Which Cars Hold Their Value Worst?

The cars that lose the most value cover a wide spectrum of cost levels and categories. Some are luxury models, while others are entry level sedans. After I list the cars with the worst depreciation rates, I will throw in the biggest losers in the truck and SUV categories as well.

Average Car Depreciation

In order to see the staggering depreciation of some of these cars, you need to have an idea of average depreciation rates. Normally, new vehicles lose around 20% of their value in the first year, and then 10-15% in each following year. This leads to the following:

Vehicle Age Value Lost
1 Day 10-15%
1 Year 20-25%
2 Years 30-35%
3 Years 40-45%
4 Years 50%
5 years 60%

Of course, a car depreciating 60% in the first five years of ownership, meaning it’s worth just 40% of its new price, seems staggering in and of itself. But that’s just the average. The worst cars for depreciation lose signficantly more!

Biggest Losers:  Cars

  • Volvo S80…this luxury sedan loses an amazing 82 percent of its value in five years.
  • Lincoln MKS…pulling in a close second, the MKS will lose 78 percent of its value after five years.
  • Chrysler 200…the convertible of this model loses 77 percent of its value at the five year mark.
  • Chevrolet Impala…tired and worn out looking, the Impala loses 75 percent of its value after five years.

Biggest Losers:  Trucks and SUVs

The Nissan Titan is the biggest loser in the truck category. After five years it will lose 70 percent of its value. The Titan is still a sturdy truck to buy if you can be satisfied with a used one. If you are a little skittish of buying a five year old truck, consider a three year-old certified used model.

The SUV category has an amazing number of big losers; however, the Ford Expedition is more of a loser than any other vehicle in the class. It will have lost 70 percent of its value at the five mark. The Jeep Compass and GMC Yukon XL tie at 67 percent.

What We Can Learn from These Top “Depreciators”

These staggering rates of depreciation should make you think twice before buying a new car straight off the lot. As you can see, the biggest drops in value come right away. For this reason, a used car of around three years old may be a good option, as someone else has already had to “pay for” those painful first years of depreciation. Whether you pay cash or finance, loss of value costs you. With a car, it’s almost inescapable, as all cars save classics are depreciating assets. But it pays to minimize your depreciation costs as much as possible, and that means buying pre-owned.

Plug It In: The Deal America Is Missing Out On

A recent study shows that a whopping 95% of Americans are unfamiliar with any & all financial incentives associated with electric cars. Said study, conducted by two Indiana University researchers, surveyed more than 2,000 drivers in 21 of the nation’s largest cities. Nearly all respondents answered that they were unaware of the monetary incentives the government has in place for trading a gas guzzler in for an electric vehicle.

This is likely one of the bigger reasons why sales of electric cars have yet to take off in the United States. Only a tiny fraction of new vehicles sold in the US this year will be rechargeable. Some estimates display dismal numbers, predicting that of the 15.5 million vehicles sold in 2013, only 50,000 will be electric.

Consumers simply aren’t informed about the federal $7,500 tax credit available. The study also found that 3 out of 4 Americans were uninformed about the lower costs associated with both the fuel and maintenance of electric vehicles, as compared to their gasoline counterpoints.

Read the full article here:
http://www.detroitnews.com/article/20131117/AUTO01/311170009/1148/