Understanding Vehicle Resale Values
There are many things to consider when purchasing a new vehicle and one of them is understanding the importance of resale value. When you purchase a vehicle that has a high resale value, you are able to maximize the amount you get back when you eventually trade-in your vehicle.
What is Depreciation & Resale Value?
According to Kelly Blue Book, depreciation is how much value your car loses over time. Resale Value (also known as residual value) is the amount your car is expected to sell for at some point in the future. A useful rule of thumb to remember is that a vehicle with a good resale value retains at least 40-50% of its original retail price after 5 years.
For example, if you purchase vehicle A at $30,000 with a residual value of 55%, you can still get around $16,500 when you sell it in 5 years. Compare that to vehicle B which sells at a cheaper price of $20,000 but has a lower residual value of 30%. You are only able to get around $6,000 at the end of its life span. You end up losing more money by opting for the cheaper option.
Now you see the importance of looking at resale values when shopping for a vehicle. Which vehicles have the highest resale values? Below are the top vehicles with the best resale values.
Vehicles with the Best Resale Values
|VEHICLE||CATEGORY||RETAINED VALUE AFTER 5 YEARS|
|Toyota Tundra||Full-Size Pick-Up Truck||59%|
|Toyota Tacoma||Mid-Size Pick-Up Truck||55.8%|
|Toyota RAV4 Hybrid||Hybrid Vehicle||48.6%|
|Mercedes-Benz G-Class||Luxury Full-Size SUV||48%|
|Subaru Crosstrek||Subcompact SUV||45%|
|Subaru Impreza||Compact Car||43.1%|
|Porsche Macan||Luxury Compact SUV||42%|
|Subaru Outback||Mid-Size SUV||41.3%|
|Toyota Camry||Mid-Size Car||40.9%|
|Lexus IS||Entry Level Car||38.4%|
|Lexus LS||Luxury Car||33%|
The next time you shop for a new vehicle, consider the long-term and look at how much value your vehicle is really giving you.