We take a look at the resale value of the seminal Lexus ES premium sedan in Malaysia.
It’s hard to believe but just thirty years ago – in 1990 – East and West Germany reunified, the Hubble Space Telescope was deployed, and Madonna’s song Vogue spent multiple weeks at the top spot, and just a year earlier, Lexus started selling their first two models, the LS and ES models.
Fast forward 30 years, which will make most Xennials and Millennials feel quite a bit older. Germany is the economic powerhouse of Europe, we have an International Space Station, Madonna is 62, and Lexus, at first thought to be a fluke stab at the luxury segment (competing with the likes of BMW and Mercedes-Benz), now sells their brand of premium luxury in over 70 countries.
In all their models, Lexus has a forged a heritage of luxurious design and exceptional build quality. These traits, in turn, keep Lexus cars in high regard and high demand on the used car market. The ES is no different, being the second model to be introduced by the brand; it goes up against the likes of the Mercedes-Benz E-Class and BMW 5 Series in the premium executive category.
The ES started out as a more upmarket version of the Toyota Camry, and in its first five iterations, it was based on the same platform as its sibling from Toyota. This gave rise to certain circles calling the ES nothing more than a glorified Camry with a substantially higher sticker price. However, that might be only telling half the story – the ES in many cases, offered engines that are more powerful, better safety features, high-end equipment, and better materials for the interior.
The sixth-generation XV60, launched here in 2013, still shared some parts of the Camry platform, but major components of the engine and chassis were farther apart – creating a distinct character and driving experience for the ES. The new snazzy-looking, fully imported model was offered here in three variants, the ES250, ES250 Luxury, and ES300h.
The former two were powered by a (181hp/235Nm) 2AR-FE 2.5-litre naturally aspirated four-cylinder, mated to a six-speed automatic. The 300h was powered by the (158hp/213Nm) 2AR-FXE 1.5-litre Atkinson Cycle four-cylinder engine combined with a 105kW electric motor for a combined output of 202hp, paired with an eCVT automatic.
An impressive safety suite for the ES250 models included 10-airbags, stability control, traction control and Tyre Pressure Monitoring System (TPMS).
The facelifted version of the (XV60) ES model was introduced to the Malaysian market in 2015. The same three variants (albeit with new trim packages) were offered at the following prices:
Styling updates of the facelifted ES included the bolder looking rendition of Lexus' signature ‘spindle grille.’ The signature LED daytime running lights were now arranged in an ‘arrow-head’ pattern. At the back, the tail lamps featured an L-shaped light pattern.
The list of safety features was expanded to include Hill-start Assist (standard for all variants), Blind Spot Monitor and Rear Cross Traffic Alert. The latter two are only available in the ES250 Luxury and ES300h.
On the Inside, the ES received a new genuine leather and woodgrain steering wheel and revised steering wheel-mounted buttons layout. The trademark Lexus Remote Touch Interface control for the 8-inch infotainment display has also been improved for better user-friendliness.
Powertrains were as before.
For this report, we will be analysing the average resale value of the Lexus ES model using iCarData. Our in-house algorithm-based tracking program is able to track and analyse ad listings of a particular model throughout a measured timeframe. By tracking the period ad listings for a particular model, as they were advertised, we are uniquely able to draw a graph representing the depreciation rates of the model over time.
Based on iCarData, here is the summarized data for depreciation:
The Lexus ES has some of the lowest first- and second-year depreciation rates we have ever seen for a premium vehicle. At just 8 and 17 percent respectively, in those two years, the value retention of the ES is comparable to much cheaper cars such as the Honda City and Perodua Myvi.
This speaks volumes of its overall brand desirability and uniqueness in the market.
Though the depreciation rates tend to go up in the third and fourth years, the third year being the more substantial of the two, a 17 percent drop in value in 2018. This could be down to competitor model launches (we know the G30 5 Series was launched in 2017) and other factors such as financing approvals.
Another slight disadvantage of the Lexus is the three-year warranty package. This directly correlates to an additional selling price for the owner if he/she wishes to sell their car within the warranty period which guarantees additional peace of mind for the second-hand buyer.
We see this take effect with the dip in prices between 4th and 5th years of service - a sizeable drop of 12 percent in the last year. We must take into account, that given the model is relatively new, and given the ES doesn't sell in great numbers, there can be a margin of error from the relative lack of data points.
With that said, we can assume, the ES will stabilise its prices in the following years, as most premium sedans do, once their asking prices dip below the RM100k range, and with overall desirability still high.
From the data, the threshold between retained value and cumulative depreciation intersect just before the fifth year of ownership, meaning the ES250 drops to half the price of what it was new. This is an excellent time for used car buyers, who are getting a half-priced deal, albeit with no manufacturer warranty on the vehicle.
However, the fact that they are buying a Lexus, a brand known for its sublime build quality, should calm some anxious nerves.
Inversely, current owners looking to sell their ES can do so just as their vehicle crosses the five-year mark. Simply because prices visibly start to stabilise in this period, and gives the seller a larger window to sell their cars for the best prices.
For some great deals on the Lexus ES, click here.
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Which make/ model would you like us to research next? Let us know in the comments.