Buying a new car is a significant investment, and while the excitement of driving off the lot in your shiny new vehicle is undeniable, there’s a crucial financial aspect that every car buyer should consider: depreciation. It’s a well-known saying that a car loses value the moment you drive it away, but the extent of this depreciation and how it varies between models is less understood. This is where Kelley Blue Book Value becomes incredibly important. Understanding a vehicle’s resale value, determined by sources like Kelley Blue Book, can translate to significant financial benefits down the line, potentially saving you hundreds or even thousands of dollars when you decide to trade in or sell your car.
In today’s market, where new car prices are at record highs, largely due to ongoing supply chain challenges and increased manufacturing costs, being informed about resale value is more critical than ever. Data from Kelley Blue Book shows that the average transaction price for a new vehicle reached a record $49,507 at the end of 2022, and vehicles are consistently selling above the manufacturer’s suggested retail price (MSRP). Given this financial landscape, factoring in a vehicle’s predicted resale value is not just smart – it’s essential for making informed purchasing decisions.
Why Car Resale Value and Kelley Blue Book are Intertwined
Depreciation is often the largest expense associated with car ownership in the first five years. The average new car in the 2023 model year is projected to retain only about 45% of its original value after five years. For instance, a new car bought for $45,000 could be worth approximately $20,250 after just five years. However, vehicles with strong resale values buck this trend, retaining a significantly larger portion of their initial price.
Kelley Blue Book (KBB) has been a trusted authority in vehicle valuation for nearly a century. Their annual Best Resale Value Awards highlight the brands and vehicles predicted to retain the most value over the initial five years of ownership. These awards serve as a valuable guide for car buyers looking to minimize depreciation and maximize their return on investment when it’s time to sell or trade-in.
Kelley Blue Book’s 2023 Best Resale Value Award Winners
For 2023, Toyota was named Best Resale Value: Brand, marking its seventh win in this category. Its luxury sibling, Lexus, secured the Best Resale Value: Luxury Brand award for the second consecutive year and fourth time overall. These accolades underscore the brands’ consistent reputation for quality, reliability, and strong resale value across their lineups.
Janice Yoell, senior manager of valuations for Kelley Blue Book, noted the evolving automotive market and the importance of adapting award categories. “As the automotive landscape shifts and manufacturers continue to introduce more and more electric models, it was fitting to expand the award categories accordingly,” she stated. Kelley Blue Book expanded its Best Resale Value Awards to include dedicated categories for Electric Car, Luxury Electric Car, Electric SUV, Luxury Electric SUV, and Electric Truck, reflecting the growing electric vehicle market.
2023 Top Brand and Category Winners: A Snapshot
Top Brands:
- Best Resale Value: Brand: Toyota
- Best Resale Value: Luxury Brand: Lexus
Select Category Winners:
- Compact Car: Honda Civic
- Midsize Car: Honda Accord
- Sports Car: Chevrolet Corvette
- Minivan: Toyota Sienna
- Compact SUV: Subaru Forester
- Midsize SUV – 2-Row: Subaru Outback
- Midsize SUV – 3-Row: Hyundai Palisade
- Full-Size SUV: GMC Yukon
- Electric Car: Chevrolet Bolt EV
- Luxury Electric Car: Tesla Model S
- Electric SUV: Ford Mustang Mach-E
- Electric Truck: Ford F-150 Lightning
- Compact Pickup Truck: Ford Maverick
- Midsize Pickup Truck: Toyota Tacoma
- Full-Size Pickup Truck: Toyota Tundra
(For a comprehensive list of all categories, please refer to the original article’s tables.)
2023 Best Resale Value: Top 10 Cars
Kelley Blue Book also highlights the Top 10 cars across all categories predicted to have the best resale value. These models represent a diverse range of vehicle types, all united by their exceptional ability to hold their value:
- Chevrolet Corvette
- Ford Bronco
- Ford Maverick
- Honda Civic
- Jeep Wrangler
- Subaru Crosstrek
- Tesla Model X
- Toyota 4Runner
- Toyota Tacoma
- Toyota Tundra
These Top 10 vehicles are projected to retain around 60% or more of their MSRP after five years, significantly outperforming the average vehicle.
How Kelley Blue Book Determines Car Value
Kelley Blue Book’s Best Resale Value Awards are based on projections from their Official Residual Value Guide. These residual values are meticulously calculated by experienced automotive analysts who consider millions of transaction data points and utilize sophisticated statistical models. The awards recognize vehicles with the highest projected residual values after five years, expressed as a percentage of their original MSRP. These values represent the predicted auction value of a vehicle in average condition with 75,000 miles after five years.
It’s important to note that while market conditions and supply and demand dynamics play a role in resale value, vehicles that consistently hold their value often share characteristics like strong brand reputation, reliability, and high consumer demand.
Making Informed Car Buying Decisions with Kelley Blue Book
Understanding Kelley Blue Book Value is an indispensable tool for any new car buyer. By considering a vehicle’s predicted resale value, you can make a more financially sound decision, minimizing potential losses from depreciation and maximizing your future trade-in or resale value. Before purchasing your next vehicle, consulting Kelley Blue Book for resale value information is a crucial step in smart car ownership. Choosing a vehicle with a strong Kelley Blue Book Value can provide financial peace of mind and save you money in the long run.
