Fighting Auto Depreciation: Buy a New Car That Holds its Value

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Megan Foukes is a recent graduate from Indiana University who graduated with a bachelor’s in journalism. Megan works as a content writer for Auto Credit Express and contributes to several automotive and finance blogs.


, - July 25, 2018

With sedans and smaller cars becoming less popular, many buyers are looking at larger family-sized vehicles to fit their everyday needs. One of the biggest concerns consumers have when buying these new vehicles is their ability to retain their value over time. Once you drive a new car off a dealer’s lot, the vehicle starts to lose its value. So, in the age of rising gas prices and bigger cars becoming more popular, which of these vehicles are able to retain their value over time and depreciate the least?

New Car Depreciation: Why it’s Worth Thinking About

Buying a new vehicle is exciting. You’re ready for the latest and greatest technology, that new car smell, and a clean slate. But what some buyers may not consider is the vehicle’s resale value and the effects of depreciation over time – especially if you plan on trading in the car in a few years.

Depreciation kicks in immediately. Once you drive off the lot, you can expect your vehicle to lose about 11 percent of its value. After a year, your car can lose anywhere from 15 to 25 percent of its original value. But depreciation generally begins to slow after the first year and you won’t see as big a drop in value over time. After five years of ownership, a car loses about 60 percent of its value. So, it’s important you understand how depreciation affects a vehicle’s value, and choose accordingly.

Why else is depreciation important? Cars with slower depreciation rates have the tendency to not be underwater for a longer period of time. When you’re underwater, it means the car is worth less than the loan amount, and if you want to trade in or sell your car, it’s crucial you’re not underwater.

Which Cars Depreciate the Least?

According to iSeeCars.com, these are the best new cars to buy that retain a good chunk of their value over the first year of ownership:

  1. Jeep Wrangler Unlimited - SUV
  2. Toyota Tacoma - truck
  3. Toyota 4Runner - SUV
  4. Nissan Frontier - truck
  5. Honda Pilot - SUV
  6. Chevrolet Colorado - truck
  7. Honda HR-V - SUV
  8. Jeep Renegade - SUV
  9. Subaru WRX - sedan

What about the Cars that Depreciate the Quickest?

As for the cars that depreciate the quickest, iSeeCars.com determined you should consider buying these eight vehicles used instead of new for the best value:

  1. Cadillac XTS - sedan
  2. Jeep Compass - SUV
  3. Mercedes-Benz E-Class - sedan
  4. Lincoln MKZ - sedan
  5. Cadillac CTS - sedan
  6. INFINITI Q50 - sedan
  7. Toyota Camry - sedan
  8. Kia Sedona – minivan

Based on iSeeCars research, SUVs and trucks retain more of their value over time, while sedans drop in value the most. While you should pick a car that works for you and your needs, depreciation is a factor that you might consider to give you an advantage later on.

Getting the Car You Need

Whether you’re ready to finance a new car, or need help finding a dealer to work with, CarsDirect wants to help. We work with a nationwide network of dealerships that have the lending resources to help car buyers get the financing they need. Get started today by filling out our auto loan request form. Our service is free of cost and obligation, so you can get started with confidence right now.

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Megan Foukes is a recent graduate from Indiana University who graduated with a bachelor’s in journalism. Megan works as a content writer for Auto Credit Express and contributes to several automotive and finance blogs.


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