Top 10 new cars for future value
today's car loans extending five years or even longer, a vehicle's residual value
-- the retained value of the car as it grows older -- has become a more important
factor in a new car purchase.
"People are paying
more attention to it, and very rightly so," says Jack Nerad, executive editorial
director and market analyst at Kelley Blue Book, which produces an annual list
of the top 10 cars in terms of residual, or future, value.
|Top 10 residual value -- Edmunds.com|
|*Percentage of original
value expected to be retained after five years.||
most people are aware that a new car loses the biggest chunk of value as soon
as it leaves the dealer's lot, depreciation doesn't stop there. In fact, it's
the biggest cost of car ownership.
According to Kelley Blue
Book research, an average vehicle retains only 35 percent of its original value
after five years of ownership. So today's $20,000 new car will be worth in the
neighborhood of $7,000 five years in the future.
are significant variations. In addition to its top 10 list, Kelley Blue Book also
names top resale value brands. Honda and Acura tied for 2007. The average resale
value for the manufacturers' vehicles hit an industry high of just shy of 56 percent
of their original prices after five years of ownership.
a pretty big spread," Nerad says of the 20 percentage point difference between
average and high. "If you're not paying attention to resale value, it could
cost you thousands of dollars in terms of transportation costs."
industry analyst Jesse Toprak agrees.
"It used to be
consumers did not have a full understanding of what residual value is," he
says. Edmunds.com also produces a top 10 residual value list, and calculates that
the average vehicle holds 38.5 percent of its value after five years.