Choosing a new car by its resale value

KELLEY BLUE BOOK

You may think that maintenance and insurance are the larger costs of owning a vehicle, but depreciation is an even greater expense for many car owners.

Predicting future resale values is largely an educated guess based on various economic factors and historical data. Use this guide to help you get a feel for the topic and determine what to look for when it’s time to shop.

A Look at Depreciation
The moment you drive a new vehicle off the lot, its value begins to decline by as much as 10 percent. And that depreciation continues, with most cars losing somewhere between 15 and 25 percent of their value each year for the first five years. (The rate of depreciation varies by model.)

Some factors, like choosing a luxury brand or driving fewer-than-average miles, can slow a declining value. Others, such as trendy optional features, gas prices and current events, could cause your automobile to quickly drop in value regardless of its brand.

Cars With Higher Values
For the time being, it seems bigger depreciates better. This year, experts at Kelley Blue Book slotted trucks and SUVs in nine of the top 10 spots on their 2017 Best Resale Value Awards. Subaru, Honda, Toyota and Lexus are among the automakers that consistently top the lists of cars with higher value retention.

New Vehicles to Reconsider
The Chevrolet Camaro is one example of a vehicle experts predict will face higher depreciation due to a 2016 redesign and strong sales for the competing Ford Mustang. Some 2016 models that are expected to face resale issues include the Nissan Leaf, Dodge Charger, Volkswagen Beetle and Kia Optima.

Want to bring in more money come trade-in time? Do your research on cars and their resale values before making the investment.

Myrna de Vera is the owner of deVera Insurance Agency; Phone (415) 566-9400;
[email protected] ; 2121 19th Ave, Ste 102 San Francisco, CA 94116.