If you buy a new vehicle and plan to own it for many years, resale value may not play a big part in your decision of what vehicle to buy. If you like to trade your car in every few years for a new one, then depreciation becomes an important factor that you need to consider.
When you drive a new car off the lot, it takes an immediate hit in value since it now qualifies as a used car. Beyond that, the depreciation rate varies by car make and model. Kelley Blue Book (KBB) has ranked vehicles according to their ability to hold value in its January/February 2011 Residual Value Guide. The results presented are based on resale values after three years and are summarized by type of vehicle and price range. (For more, check out Used Car Shopping: How To Avoid A Lemon.)
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Sedans under $20K - Scion xB 4-door hatch (57%)
The xB heads this category by maintaining 57% of its $16,720 sticker price. In addition to its utility and edgy look, it's relatively efficient with a mileage estimate of 22/28 MPG. It also boasts 22 cubic feet of cargo space and an annual average insurance cost of about $1,000.
Sedans $20-25K - Mini Cooper Clubman 2-door hatch (64%)
With a sticker price of $21,800, the Clubman is eight inches longer than the standard Mini. That makes the rear seat much more accommodating and beefs up the cargo capacity. It's a favorite of the younger generations and its maneuverability makes it a popular choice for those living in cities and congested areas. The resale value of 64% puts the Clubman near the top among all price ranges and models.
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Sedans $25-30K - Subaru Impreza WRX AWD 4-door (55%)
The turbocharger on this Impreza takes the sticker price up to $26,220, but it also bumps the resale value from 51% for the standard model up to 55%. Its sleek, racing look makes it another top choice for younger drivers. The 265 horses under the hood are produced by a four-cylinder engine that delivers decent mileage at an estimated 19/25 MPG. (For more, see 5 Ways To Save Money At The Pump.)
Sedans $30-45K - Audi A5 2.0T Quattro Premium AWD 2-door (67%)
Retaining two-thirds of its $37,375 sticker price, the A5 earns top honors among all vehicles in the KBB Residual Value Guide. Within this category of similarly priced sedans, the A5 beats the competition by eight or more points. It features the same turbocharged engine as the A4 that gets 21/31 MPG. It's a popular choice because of its sleeker, sporty look that is available in both a coupe and drop-top version.
Sports Cars - BMW M3 4-door (64%)
The sticker price of $57,575 is a bit more palatable when you consider that this 414 HP beauty retains an impressive 64% of its value. The four-liter engine produces 295 lb-ft of torque, with a mileage estimate of 14/20 MPG. Some purists might argue that the M3 really isn't a true sports car, but that's where KBB chose to rank it and it won by a wide margin.
Small Crossovers - Honda CR-V LX (62%)
With consistently high rankings for reliability, Honda's entry in this segment benefits from the company's long-standing reputation for quality. In addition to its 62% value retention, it also has the lowest average insurance cost in the category at $935 per year. Its four-cylinder engine delivers plenty of power and 21/28 MPG, and the inside has ample cargo space and legroom. At a sticker price of $22,475, it was ninth on the top sellers list with just over 200,000 sold in the U.S. (For more, check out Hybrids: Financial Friends Or Foes?)
Large and Midsize Crossovers - BMW X5 xDrive35d AWD (64%)
The diesel-powered X5 turbo tops this category at 64% resale value, and clocks zero to 60 in just seven seconds. The 265 HP six-cylinder engine delivers respectable mileage of 19/26 MPG. While the sticker price of $52,175 may deter some potential buyers, it will only lose about a third of that amount over three years.
Wagons - Subaru Outback 3.6R AWD (59%)
Subaru's all-wheel drive champ has a sticker price of $28,920, mileage estimate of 18/25 MPG, and also won the KBB Best in Class designation. In addition to its 59% resale value, it consistently gets high marks for passenger safety. It's a favorite among those who are looking for a rugged, versatile wagon that can go almost anywhere with enough room for five plus cargo.
Minivans - Honda Odyssey LX (54%)
The LX dominated the KBB minivan awards including Best New Car, Best in Class, and Most Fuel-efficient. It topped the resale rankings as well coming in at 54%. It also features high reliability and relatively low insurance rates at an average annual cost of $960.
The Bottom Line
It's clear that foreign cars hold their value better than American cars based on the KBB data. One of the primary reasons is that foreign cars typically score better in predicted reliability which tends to hold up values over time. While American manufacturers have made strides in closing the reliability gap, they haven't caught the competition yet.
Kelley Blue Book also calculates resale value over five years and it's available on the KBB website. Potential buyers and sellers should consult this information before making a purchase or sale. (To learn about investing in some of these car makers, check out Analyzing Auto Stocks.)