Which Car Company Has Best Resale Value
When it comes to buying a car, one of the most important factors for a savvy car buyer is the resale value. While some brands may have higher MSRPs than others, in the long run, resale values can heavily impact a user’s pocketbook.
Fortunately, Kelley Blue Book, a trusted car valuation company, shines a light on which automakers hold up the strongest when it comes to resale value. Through comprehensive metrics and industry analysis, Kelley Blue Book assesses which brands are most likely to retain a healthy market share and/or rank higher in the second-hand car market. In its 2019 study, Kelley Blue Book rated a total of nine vehicle brands on the basis of their predicted resale values over a five year period.
The top three vote-getters, coming in at first, second, and third respectively, were Toyota, Subaru, and Jeep.Toyotas often stand decades after their first purchase due to its legendary reliability, quality parts, and unique design elements. While Subaru may have a lower resale value than Toyota, the company enjoys a loyal following in North America due to its standard all-wheel drive systems, fuel-efficiency, and a reliable track record of repairs and maintenance. Rounding out the top seven were Ford, Honda, Nissan, Chevrolet, and GMC.
In addition to these top-tier contenders, several other automakers had their moment in the sun in 2019. Luxury car manufacturer Mercedes-Benz was awarded for having the best one-year depreciation value, with an impressive 9.7%. This is due to the brand’s prestigious reputation and selling power. Meanwhile, Volkswagen made a comeback from years of scandal and stagnation, with a rating of two stars for resale value.
It should also be noted that separate Kelley Blue Book rankings have been established for specific vehicle types such as electric vehicles, crossovers, and SUVs. The Hyundai Kona EV was the clear winner in electric vehicles, with a four-year resale value estimated at 75%. On the other hand, Toyota Highlander and Honda Pilot tie for the top spot in SUVs, with respective resales values of 55% and 54%.
For savvy car buyers, investing in a reputable brand is often the best course of action. With a wealth of offerings on the market and vast research available, it’s essential to do one’s homework before diving into the car buying process. Resale values may not always be the deciding factors in a buyer’s decision, but it pays to know the industry trends for long-term investments.
The Economic Impact of a Car’s Resale Value
For dealerships and private sellers, the importance of getting a car at market value is crucial. As supply and demand systems are always at play in the car industry, both parties stand to benefit from a well-informed purchase. In an economic analysis, it’s easy to see how a car’s resale value could affect buying decisions. A car that has held up well over time is likely to generate more business and therefore have more associated economic activity. This ties directly into ticket prices and potential profit margins.
The more money one can get out of a sale, the more likely they will be to reinvest these revenues into other sustainable and profitable markets. This is why having accurate and reliable metrics on a car’s resale value is so important—it allows dealers, potential buyers, and private sellers to get the most return on their money and reinvest it into other activities.
Additionally, when a vehicle’s resale value is strong, it not only has a positive economic impact, but it also brings peace of mind and confidence to the purchaser. A car owner can rest assured knowing that their investment will hold up well and possibly even increase in value over time. This is essential for those looking to find a reliable vehicle with a high return rate.
Analyzing the Impact of Brand Reputation
When assessing car brands, many shoppers also look beyond the vehicle’s performance record and into the public image of the manufacturer. Reputation is a powerful factor, and can play an important role in a buyer’s decision. Investment research groups have taken a close look into the resale values of top rated carmakers and have determined that the public perception of a company is inextricably linked to its performance metrics.
Brands that are widely respected often develop a loyal consumer base and can inspire consumer confidence in a way that smaller or lesser known-brands cannot. In the industry, Toyota and Honda have long been regarded for their quality and affordability, and their public image is a testament to that. As such, both of these Japan-based car brands often command higher resale values than many other brands.
Aside from visual and tangible performance metrics, a key factor in brand reputation is longevity. How has a company’s technology advanced and, more importantly, how well have they maintained their standards and commitment to quality over time? These are key questions to ask when assessing a car’s resale value. The longer a brand has been around, the more likely it is that their vehicle prices will hold up over time.
How Technology may Impact Future Resale Values
As autonomous and semi-autonomous vehicles become more popular, carmakers will be forced to rethink how they rank their resale values. Traditional metrics such as mileage, engine power and fuel efficiency are still relevant, but new technologies such as advanced safety features, predictive maintenance systems and autonomous driving systems, add entirely new dimensions to the car’s performance.
For instance, Toyota is already implementing a predictive maintenance system in its cars that allow users to keep track of their car’s performance and alert them of any necessary repairs. This advanced tech will not only provide better maintenance, but it could also potentially drive up a car’s resale value as it ensures that a vehicle is well taken care of and is likely to endure a longer lifespan.
The same goes for autonomous driving. While the technology is still relatively new, carmakers are banking on the fact that it will enhance the performance and reliability of their cars. While it is uncertain as to what the exact resale value of these cars will be, it is safe to assume that it will be higher than cars without such tech.
Qaulity vs Cost Considerations
When it comes to purchasing an automotive, cost often plays an essential part in the decision-making process. That said, as with any kind of investment, a higher price tag doesn’t necessarily guarantee a higher return on investment. It’s essential to look beyond the superficial factors and consider the long-term implications. Will parts and repair work be affordable to maintain? Does the vehicle have safety features and other tech enhancements? Such considerations should always be taken into account when assessing resale value.
Ultimately, car buyers should be sure to do their due diligence and explore options, rather than settle for the lowest price tag on the market. While it may be tempting to scrimp and save, it’s important to weigh quality against cost. Investing in a car with better resale value may prove more beneficial in the long run.
How to Maximize Resale Value
As noted previously, the car’s resale value is heavily impacted by the level of maintenance it receives over time. The better the care one puts into their vehicle, the more likely it will retain its official resale values, or even exceed it. Regularly changing the oil, checking brakes, tires and the engine are essential for a car’s overall health, and can usually be done at lower costs.
It’s also important to keep a car’s interior and exterior clean and free from dirt, stains, and other damages. Here, a car cover, wax or polish and season-appropriate cleaning can go a long way. Lastly, attempting to keep the odometer lower whenever possible can help reduce depreciation and potentially increase a car’s resale value over time.
Finding Good Sources to Research Valuation
In addition to the aforementioned metrics, there are also a number of online and offline resources available to car owners when researching resale values. Sites like Kelley Blue Book, AutoCheck and Edmunds can provide news and user reviews on a particular car model, which can give users a better understanding of a car’s historical value and potential outlook.
Talking to local automobile dealerships, reading trade publications and discussing the subject with trusted mechanics are other potential sources that can help to arrive at a realistic resale value. And finally, logging onto online forums to talk with other car owners can be a great way to get firsthand opinions and invaluable insight.
