When considering which car to buy, resale value may affect your decision. The average small car loses about $7,400 in its first year on the road, according to the automotive research site Edmunds.com -- and cars tend to lose more of their original value than do SUVs or trucks. Luxury cars also tend to lose more value, at least initially, than do mid-market brands, largely because there's more money to lose.
So what kinds of cars retain their value the best? To find out, Money took a look at Edmunds.com's Best Retained Value Awards, which highlight which auto brands and specific models can be resold for the highest percentage of their original cost. Instead of simply glancing at the latest awards, we examined each year's winners dating back to 2011, the earliest available year, to find the brands and cars that tend to retain their value best over time. We also included two vehicles from each given category -- for example, there are two SUV winners -- to cover various price ranges.
The information is relevant no matter what kind of car owner you are. Obviously, if you're a driver who buys a new car every few years and needs to sell or trade in the old model, it's wise to know what cars are likeliest to retain their value -- because your ultimate resale price affects the overall cost of ownership. The typical car depreciates by 60% or more over five years. But certain vehicles, like the Honda Civic and Ford Mustang, only depreciate by an average of 35% over five years -- so they can be much cheaper to own, over the long term, compared to cars whose value tanks over time.
Drivers who plan on hanging onto their vehicles for the long haul should also be interested in this information, because part of the reason these cars retain their value so well is that they're durable and can generally stay safely on the road for hundreds of thousands of miles. Americans are holding on to their cars for an average of nearly 12 years, an increase of 15% from pre-recession levels. In addition to durability, you may want to consider what the value of your car would be when you do eventually try to sell it.
Even drivers who lease should pay attention to what vehicles retain value best. Why? A car's resale value helps determine monthly lease payments, according to Edmunds. So check out our list of vehicles with the best resale value to help you make decisions that are smart now--and perhaps even smarter down the road.