Depreciation is one of a new-car buyer’s largest long-term expenses, and savvy shoppers look for models that hold onto their value steadfastly to bring in more money at trade-in time. Resale value is especially important to those leasing a car, as monthly payments are largely based on what a vehicle will be worth two or three years down the road.
Predictions of future value for any depreciating asset, however, are essentially educated guesses, albeit ones based on assorted economic factors, historical data including used-vehicle auction values and supply and demand projections. Having already highlighted the rides that generate the highest rate of return in an earlier post, we move on to consider the other end of the spectrum, namely new cars that are expected to lose their values the quickest. This data is according to a study recently conducted by the used-vehicle website Carlypso.com, based on an analysis of over 46,000 wholesale transactions among pre-owned model-year 2015 vehicles.
In a classic “is the glass half empty of half full” situation, this list can be regarded as being either negative or positive, depending on one’s viewpoint. True, it’s a veritable “cars to avoid” compendium for value-conscious new car buyers and lessees, but none are exactly clunkers. That makes it a great list of potential models for late-model used-car bargain hunters to consider.
The car expected to lose its value the quickest is the full-electric Nissan Leaf, which Carlypso predicts will be worth only 52% of its original MSRP after just a year on the road. To be fair, like other EVs, those buying a new Leaf are eligible for a one-time $7,500 federal tax credit (on top of any state and/or local incentives that may apply) which immediately deflates the car’s resale value; it's further decimated by gas at $2.00 a gallon and ample supplies of pre-owned models available.
Perhaps this is no surprise, given the recent resurgence in the popularity of big pickups and SUVs, but the only truck to make the list of the auto industry’s biggest losers this year is the Chevrolet Express full-size van. We’re featuring the list of 2016 cars predicted to suffer the worst resale values after a year of ownership in the accompanying slideshow.
Generally, the more expensive the vehicle, the more important choosing a model with a lower rate of depreciation becomes, simply because there’s more money at stake. For example, a $30,000 car that drops 50 percent of its original worth loses $15,000 at trade-in time, while a vehicle priced at $100,000 with the same rate of depreciation will suffer a $50,000 hit in resale value. On the other hand, differences in resale values tend to narrow the longer one keeps a vehicle, and can become negligible among those who literally “run a car into the ground.”
