While basking in the glow of a new car purchase, few of us are already thinking about reselling it. Yet the resale value of your vehicle down the line is important, as depreciation is a major factor in its true cost of ownership.
According to Irvine-based automotive vehicle valuation company Kelley Blue Book, over the first five years of new-car ownership, depreciation is a typical car owner’s biggest transportation expense – trumping even the cost of gas, insurance or maintenance.
We spoke to Mariya Palanjian, director of marketing at ZadCars, a Sherman Oaks car-buying and -leasing consulting agency, about which models are the most popular as used vehicles – the easiest to sell and likely to command the best resale prices in the San Fernando Valley.
“The most popular used cars with drivers in the Valley are Japanese cars such as Toyota and Honda,” Palanjian said. “They are popular because of quality and reliability, which helps these cars maintain higher resale value than any other cars in the category.”
“If I were on a budget, I would buy a Toyota Camry because it’s the No. 1-selling sedan in the world, which makes its resale value higher,” Palanjian said. “Otherwise, I’d buy an RX 350 Lexus because it’s the No. 1-selling crossover in USA and it’s extremely reliable, which will definitely help me resell it at a higher value.”
Seven of the top eight models in Kelley Blue Book’s national 2013 Best Resale Value Awards are SUVs, with Toyota’s FJ Cruiser taking the No. 1 spot with an incredible 76% projected resale value after three years and 63% after 5 years. At No. 9 and No. 10 respectively, are the Honda Civic and the Toyota-made Scion tC. (The No. 2 spot went to Toyota’s Tacoma pickup.)
Of course, it’s not just the car you buy but the way you drive and maintain it that will also impact its salability as a used model.
Qualities local drivers look for in a used car include low mileage and a clean title (meaning no accidents), Palanjian said. They also look for a well-maintained vehicle with an on-time service history and a one-owner vehicle is always a plus. It’s important that the oil change sticker mileage matches the actual mileage on the odometer. And local buyers also look for a car with no fluid leaks, plus receipts and good explanations for repairs, especially if the vehicle has been in an accident.
Conclusion? Choosing a new car carefully and treating it with care can save you thousands of dollars in depreciation, even if you only own it for a few years.
— Paul Rogers, Brand Publishing Writer
For more ideas for local deals and saving tips, go back to Money Smart.