BMW Vehicle Depreciation: Key Factors Buyers Should Understand
Purchasing a BMW often represents realizing an aspirational dream for many drivers. The BMW badge carries an air of luxury, performance and status for auto enthusiasts and everyday commuters alike. However, the emotional fulfillment and driving excitement of owning the Ultimate Driving Machine must be weighed against the cold, hard realities of BMW depreciation.
As with other German luxury brands like Mercedes-Benz and Audi, new BMW vehicles experience steep depreciation in their early years. The rate of depreciation varies by model, so it’s essential for shoppers to understand the BMW depreciation curve before signing on the dotted line.
How Quickly Do BMWs Depreciate?
Industry analysis shows BMWs shed up to 50% of their value in the first 3 years after purchase. By the end of the 5th year of ownership, a BMW vehicle is generally worth only about 35-40% of its original MSRP.
This means the joy of driving a brand new BMW comes with a hefty price in rapid depreciation. However, not all models depreciate at the same pace. Let’s examine the key factors that influence BMW depreciation below.
Main Factors Influencing BMW Depreciation Rates
While all BMWs experience high depreciation compared to mainstream brands, certain models, body styles and ownership situations accelerate the depreciation curve faster than others:
Model Year
- The most recent model years always carry the highest resale values
- 2021 and 2022 model years currently provide best value
- BMW lease returns flood the used market and depress prices
- Discontinued models or generations tend to depreciate faster
| Model Year | Avg. % of Original MSRP Retained |
| 2022 | 100% |
| 2021 | 91% |
| 2020 | 81% |
| 2019 | 72% |
| 2018 | 64% |
| 2017 | 58% |
| 2016 | 51% |
| 2015 | 45% |
In general, buyers receive the most residual value purchasing BMW cars under 5 years old.
Vehicle Model and Body Style
- BMW luxury flagships like the 7 Series notoriously depreciate faster
- Coupes and convertibles shed value quicker than sedans
- Performance-focused M models hold value better than standard trim lines
- Odd bodystyles like the X6 SUV/Coupe depreciate rapidly
Mileage and Condition
- A BMW with lower miles retains significantly higher value
- Poor condition, accidents, smoking impact depreciation
- Higher than average mileage for the model year accelerates depreciation
- Extensive service records help luxury vehicles hold value
BMW Depreciation Analysis Tools
Fortunately, a wealth of data on BMW depreciation curves exists to help buyers make an informed decision. Online tools like CarEdge’s BMW Depreciation Calculator provide handy model-specific forecasts.
Shoppers can input variables like purchase price, mileage, options and location to receive custom forecasts. This data empowers buyers to calibrate expectations on depreciation and compare total cost of ownership across different BMW models.
Best Years and Models to Buy Used
For savvy BMW shoppers open to purchasing used, certain model years and vehicles represent particularly strong value choices:
Recommended Used BMW Years
- 2021
- 2017
- 2013
These model years strike the optimal balance of retaining significant value while avoiding the steepest depreciation years.
Recommended Used BMW Models
- 3 Series Sedan
- 5 Series Sedan
- X3 Compact Luxury SUV
- X5 Midsize Luxury SUV
Sedans and compact crossover SUVs like these hold their value better than niche performance models. The 3 and 5 series in particular are considered the “sweet spot” for CPO BMW values.
When evaluating used BMW listings, prioritize the following:
- Low mileage relative to model year
- Complete service records
- No accident history
- Garaged vehicles
- Single owner
Models meeting these criteria will have best retained their value over time.
The Importance of Total Ownership Cost
While depreciation represents a major portion of any car’s total ownership cost, additional factors also weigh on the overall value equation:
- Fuel efficiency – More miles per gallon means fewer trips to the pump
- Insurance rates – Premium luxury models often carry higher premiums
- Cost of replacement parts – BMW OEM parts tend to run higher than mainstream brands
- Routine maintenance – Following factory recommendations is key
BMW models requiring premium grade fuel face steeper gas costs as well. When possible, buyers should calculate their total cost of ownership estimation over a ten to twelve year ownership period – generally considered the useful vehicle lifespan.
Higher trim lines with additional luxury features often carry the worst total ownership costs. A more modest BMW build with an efficient drivetrain maximizes overall affordability.
Conclusion and Final Tips
The bottom line is no BMW will ever hold its value like a mass market Toyota or Honda. However, going in with realistic expectations around BMW depreciation can lead to smart purchase decisions. Here are quick final tips:
- Prioritize 2021 and 2022 model years
- Sedans retain value better than coupes/convertibles
- Seek lower mileage CPO vehicles when possible
- Use online tools to forecast depreciation
- Calculate total ownership costs beyond purchase price
- For best value, buy used and hold your BMW for over 10 years
Following this guidance combines the prestige and renowned driving dynamics of a BMW ownership experience while optimizing affordability. Even in the face of rapid depreciation, that remains an alluring proposition for many auto buyers across the globe.
