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Aug 7, 2008 
With gas prices rising, fuel efficient vehicles are gaining worth
You can’t call them “good investments” because they inevitably depreciate. But the models in our ranking of the top 10 vehicles with highest resale value do amount to sensible purchases for the way they minimize the dollar losses associated with owning and maintaining a vehicle.
The models on our list retain a higher percentage of their original purchase price than any other car you can buy. But high gas prices are having a dramatic effect on prices — so much so that in just a matter of weeks, the list of the top 10 vehicles with the highest resale values will look different.
“Economy cars are improving,” says John Blair, chief executive officer of Automotive Lease Guides (ALG), a market research firm headquartered in Santa Barbara, Calif. “The outlook for small, fuel-efficient vehicles is much brighter today versus a year ago. And the outlook on SUVs has changed dramatically in the other direction.”
So it’s no surprise that the car that tops this ranking, the playful Mini Cooper, is one of the most fuel-efficient models on sale in the United States. It will hold more than 60 percent of its value after three years of ownership.
None of the models on our resale honor roll give up more than 15 percent of their purchase price per year through their first three years, based on data from ALG. And as automobile depreciation goes, that’s as good as gold. Click on the “slide show” link below for the full list of vehicles with the highest resale values.
Even though rising fuel prices have caused fuel economy to have a greater impact on resale values, most of the models in our ranking don’t ask you to sacrifice in the service of fiscal good sense. They are fun and rewarding to drive, each in their own way.
Some express youthful nonconformity, like the Scion xB, Nissan Rogue and Volkswagen New Beetle Convertible, numbers 7, 9 and 10, respectively. The Infiniti G37 Coupe, BMW 1 Series and Audi S5, which rank second, third and tenth, combine sophistication with spirited energy.
Volkswagen’s R32, at number No. 5, exudes athletic exuberance. The four-wheel-drive convertible Jeep Wrangler, No. 4, invites rugged adventure.
Even the two top-10 finishers that appear purely practical, Honda’s CR-V and Civic Hybrid, are far from pedestrian. They’re smartly styled, well engineered and have a refined driving experience. The Civic Hybrid adds technological charm to those attributes.
Smart styling contributes a lot to a vehicle’s resale value, says John Blair, chief executive officer of ALG. That’s due to fundamental market dynamics: supply and demand.
A model that is uniquely attractive will generate more demand from people shopping for used cars. Naturally, that greater demand pumps up its resale price. Thus, ALG puts a heavy weight on appearance when it estimates the residual value of new vehicles.
Residual value is analogous to resale value, but it’s not the same thing. It’s the price that a model in average condition is expected to take in when eventually it is sold at a wholesale used-car auction. The retail value of a vehicle — the price a consumer pays to buy it — varies a little from model to model but generally runs about 15 percent above the ALG residual value, Blair says.
The firm’s estimates are used by automotive lease writers to determine how much a model will be worth when its lease expires. Our top 10 vehicles with the highest resale value — there are actually 11 models on the list, thanks to one tie — are based on ALG residual values expressed as a percent of the original purchase price. All are current, 2008 models. The ranking excludes specialty cars produced in low numbers.
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In addition to a vehicle’s styling, its manufacturer’s reputation for quality has a big impact on how much value it retains, Blair says.
“The No. 1 influence is certainly a vehicle brand and the perception of the brand,” he says. “The used-car buyer is looking for a vehicle that’s not going to be a maintenance headache for them. If you have a strong brand, that has a real positive influence on the residual value.”
Of the vehicles on our list, the Honda Civic Hybrid, Honda CR-V, Infiniti G37 Coupe and Scion xB all have better-than-average predicted reliability, according to Consumer Reports. “Honda is at the top of that list,” in terms of having a sterling reputation for vehicle longevity, Blair says.
Forbes
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