Which Cheap Cars Have the Best Resale Value?
New vehicles lose about 10 percent of their value the moment they leave the dealer's lot. For buyers who don't plan to drive that new car or truck into the ground, depreciation is a key factor to consider when calculating the total cost of the vehicle. Cheapism.com turned to Kelley Blue Book's 2015 Best Resale Value Awards to compile a list of six new cars selling for $25,000 or less that are expected to retain 45 percent or more of their original value five years out. Read on for value-retention tips that apply to all vehicles.
The 2015 Honda Fit was redesigned this year without sacrificing its popular Magic Seat feature, which allows the back seats to fold down or the seats' bottoms to fold up. With a starting price of $16,500 and an estimated 41 mpg on the highway, the Fit is a frugal car all around. Kelley Blue Book estimates the resale value will be 65 percent of the initial cost after three years and 47.7 percent after five years.
Retaining 47.1 percent of its value after five years and 61.3 percent after three, the 2015 Subaru Impreza comes with all-wheel drive and delivers an impressive 37 mpg on the highway. Starting at $20,000, this is one of the least expensive AWD vehicles on the market and a good choice for drivers who live in, or often travel through, snow-bound regions.
One of the most popular compact pickups in the United States, the Toyota Tacoma is large enough for basic chores and weekend getaways without the bulk of a full-size pickup. The two-wheel-drive model with an "access cab" (no doors to get into the cab's rear seats) starts at about $21,650 and should retain 60.4 percent of its value after five years and 74.9 percent after three.
A vehicle made for off-roading, the Jeep Wrangler comes standard with four-wheel drive and a 3.6-liter Pentastar V6 engine. The basic Wrangler Sport starts at $23,500 and retains 67.9 percent of its value after three years and 57.4 percent after five. The base model doesn't feature air conditioning or power windows, but buyers receive a tool kit with wrenches for removing the doors and top.
Jeep holds the lead in this category as well, with a three-year resale value of 72 percent and a five-year resale value of 60.4 percent. The mid-size Wrangler Unlimited has four doors and is longer than the compact Jeep, but the 3.6-liter V6 engine and four-wheel drive are still standard. Although the MSRP is $26,695, buyers have been able to negotiate a price that falls below $25,000.
The Prius is Toyota's most popular alternative-fuel vehicle, but the Camry Hybrid shouldn't be overlooked. It delivers about 43 mpg on the highway and 39 mpg on city streets, and bears a starting sticker price of $22,970. The Camry Hybrid retains 58.7 percent of its value after three years and 46.7 percent after five.
In addition to ranking individual vehicles, Kelley Blue Book awarded two brands for their overall performance. The first, Subaru, boasts eight winning or runner-up vehicles in the crossover, SUV, sedan, coupe, and hybrid categories. The second, Lexus, has been the best luxury brand for four years running, according to KBB. Fifteen Lexus vehicles placed in the crossover, SUV, sedan, coupe, and hybrid categories.
Depreciation can cost owners more than repairs, insurance, or gasoline, so it's worth paying attention to several factors that significantly affect the resale value of every car. For example, a vehicle that has been in an accident causing more than a scratch or small dent is worth less than one with a clean record. Ron Montoya, consumer advice editor for Edmunds.com, suggests three ways owners can keep the resale value of their vehicle as high as possible, barring any unfortunate mishaps.
Check the manual for suggested service intervals, although many new vehicles automatically alert drivers when it's time. Also, keep records to show prospective buyers that the vehicle has been maintained as directed. Dealers' service departments do this automatically, but when using an independent mechanic it's up to owners to document the work.
Avoid driving more than 12,000 to 15,000 miles a year, the average for drivers in the United States. Ron Montoya of Edmunds.com says an older car can be worth more than a newer model if it has logged fewer miles.
Keep the vehicle clean and consider banning food and drinks, aside from water. If spills happen, take care of them immediately before they have a chance to settle. Sometimes it's possible to remove a stain or at least minimize any lasting impact.