High Resale Values for Best Deals

best car deals and resale valueAs you may already know, all new automobiles depreciate in value over time. However, some brands and models depreciate at a slower rate than others and have higher future resale values. That makes them better deals in the long term.

In this article we’ll reveal the vehicles with the highest projected resale values.

Why is resale value important?

Whether you buy or lease your next new vehicle, high resale value means lower overall cost-of-ownership — which means the best deals in the long term.

Let’s look at why this is true.

Resale value in car leasing

Resale value has the most direct effect when you lease. In leasing, projected future resale value is called residual value. Your monthly payment is determined by the difference between vehicle lease price (the “selling” price you and the dealer agree on) and residual value. The smaller the difference, the lower your payment, and the lower your overall cost. Obviously, you want a high residual value for the best lease deals and lowest monthly payments.

This means selecting the right car brand and model — the ones with the highest residual values — for the best lease vehicles. The Lease Kit at LeaseGuide.com provides a list of all vehicle makes and models and rates them according to high, low, and average residual values.

Residual values, as well as resale values, are typically expressed as a percentage of MSRP (Manufacturer’s Suggested Retail Value) over a specific time period. For example, a good residual would be 64% (of MSRP) after 36 months. A poor residual would be 34% after 36 months, for example.

Resale value in car buying

When you buy a vehicle, resale value becomes important when you trade or sell your vehicle. High resale values lower your overall cost. If you sell or trade before your loan is paid off, a car with a high resale value lowers your effective loan rate. It also lowers the effective cost of buying or leasing your next car because a high resale value helps offset your next car’s cost.

If we consider an example of a $30,000 car that has 60% resale value after 3 years and another with only 40% value after 3 years, the difference is $6000 in resale value. This is a significant difference when it comes time to sell or trade.

Which vehicles have the highest resale values?

Kelley Blue Book conducts an annual study in which they project resale values for most car brands and models. This year’s results have just been announced. Let’s look at some of the results.

The top brand, overall, was Toyota.

The top 10 vehicles with highest projected resale values are:

  1. Jeep Wrangler
  2. Toyota FJ Cruiser 
  3. Toyota Tacoma
  4. Hyundai Tucson
  5. Audi Q7
  6. Infiniti FX
  7. Honda CR-V
  8. Lexus RX
  9. Nissan Frontier
  10. Chevrolet Camaro

Vehicles were also rated in their particular categories.  For example, the higest rated Subcompact was the Honda Fit. The best Compact was the Honda Civic. Best Mid-Size was Toyota Camry. And the highest rated Full-Size was the Nissan Maxima. See Kelley Blue Book for winners in other categories.

Summary

As you can see, American brands in general did not rate as highly as Japanese brands that have build a reputation for quality and reliability — characteristics that contribute heavily to future resale value. If you plan to lease, or if you know that you will trade or sell within 2-5 years of a purchase, you’ll save money by considering vehicles that have high resale values.

###

If you enjoyed this post, please consider to leave a comment or subscribe to the feed and get future articles delivered to your feed reader.

Comments

No comments yet.

Sorry, the comment form is closed at this time.