Understanding Vehicle Resale Values

Understanding Vehicle Resale Values

April 14th 2021 | Lia Ortiz

There are many things to consider when purchasing a new vehicle and one of them is understanding the importance of resale value. When you purchase a vehicle that has a high resale value, you are able to maximize the amount you get back when you eventually trade-in your vehicle.

What is Depreciation & Resale Value?

According to Kelly Blue Book[1], depreciation is how much value your car loses over time. Resale Value (also known as residual value) is the amount your car is expected to sell for at some point in the future. A useful rule of thumb to remember is that a vehicle with a good resale value retains at least 40-50% of its original retail price after 5 years.

For example, if you purchase vehicle A at $30,000 with a residual value of 55%, you can still get around $16,500 when you sell it in 5 years. Compare that to vehicle B which sells at a cheaper price of $20,000 but has a lower residual value of 30%. You are only able to get around $6,000 at the end of its life span. You end up losing more money by opting for the cheaper option.

Understanding Vehicle Resale Values

Now you see the importance of looking at resale values when shopping for a vehicle. Which vehicles have the highest resale values? Below are the top vehicles with the best resale values[2].

 

Vehicles with the Best Resale Values

VEHICLE CATEGORY RETAINED VALUE AFTER 5 YEARS
Toyota Tundra Full-Size Pick-Up Truck 59%
Toyota Tacoma Mid-Size Pick-Up Truck 55.8%
Toyota RAV4 Hybrid Hybrid Vehicle 48.6%
Mercedes-Benz G-Class Luxury Full-Size SUV 48%
Subaru Crosstrek Subcompact SUV 45%
Toyota Sienna Minivan 44.7%
Subaru Impreza Compact Car 43.1%
Porsche Macan Luxury Compact SUV 42%
Subaru Outback Mid-Size SUV 41.3%
Toyota Camry Mid-Size Car 40.9%
Lexus IS Entry Level Car 38.4%
Lexus LS Luxury Car 33%

 

The next time you shop for a new vehicle, consider the long-term and look at how much value your vehicle is really giving you.

 


[1] https://www.kbb.com/best-cars/best-resale-value-cars-trucks-suvs/

[2] https://www.forbes.com/sites/jimgorzelany/2021/03/05/these-are-the-vehicles-returning-the-best-resale-values-for-2021/

About the Author

Lia Ortiz has been in the automotive industry for 4 years. Starting out as a public relations and events coordinator for Honda Philippines, she then moved to Vancouver and is currently working as a Digital Marketing Strategist for OpenRoad Auto Group. She specializes in SEO, SEM, and Social Media Advertising (with a little bit of writing on the side).

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