You may think that insurance & maintenance are the biggest expenses to owning a vehicle, but depreciation is even greater. Predicting future resale values is largely an educated prediction based on economic factors and historical data. Use this guide to help you get a feel for the topic and determine what to look for when it’s time to shop.
As you know, the moment you drive a new vehicle off the lot, its value begins to decline by as much as 10%. And that depreciation continues, with most cars losing somewhere between 15% and 25% of their value each year for the first 5 years. (The rate of depreciation varies by model.)Choosing a luxury brand or driving fewer-than-average miles can slow a declining value. Others, such as trendy optional features, gas prices and current events, could cause your automobile to quickly drop in value regardless of its brand.
For today’s market it seems that bigger vehicles hold their value better. This year, the experts at Kelley Blue Book placed trucks & SUVs in 8 of the top 10 slots on their 2016 Best Resale Value Awards. Subaru, Honda, Toyota and Lexus are among the automakers who consistently top the lists of cars with higher value retention.2017 Vehicles to Reconsider
- Chevy’s Camaro will face higher depreciation due to a slated redesign and strong sales for the Ford Mustang.
- Other models anticipating aggressive depreciation: Nissan Leaf, Dodge Charger, VW Beetle & Kia Optima.
Include insurance costs in your research. Replacement/repair costs, engine displacement and safety ratings influence costs greatly. You may find that insurance premiums are so low on some vehicles that the savings will subsidize more car for the money. Narrow down your vehicle choices and we’ll give you free insurance quote prior to purchase.