Why Jeeps Hold their Value Longer than other Brands

The popularity of Jeeps has never been higher. You may have noticed many more out on the roads in recent years and there's a good reason for it. Jeeps, especially the iconic Jeep Wrangler, are famous for keeping their value much longer than other vehicles. But why? It’s not like they’re magically aging slower than other cars on the road is it? Let's dig in and see if we can figure it out.

 

Reputation


Jeep’s have a well built up reputation for reliability and durability. Before we even get into whether that’s true or not, that’s the Idea most people have about Jeeps. Dating all the way back to their origins in World War 2. They’re seen by many (and more importantly marketed as) the most reliable brand on the scene.



Reality doesn’t quite live up to this reputation. Studies have found that Jeep ranks average among Brands for reliability rating, not noticeably higher than the competition, not noticeably lower either, 15th out of 32 brands rated. But that reality doesn’t matter as long as people believe it’s true.


Money is weird like that sometimes.



Lack of Competition


When it comes to compact 4x4 vehicles, at least in North America, there’s only really one option. Sure there are other options if you go looking, but Jeep has obtained total cultural ubiquity in that field. Like how Band-aids are just the name for those small sticky


bandages, the name of a compact 4x4 is a Jeep, regardless of the actual make of the car. If it looks a bit like a Jeep, people will call it a Jeep.


Jeep has become the word for that type of vehicle, like “truck” or “sedan”. It may sound silly but the Mercedes G-class SUV is still a Jeep. That's why it’s so hard for other brands to compete in that field.


Since there’s no other competition, when people are looking to buy and sell this kind of vehicle they’re only looking for Jeeps, and as such the price stays higher for longer.


Low Depreciation


Economics are weird sometimes. There's an argument to be made that we’re at the point now where part of the reason Jeeps hold onto their value is exactly because they have a reputation for holding onto their value. It’s a weird Self sustaining loop. But Jeeps ability to hold on to value is very impressive nonetheless.



A breakdown of the Wrangler shows that after 5 years of use it will have depreciated about 35% of its original value, that's an outstandingly low number. For context, another SUV like the Ford Explorer has a depreciation of around 50% after 5 years, and that's typical for most vehicles on the road. The reasons may be complicated but regardless, the numbers speak for themselves.


To be honest we’re not so sure Jeep isn’t using a little bit of magic after all.


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