Your car is the second most expensive purchase you're likely to make after your home. Now a new study from CarGurus.com shows that luxury cars are out and pickup trucks are in when it comes to holding resale value.
Among the losers in the resale value lottery were the following rides:
- 2010 BMW 3 Series
- 2012 Mercedes-Benz E Series
- 2008 Volvo XC90
- 2009 Audi A4
- 2009 Cadillac STS
- 2012 Cadillac SRX
Why would these vehicles in particular lose their value? Because with luxury cars, when you buy new, it's very easy to run up the price sky high. Take the BMW 3. You can buy an entry level model in the 3 series in the low 30s. (The average new car price in America today is right around $32,000). Or you can buy a 3 series that’s $60,000 or more.
With a lot of luxury cars, people pile on the options. But the danger of that is if you dump that car during the first few years of ownership, the value has dropped like a rock because of depreciation and you have to eat that loss.
I think about how Tesla does business. You build the Tesla S online. There's no salesperson telling you about this or that gotta have feature. Yet someone can still easily double the price of the car by the time they’re done with the options. (Click here to read why I decided to buy a Tesla S.)
So, if you like luxury cars and your money matters to you, be sure to buy them used. This is true for luxury cars more than any other kind of vehicle.
Now that you know what doesn't hold its resale value, what does hold value? The CarGurus.com survey says its mostly pickup trucks. All models listed below are 2012, unless otherwise indicated.
- Ram 1500
- Nissan Titan
- Dodge Charger
- Ford F-150
- Chevrolet Silverado 1500
- Jeep Liberty
- Ram 2500
- 2008 Dodge Ram 2500
- Jeep Wrangler
- Chevrolet Tahoe
Be sure to check out my used car buying tips before you start your next vehicle search!