but still not sure I understand the accelerated % depreciation of the LS. What's really interesting is the Road & Track article says the 4Runner only loses 12.7% after one year - in the 4Runners I posted for comparison to the LS that means in the 3 subsequent years they only lost a total of about 6.5% in additional depreciation.

jrmckinley

Good idea on the GX. Can't understand the 2 data points on CarGurus for the 2014 GX sticker - one says $49k and the other says $60k. Either way, a 2014 GX with 27k miles is looking about $38k - so a $2k premium over a 2014 4 Runner Limited with the same miles. That leads me to believe the $49k sticker (4Runner was $42k). So the GX depreciates slightly more over the same time period than the 4Runner.

Toys4RJill