New Toyota Highlander, 2020 vs. 2021

[CurlyDave]

DW is coming up on a birthday, and she has told me her present is going to be a new Toyota Highlander.

She has had only Highlanders since 2004 and they have been excellent vehicles, so there is no use in even suggesting a different brand, or even a different type of Toyota -- it is going to be a Highlander.

So the only question is 2020 or 2021. One of the discriminators is the Driver Assist is improving in the 2021s, going from version 2.0 to version 2.5. Does anyone who knows about these things have a suggestion on the relative value of the 2.5 upgrade?

The little bit of research I have done seems to suggest the major improvement is better pedestrian detection and avoidance. We live in a pretty rural area and if the car could detect and avoid deer I would get a 2021 in a heartbeat -- I know a lot of neighbors who have hit deer. Very, very few pedestrians out here. More horses, cows and farm equipment.

Are there any other discriminators on the 2021s vs. the 2020s we should know about? We are willing to wait if the 2021 has any significant benefits, otherwise we can save a bit on a 2020. We will drive it for about 100k miles.

[bloom2708]

If price is no object, buy the 2021.

I would guess $5k+ difference if the 2020 have a small discount. I would expect the 2021 to have no discount.

The 2020 has a 1/2 year or more of depreciation built in as well. It could be up to 1 year old when the 2021 are out.

[DJZ]

DW is coming up on a birthday, and she has told me her present is going to be a new Toyota Highlander.

She has had only Highlanders since 2004 and they have been excellent vehicles, so there is no use in even suggesting a different brand, or even a different type of Toyota -- it is going to be a Highlander.

So the only question is 2020 or 2021. One of the discriminators is the Driver Assist is improving in the 2021s, going from version 2.0 to version 2.5. Does anyone who knows about these things have a suggestion on the relative value of the 2.5 upgrade?

The little bit of research I have done seems to suggest the major improvement is better pedestrian detection and avoidance. We live in a pretty rural area and if the car could detect and avoid deer I would get a 2021 in a heartbeat -- I know a lot of neighbors who have hit deer. Very, very few pedestrians out here. More horses, cows and farm equipment.

Are there any other discriminators on the 2021s vs. the 2020s we should know about? We are willing to wait if the 2021 has any significant benefits, otherwise we can save a bit on a 2020. We will drive it for about 100k miles.

As you are probably aware, the Highlander had a major redesign in 2020, so the likelihood of major changes in the 2021 model is low.

[tdmp]

So the only question is 2020 or 2021. One of the discriminators is the Driver Assist is improving in the 2021s, going from version 2.0 to version 2.5. Does anyone who knows about these things have a suggestion on the relative value of the 2.5 upgrade?

I don't know how good the 2020 Driver assist is. If the Driver Assist has improved and can autosteer/lane centering similar to Tesla's Basic Autopilot or Comma AI's OpenPilot, my vote is to get the 2021.

[Sandtrap]

DW and I are waiting for the next body style change, including the front end.

j

[cusetownusa]

I don't know the difference between the 2.0 and 2.5 driver assist...however, keep us updated on what you decide as my wife is also looking at a highlander as she wants a 3 row vehicle.

[jabberwockOG]

Driver assistance / accident avoidance software and sensor hardware on cars are significantly improving each model year, and will continue to do so for the next 10 years or so before beginning to plateau. Current autonomous and accident avoidance capabilities are a pretty primitive feature set in the real world (putting aside the BS blue sky marketing hype) relative to where AI/autonomous SW in cars is going to be in 15 years or so. The situation is similar in some respects to year to year personal computers improvements in the 1990's decade. As a result I think it is currently worth getting the latest model year if you have the budget to do so.

[econprof]

Why would you buy a new car, which depreciates 1/3 when driven off the lot, as opposed to a low-mileage preowned?

[PharmerBrown]

Why would you buy a new car, which depreciates 1/3 when driven off the lot, as opposed to a low-mileage preowned?

Because the premium, which is not 50%, is worth the peace of mind to some people.

[Glockenspiel]

Why would you buy a new car, which depreciates 1/3 when driven off the lot, as opposed to a low-mileage preowned?

Any Toyota owner here knows that your statement is false. Oftentimes a 1-2 year old Toyota is only $2,000 less than a brand new one.

[DownToThis]

Why would you buy a new car, which depreciates 1/3 when driven off the lot, as opposed to a low-mileage preowned?

Any Toyota owner here knows that your statement is false. Oftentimes a 1-2 year old Toyota is only $2,000 less than a brand new one.

I was fascinated to see this as well when I was shopping for a used Toyota/Honda. Not much depreciation. Ended up getting a 3 year old highlander anyways. It now has 160k miles on it and is 10 years old. Keep thinking i am going to upgrade (the new tellurides/palisades look nice) but the highlander keeps on going!

[sergio]

Any price difference?

[redpony]

We have a 2005 Highlander with 220k miles that refuses to die - it has never had any kind of issues.

We have started looking at the 2020 and didn't know about driver assist improvements in the 2021. May have to look into that.

I also think that since the 2020 was a brand new redesign, Toyota might have got feedback on issues with it that might be corrected on the 2021.

The only issue with the 2021 is that it will likely be Jan-Feb 2021 before it becomes available at local dealers and I don't think I am prepared to wait till then.

[Normchad]

Why would you buy a new car, which depreciates 1/3 when driven off the lot, as opposed to a low-mileage preowned?

I’d buy a new Toyota. I don’t mind the depreciation. I’ve got to spend my money on something, it won’t do me any good to die with an extra $5K or whatever.

Why does anybody ever buy anything?

[adamthesmythe]

Why would you buy a new car, which depreciates 1/3 when driven off the lot, as opposed to a low-mileage preowned?

By this reasoning I would only shop at the Goodwill, because clothing depreciates even more than 33%.

[sambb]

the interior of the 2020 highlander is on par with high end cars >100k plus, esp with the 12 inch screen.
Really super nice in the highest trim levels. very comfortable. Then again, its not a cayenne.

[cusetownusa]

Why would you buy a new car, which depreciates 1/3 when driven off the lot, as opposed to a low-mileage preowned?

Do you have any links that show a toyota highlander will depreciate 1/3 as soon as it drives off the lot?

[dkdoy]

We drove a 2002 highlander for ten years and eventually sold it for nearly 2/3’s of of the original purchase price. It was replaced with a 2012 that we still currently own. The plan will be to buy another in the next couple of years, however, we will keep the 2012 as an extra vehicle for our teenage driver.

[cusetownusa]

We drove a 2002 highlander for ten years and eventually sold it for nearly 2/3’s of of the original purchase price. It was replaced with a 2012 that we still currently own. The plan will be to buy another in the next couple of years, however, we will keep the 2012 as an extra vehicle for our teenage driver.

How is that possible? I was told that the car would depreciate 1/3 the moment it was driven off the lot. Unless it dropped by 1/3 and then was flat for the next 10 years.

[Helo80]

Why would you buy a new car, which depreciates 1/3 when driven off the lot, as opposed to a low-mileage preowned?

Because I'm not poor.

[adamthesmythe]

We drove a 2002 highlander for ten years and eventually sold it for nearly 2/3’s of of the original purchase price. It was replaced with a 2012 that we still currently own. The plan will be to buy another in the next couple of years, however, we will keep the 2012 as an extra vehicle for our teenage driver.

How is that possible? I was told that the car would depreciate 1/3 the moment it was driven off the lot. Unless it dropped by 1/3 and then was flat for the next 10 years.

Well, conventional wisdom says exactly that, so that 2002 did depreciate by 33% when driving off the lot.

And upon buying a new car, bogleheads are required to go immediately to the computer and update their spreadsheet to reflect the sudden loss in wealth.

[sambb]

Why would you buy a new car, which depreciates 1/3 when driven off the lot, as opposed to a low-mileage preowned?

Because I'm not poor.

Seems like a reasonable approach - spend what you want

[dkdoy]

We drove a 2002 highlander for ten years and eventually sold it for nearly 2/3’s of of the original purchase price. It was replaced with a 2012 that we still currently own. The plan will be to buy another in the next couple of years, however, we will keep the 2012 as an extra vehicle for our teenage driver.

How is that possible? I was told that the car would depreciate 1/3 the moment it was driven off the lot. Unless it dropped by 1/3 and then was flat for the next 10 years.

We paid 31k for a new Ltd highlander in 2002 and sold private party for 18k in 2012. Also, it sold the same morning the add was place on craiglist. Really can’t explain it, no complaints on the value of owning it for 10 years.

[cusetownusa]

We drove a 2002 highlander for ten years and eventually sold it for nearly 2/3’s of of the original purchase price. It was replaced with a 2012 that we still currently own. The plan will be to buy another in the next couple of years, however, we will keep the 2012 as an extra vehicle for our teenage driver.

How is that possible? I was told that the car would depreciate 1/3 the moment it was driven off the lot. Unless it dropped by 1/3 and then was flat for the next 10 years.

We paid 31k for a new Ltd highlander in 2002 and sold private party for 18k in 2012. Also, it sold the same morning the add was place on craiglist. Really can’t explain it, no complaints on the value of owning it for 10 years.

Sorry, I was just being sarcastic as an earlier post said the car would lose 1/3 of its value as soon as you drive off the lot. Toyota’s tends to hold there value very well making buying new vs used close to a wash if you are keeping the vehicle until it’s 10+ years old or so.

[bayview]

...And upon buying a new car, bogleheads are required to go immediately to the computer and update their spreadsheet to reflect the sudden loss in wealth.

Egg-zackly!

[pinhead]

We drove a 2002 highlander for ten years and eventually sold it for nearly 2/3’s of of the original purchase price. It was replaced with a 2012 that we still currently own. The plan will be to buy another in the next couple of years, however, we will keep the 2012 as an extra vehicle for our teenage driver.

How is that possible? I was told that the car would depreciate 1/3 the moment it was driven off the lot. Unless it dropped by 1/3 and then was flat for the next 10 years.

We paid 31k for a new Ltd highlander in 2002 and sold private party for 18k in 2012. Also, it sold the same morning the add was place on craiglist. Really can’t explain it, no complaints on the value of owning it for 10 years.

$18K for a 10 year old Highlander? Wow. I cant even sell my 8 year Lexus RX 350 for $16k.
You did good.

[lazydavid]

Do you have any links that show a toyota highlander will depreciate 1/3 as soon as it drives off the lot?

My local Toyota dealer lists new Highlander XLEs at $41,569, and a used 2020 XLE for $39,989, so the "1/3 depreciation on day 1" is off by almost exactly one order of magnitude. You would think an Econ professor could do better. Zero chance I'd buy used for a 3.8% discount.

[Housedoc]

Why would you buy a new car, which depreciates 1/3 when driven off the lot, as opposed to a low-mileage preowned?

Because I'm not poor.

I absolutely love this answer. Have not chuckled this much in days. Thanks

[Normchad]

Why would you buy a new car, which depreciates 1/3 when driven off the lot, as opposed to a low-mileage preowned?

Because I'm not poor.

I absolutely love this answer. Have not chuckled this much in days. Thanks

A lot of life’s dilemmas are easier to figure out when you’re not poor.

Rule 1: Be rich
Rule 2: Don’t be poor

[Helo80]

Why would you buy a new car, which depreciates 1/3 when driven off the lot, as opposed to a low-mileage preowned?

Because I'm not poor.

I absolutely love this answer. Have not chuckled this much in days. Thanks

My pleasure....

[Helo80]

Why would you buy a new car, which depreciates 1/3 when driven off the lot, as opposed to a low-mileage preowned?

Because I'm not poor.

I absolutely love this answer. Have not chuckled this much in days. Thanks

A lot of life’s dilemmas are easier to figure out when you’re not poor.

Rule 1: Be rich
Rule 2: Don’t be poor

The ridiculousness of my comment was merely a reflection in the mirror of the ridiculousness of the Economics Prof who asked that question.

[vineviz]

Do you have any links that show a toyota highlander will depreciate 1/3 as soon as it drives off the lot?

My local Toyota dealer lists new Highlander XLEs at $41,569, and a used 2020 XLE for $39,989, so the "1/3 depreciation on day 1" is off by almost exactly one order of magnitude. You would think an Econ professor could do better. Zero chance I'd buy used for a 3.8% discount.

If you buy a new XLE for $42k, dealer won’t PAY you $40k when they buy it back.

The 33% depreciation mentioned earlier is an exaggeration: 15% would be mort accurate for a desirable Toyota or Honda.

[Helo80]

Do you have any links that show a toyota highlander will depreciate 1/3 as soon as it drives off the lot?

My local Toyota dealer lists new Highlander XLEs at $41,569, and a used 2020 XLE for $39,989, so the "1/3 depreciation on day 1" is off by almost exactly one order of magnitude. You would think an Econ professor could do better. Zero chance I'd buy used for a 3.8% discount.

If you buy a new XLE for $42k, dealer won’t PAY you $40k when they buy it back.

The 33% depreciation mentioned earlier is an exaggeration: 15% would be mort accurate for a desirable Toyota or Honda.

You''re talking wholesale.
lazydavid is referring to retail.

(edit: BTW - I know that you know the difference between wholesale/retail, but most BHs and consumers are not sitting auto auctions buying at wholesale prices. That kind of changes the buying prospect if we could all get used, late model cars at wholesale prices)

People often overstate in their minds how much savings a used vehicle will be over new. I always recommend people looking at cars in the 1 or 2 year range to just shop out the equivalent new model. (breaks down more when a new generation or major refresh took place).

With a German luxury car, lazydavid's example would likely be more extreme and might be worth considering going the used route. On Toyonda's that BHs love... I generally have not seen massive enough savings on off-lease cars that I'd be comfortable with going used. If we were talking about a difference deep into the 4 or early 5 digit difference, I might raise my eyebrow.

[Helo80]

Do you have any links that show a toyota highlander will depreciate 1/3 as soon as it drives off the lot?

My local Toyota dealer lists new Highlander XLEs at $41,569, and a used 2020 XLE for $39,989, so the "1/3 depreciation on day 1" is off by almost exactly one order of magnitude. You would think an Econ professor could do better. Zero chance I'd buy used for a 3.8% discount.

You'd be surprised at how many people are utterly convinced used is going to save them tons of money. Then, they go to the dealership and only want to see used cars.... not even entertaining new..... because new is only what stupid people buy who don't understand depreciation.

Depending on how the XLE is optioned, I would not be surprised if you could get a local dealer, within a 100 mile radius, to give you that 2020 used XLE, new for $39989.

[Helo80]

Are there any other discriminators on the 2021s vs. the 2020s we should know about? We are willing to wait if the 2021 has any significant benefits, otherwise we can save a bit on a 2020. We will drive it for about 100k miles.

Toyota already did a re-design and new platform for the MY20 Highlander. So, MY21 Highlander is going to be minimal changes like you've noticed. TSS 2.0 to TSS 2.5 is what I've heard as well. That being said, I don't think any car is going to be able to do much if a deer (or pedestrian) leaps in front of you. I think that you have a valid concern wrt deer collisions.

As MY21 goes into production, you may get a slightly better deal on a MY20 only because my guess is that the factory will have better incentives on MY20's to help dealers move them off their lots. I don't know if invoice/MSRPs are changing from MY20 to MY21.

[lazydavid]

With a German luxury car, lazydavid's example would likely be more extreme and might be worth considering going the used route. .

Humorously enough, I’ve seen it both ways. When I bought my 2000 E46, a significantly less well-equippped (no premium package, no leather, steel wheels instead of alloys, tape instead of CD since that was a thing then) 1999 with 22k miles was only $2k cheaper, so of course I bought the new one.

But when I bought my 2011 E90 about 4 months after the release of the (history would judge inferior) 2012 F30, I paid $38.5k for a never-titled demo with 9k miles that stickered just shy of $55k.

[CurlyDave]

...You'd be surprised at how many people are utterly convinced used is going to save them tons of money. Then, they go to the dealership and only want to see used cars.... not even entertaining new..... because new is only what stupid people buy who don't understand depreciation.

Depending on how the XLE is optioned, I would not be surprised if you could get a local dealer, within a 100 mile radius, to give you that 2020 used XLE, new for $39989.

It is even worse than you think. You are talking about paying cash.

If a buyer is considering a car loan, the new car will frequently have a lower interest rate and therefore a lower payment than the used car. So the used car costs more than the new one.

I have tried to point this out to numerous people over the years and am met with widespread disbelief. No one will even take the effort to walk over to the new car side of the dealership and ask. Sometimes you can't fix stupid.

[srt7]

I would get the 2021.

[cenvin]

Biggest change for 2021 will be the introduction of the XSE trim level which includes a unique front fascia.
https://www.motortrend.com/news/2021-to ... ok-review/

[vineviz]

Do you have any links that show a toyota highlander will depreciate 1/3 as soon as it drives off the lot?

My local Toyota dealer lists new Highlander XLEs at $41,569, and a used 2020 XLE for $39,989, so the "1/3 depreciation on day 1" is off by almost exactly one order of magnitude. You would think an Econ professor could do better. Zero chance I'd buy used for a 3.8% discount.

If you buy a new XLE for $42k, dealer won’t PAY you $40k when they buy it back.

The 33% depreciation mentioned earlier is an exaggeration: 15% would be mort accurate for a desirable Toyota or Honda.

You''re talking wholesale.
lazydavid is referring to retail.

lazydavid was referring to "depreciation", which is the drop in value of an asset over time. For a car buyer, the initial depreciation is the decrease in value from the purchase price to the price that could be obtained by selling it.

Both prices are retail prices, but the price for which a dealer is SELLING a used car isn't the same as the price that will be used if the dealer is PURCHASING the car. Point being, $39,989 isn't the value of a used Highlander XLE in the context of asset values (i.e. depreciation). It's likely $3k to $5k below that.

[dknightd]

I'd probably buy the 2021 if it was available on your wife's birthday.
I do not know if the driver assist is much better or not. Probably is better. Also somebody stated above 2020 was the first year of a major redesign. I like to avoid first year redesigns if possible. That gives them a year to work out any obvious bugs.

[Ykcor]

Hybrid vs. gasoline only engine? Will one every recoup the extra cost of the hybrid?

[pointyhairedboss]

This site has depreciation curve for Toyota Highlander.

https://caredge.com/toyota/highlander/depreciation

The 2019 Toyota Highlander lost 20% of its value in 2020.

[bloom2708]

Hybrid vs. gasoline only engine? Will one every recoup the extra cost of the hybrid?

Probably not, but I don't think you recoup much of any cost with cars. They all depreciate very fast.

The hybrids and plug in hybrids are fun to drive. They are quiet, the hybrid system kicks in when it should.

More of a driving decision, like buying a house vs renting. Going all electric is another driving/lifestyle decision.

[dsmclone]

Do you have any links that show a toyota highlander will depreciate 1/3 as soon as it drives off the lot?

My local Toyota dealer lists new Highlander XLEs at $41,569, and a used 2020 XLE for $39,989, so the "1/3 depreciation on day 1" is off by almost exactly one order of magnitude. You would think an Econ professor could do better. Zero chance I'd buy used for a 3.8% discount.

I don't know if you understand this or not but what the dealer has priced on a used car is not the price they give you when you sell or trade in.

[vineviz]

Do you have any links that show a toyota highlander will depreciate 1/3 as soon as it drives off the lot?

My local Toyota dealer lists new Highlander XLEs at $41,569, and a used 2020 XLE for $39,989, so the "1/3 depreciation on day 1" is off by almost exactly one order of magnitude. You would think an Econ professor could do better. Zero chance I'd buy used for a 3.8% discount.

You'd be surprised at how many people are utterly convinced used is going to save them tons of money. Then, they go to the dealership and only want to see used cars.... not even entertaining new..... because new is only what stupid people buy who don't understand depreciation.

Depending on how the XLE is optioned, I would not be surprised if you could get a local dealer, within a 100 mile radius, to give you that 2020 used XLE, new for $39989.

[vineviz]

You'd be surprised at how many people are utterly convinced used is going to save them tons of money. Then, they go to the dealership and only want to see used cars.... not even entertaining new..... because new is only what stupid people buy who don't understand depreciation.

I think it should be mentioned that the "value" of shopping used depends a lot on the make and model. A 1-year old used Toyota RAV4 is an entirely different beast than a 1-year old Kia Sorrento, for example.

A 5- or 6-year old Honda Odyssey is less than half the cost of a new one, a difference that could amount to $20,000 which is a lot of money for many young families.

[lazydavid]

Do you have any links that show a toyota highlander will depreciate 1/3 as soon as it drives off the lot?

My local Toyota dealer lists new Highlander XLEs at $41,569, and a used 2020 XLE for $39,989, so the "1/3 depreciation on day 1" is off by almost exactly one order of magnitude. You would think an Econ professor could do better. Zero chance I'd buy used for a 3.8% discount.

I don't know if you understand this or not but what the dealer has priced on a used car is not the price they give you when you sell or trade in.

To reflect your condescension, I don't know if you know this, but that's not depreciation, that's a different type of sale.

What you are describing is much closer to a fee for service. When you trade a vehicle in instead of selling yourself, you get a few things in exchange for a lower price: Most notable among these are that you do not have to put in the effort, energy, and expense of marketing and selling it yourself, and in many states you will eliminate sales tax on the purchased vehicle, based on the value of the trade. Both of those things have value, and one can decide for themselves whether the value provided adequately compensates for the lower trade-in price.

If this was actually depreciation, two things would have to be true that are not:
1. The used 2020 purchased for $39,989 would ALSO depreciate by about $3,500 the moment you drive it off the lot (trade-in value for a 2020 XLE with 2200 miles is $36,191), for no reason whatsoever.
2. When you traded either vehicle back in, they would instantly appreciate by $3,500, for no reason other than a dealer taking possession of it.

Depreciating assets don't work that way. They have an intrinsic value at any given time, but transaction types can adjust the actual sales price up or down depending on the type of sale.

To take this into another arena, if the bank short sells or forecloses on your home, it will sell for a significantly lower price than if you marketed it and sold it yourself (or with the help of a realtor). That doesn't mean your home has lost value. Nor has it actually gained value when the flipper who purchases it turns around and sells it the next week for tens of thousands more.

But to take this all the way back to the original claim, if this was indeed depreciation, and the new car depreciated by 1/3 when you drove it off the lot, the 2020 Highlander XLE that you bought for $41,569 would only be worth $27,435 on trade. That claim is ridiculous on its face.

[Helo80]

Both prices are retail prices, but the price for which a dealer is SELLING a used car isn't the same as the price that will be used if the dealer is PURCHASING the car. Point being, $39,989 isn't the value of a used Highlander XLE in the context of asset values (i.e. depreciation). It's likely $3k to $5k below that.

I gotcha --- but they'll probably sell it for pretty darn close to 39989 as new cars are in a thin supply and demand is high. In-person auctions are still not running AFAIK. The market is a complete (cuss-word)-show right now after the factories closed for COVID and people stayed home for so long. Then, you got idiots that think the used 2020 Highlander is a "deal" because some other person was the sucker that took the hit on the depreciation.

It's a win-win for the dealership in my book.

[Helo80]

...You'd be surprised at how many people are utterly convinced used is going to save them tons of money. Then, they go to the dealership and only want to see used cars.... not even entertaining new..... because new is only what stupid people buy who don't understand depreciation.

Depending on how the XLE is optioned, I would not be surprised if you could get a local dealer, within a 100 mile radius, to give you that 2020 used XLE, new for $39989.

It is even worse than you think. You are talking about paying cash.

Oh yes --- and several BHs are stuck in '80's mentality that paying "cash" is going to cause the dealership to beg for their business and sell them the car for absolute rock-bottom pricing. It does not work that way, but you can't fix this mentality. Car shoppers can be their own worst enemy.