Kelley Blue Book predicts the Toyota Tundra will return the highest resale value of any 2021 … [+]
Astute new-vehicle shoppers know that depreciation, or how much of a car or truck’s original value is lost over time, is the largest long-term ownership expense. Picking a car that has a higher expected resale value not only affects how much a given model will be worth at trade-in time, but also determines how steep or affordable monthly payments will be among those who lease, as payments are based on the amount of depreciation incurred over the life of the contract.
According to Kelley Blue Book (KBB), the average 2021 model-year vehicle will lose about 60 percent of its original value after a typical five-year ownership period. Of course a given model’s ultimate resale value will depend on its mileage and condition, but all else being equal, that means a car priced at $40,000 today will only be worth around $16,000 after five years on the road.
Resale values are especially important with costlier models, simply because there’s more money at stake to lose. At the aforementioned average rate of depreciation a $65,000 luxury model will lose $39,000 of its initial sticker price after a half decade.
But some vehicles inherently retain more of their original values than others, and this is based on a plethora of factors. These include supply and demand issues, and a how deep the discounts or generous the automakers’ incentives it takes to sell a given vehicle line. Regional preferences also affect a given model’s long-term value – four or all-wheel-drive models are in greater demand in snowy parts of the country, for example, while big pickups rule the roads in the South.
Not surprisingly, Eric Ibara, director of residual values for Kelley Blue Book, says that the COVID-19 pandemic has had an effect on new-vehicle resale values. “We are seeing a slight increase in the overall average residual value for new vehicles, explained by the significantly reduced car supply as well as the market continuing to shift to SUVs, which tend to have higher resale values,” he explains.
X Factor: A Model X at the Tesla flagship store in Shanghai.
Fortunately for new-vehicle shoppers, KBB compiles an annual list of the models that are predicted to return the highest average five-year resale values. We’re featuring KBB’s best overall list by vehicle category below.
The mainstream brand that takes first place in terms of resale values this year is Toyota, with Porsche taking top honors among luxury makes. The top-performing models overall in terms of value retention for 2021 are all either pickup trucks or truck-based SUVs, with the Toyota Tundra full-size pickup leading the pack, estimated to hold onto 59 percent of its original cost after five years. Other top perfomers, which average a 56 percent resale value, include the GMC Sierra, Ford Ranger and F-150, Jeep Gladiator, Ram 1500, and the Toyota Tacoma pickups, along with the Jeep Wrangler and Toyota Land Cruiser and 4Runner SUVs.
These are the makes and models in each vehicle class KBB predicts will bring the highest rate of return after five years, and the percentages of value retained:
Click here for more information on any of these models via KBB.com
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