- advertisement -
Bankrate's 2007 New Car Guide
Dollar$ & $en$e
Status and styling aside, many car-buying decisions boil down to bucks and budgets.
Dollar$ & $en$e
Top 10 new cars for future value


With 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
Lotus Elise
enlarge [+]
2007
Lotus Elise

53.86%*
Lotus Exige
enlarge [+]
2007
Lotus Exige

53.85%*
MINI Cooper
enlarge [+]
2007
MINI Cooper

52.71%*
Jeep Wrangler
enlarge [+]
2007
Jeep Wrangler

49.25%*
BMW M6
enlarge [+]
2007
BMW M6

48.11%*
 
Honda S2000
enlarge [+]
2007
Honda S2000

47.96%*
Scion xB
enlarge [+]
2008
Scion xB

47.64%*
Volkswagen Eos
enlarge [+]
2007
Volkswagen Eos

46.93%*
Toyota RAV4
enlarge [+]
2007
Toyota RAV4

46.92%*
Chevrolet Corvette
enlarge [+]
2007
Chevrolet Corvette

46.74%*
*Percentage of original value expected to be retained after five years. Source: Edmunds.com

While 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.

But there 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.

"That's 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."

Edmunds.com 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.

-- Posted: Aug. 2, 2007
 
Page | 1 | 2 | 3 |





 
 
 
 
 
 
 
 
- advertisement -
- advertisement -
CAR & MONEY NEWS
Free newsletters!
Sign up now. See sample.
- advertisement -