Here's either a short list of new cars to avoid, or the best deals in cheap used cars, depending on your point of view.
In the automotive business, as in life, there are winners and losers. In a previous post, we detailed the new cars and trucks that are predicted to hold onto their resale values the most tenaciously for 2018; here we feature 10 models that are the vehicular equivalent of throwing dollar bills into a roaring fire, based on five-year cost of ownership data compiled by Kelley Blue Book.
Though the average new vehicle can be expected to retain 35.1% of its original value after five years, the 10 models having the worst resale values we could find, lose between 73% and 78% of their sticker prices over the same period. The average $30,000 vehicle is worth just $10,500 after five years on the road, while one that’s worth just 22% will bring back only $6,600 at trade in time. Residual values are essential to those who lease a new car or truck, since monthly payments are largely based on the difference between a vehicle’s transaction price and what it will be worth at the end of the term.
But keep in mind that vehicles with dismal residual values aren’t necessarily bad cars. Resale value estimates are based on future supply and demand predictions that are often vary by region, along with a long list of considered variables including make and model market perception and whether a vehicle requires costly rebates and other incentives to attract buyers. Given the current market shift away from autos and into trucks and SUVs of all stripes, it should come as no surprise that nine of the 10 biggest losers for 2018 in terms of retained value we’re featuring in the accompanying slideshow are passenger cars, with most being costly luxury models.
On the plus side, one could consider this an indication of what will become the best bargains in used cars. One of the worst performers on our list is expected to lose an average of over $67,000 over five years, and that’s for the base model. Here, the first owner’s loss would be a used-car buyer’s gain.