10 vehicles under $50k that hold their value the worst
MORE AT HIGH GEAR MEDIA
You'd think that the image and prestige of such models would be sought-after on the used-car market, too. But the moment these models are driven away from the dealership, their values go off their own fiscal cliff.
The reason? By the time they're three to five years old, they're just used cars. And on the used-car market they're subject to an entirely different set of shopper priorities.
“There’s a lot of blue sky in the value of vehiclesand the prestige and the image, and that’s much more true of them when they’re new,” said Eric Lyman, vice president for editorial at ALG, a leading authority for vehicle value information. “Part of the prestige is owning the latest and greatest, and there’s a premium you’re paying for that.”
What's going to be valued (or not) in several years?
Put aside the gloss and glamor of those sybaritic money pits. Pragmatic factors rule most residual-value forecasting—like the reputation of the brand and the model; the vehicle's fuel economy ratings; and how competitive it remains in the market in terms of performance, styling, and comfort.
Think you're better off going with a recently redesigned model, as it may still look more contemporary and thus worth more years from now? That's not always true. “When the 2012 Honda Civic was redesigned, it received a lot of criticism by the press,” said Ibara. “It continued to sell really well on a retail basis, but we did track the fact that the 2012 Civic was not doing as well in value as the 2011.”
Even though the gasoline price shock of 2008 is already a distant memory, recent price swings have kept fuel economy a high priority for used-car shoppers, so it's no surprise that some of the vehicles with the worst residual values are those with some of the lowest mileage ratings (like the Nissan Armada and Nissan Titan) in their respective classes.
If you're torn between types of vehicles, it pays to consider that crossovers currently have something of a halo over them, and they may save you money on the depreciation portion of what it costs to own a vehicle. In general, crossovers are commanding higher resale values than sedans, while minivans are the vehicle segment that's doing worst in residuals.
It's really supply and demand
Supply and demand are also an integral part of the predicted value for vehicles. A new vehicle that's pushed out the dealership floor, deeply discounted, is likely to do poorly on the used market several years from now.
“If you see a vehicle that's not performing well in residuals, it's usually because of the volume,” said Ibara. “If the manufacturer chooses to sell a large volume of vehicles to Avis or Hertz, then those vehicles come back to the market when they're taken out of service—and that can depress values.”
In order to compile a list of vehicles that hold their value the worst, we first looked to ALG's updated list of 1-star vehicles—those in the lowest ten percent of the market for three-year residual ratings (holding just 34 to 44 percent of their value after three years). Within that group, we looked specifically at KBB five-year depreciation numbers, subtracted that from the market price, then expressed that value (as ALG does their residuals) as a simplified percentage of the original MSRP. The following list, then (all base models and 2013 model-year unless otherwise indicated), are the ten vehicles likely to be worth the lowest percentage of their original MSRP at trade-in time.