Depreciation, A Warning for Car Buyers
We all know it happens; cars depreciate as soon as we drive them. Buying a new car inevitably causes us to wonder what the value the car will hold if we decide to trade it in after a few years for another new model. The old truth/joke that a car loses thousands of dollars of value as soon as you take it off the lot is unfortunately true and doesn’t give us any rest. In fact, a car driven an average number of miles each year will lose nearly seventeen percent in the first year alone. That number is alarming, especially for someone who is planning to trade in their car for a new one after only a few years of ownership.
If you are in the group the likes to have a new car every three to four years, this list will give you some cars you might want to avoid due to the speed of their depreciation. On the other hand, if you are looking for a good used car, one of these models might make a good choice as a certified pre-owned model that has been fully checked out and is offered at a reasonable price.
The XK is a gorgeous luxury ride that is long, low and slender and has great lines and an amazing driving feeling. Owning the XK gives you the feeling of high class driving in a style that may not have been within reach for you previously and suggests you have finally reached the scale of success you desire. Unfortunately the XK loses 29.2% of its value in the first year which translates to $28,100, making it a great car to hang on to for the long run, but not one you would be looking to trade in or sell.
The MINI Cooper has become one of the most popular European cars on the US market. Its size and style suggest lots of fun is a small package and the Cooper has done a masterful job of delivering on that notion since it showed up here. As a car that drives well and offers a load of great features it’s another one of those you would be better off hanging onto than selling as it loses 29.3% of its value in the first year alone, translating to $9,000 worth of car.
You might think a Lincoln would hold its value well, but unfortunately the MKS does not. The good thing is it’s a Lincoln and built to be a phenomenal ride for a long time, giving you some of the best driving with luxury features and a gorgeous high-end style that can be enjoyed for years. If you know you will want to trade or sell this car when you buy it, be forewarned it’s known to lose as much as 30.4% of its value which shows up as $14,600.
Who doesn’t love a Mercedes? This car is amazing, brings in a driving experience that allows you to head out on an open road and feel as if you are driving on air and still challenge the steering and suspension systems as you take curves at speed and take advantage of the awesome power underneath the hood. Hang onto it if you have one though as the S-Class depreciates 32.4% or $37,600 in the first year alone.
Safety is certainly nothing to laugh at or take lightly and with the S80 offering the most advancement from Volvo you might not mind as much how this car depreciates. The S80 is one of the upper level sedans from Volvo and gives you a great family vehicle that can be an awesome daily driver or the perfect ride for weekend enjoyment. As for the numbers, the S80 drops 32.6% in the first year which shows up as a $15,700 decrease in value.
Another one of the vehicles that is often purchased to be owned for the long haul is the Yukon XL. The versatility and capability of this vehicle is great for any family or workforce to make use of in order to have a great time or get the job done. The Yukon does lose 32.8% of its value in the first year which shows up as a large $21,100 making this a vehicle you want to keep and not trade or sell.
The Impala is an upgraded large sedan offering from Chevrolet that gives you a near luxury value and features that all can enjoy including the 4G Wi-Fi through the OnStar system. Even though the Impala gives you features and power to take advantage of, the value drops a massive 33.5% which becomes $10,800 over the first year alone. Driving this car makes more sense for someone who plans to own it for the long haul rather than giving it a new home after only a couple of years.
The CTS is one of the most engaging drives from Cadillac and carries the weight of the new style for the brand as it works to offer the features and driving experience needed to impress the younger generations. Cadillac models are owned longer than many other models which are certainly a good thing since the CTS lose 36.9% of its value or $20,100 over the first year.
The ForTwo makes perfect sense on this particular list. The ForTwo is built for a niche market of those who want a car that is small and gives great fuel efficiency as well as being able to park anywhere. As a favorite of the city dwellers, the ForTwo is fun to drive, but doesn’t have much space inside of it making it only attractive to a small crowd. The value loss for this car is 36.9% or $6,900 in the first year making it lose the same percentage of value as the CTS and a car that you certainly need to be sure you will want to own for a long time before buying.
The Genesis is considered to be the only luxury model from Hyundai and offers the largest depreciation on this list. One reason may be the newness of the model and the lack of trust as a luxury player. With the continued improvements Hyundai is making and more of their models holding their value, the Genesis may eventually change course and hold value much better, but currently the Genesis loses 38.2% of its value showing up at $16,600 worth of value in the first year alone.
Even though these vehicles lose their value the most over the first year, most of them are built to last and make fantastic choices for cars for you to own for the long haul rather than trading in every three to four years. It is good however to know the depreciation rate of your vehicle if you choose one of these as your daily driver or weekend warrior.
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