This doesn't just go for buying a car. When you lease a car, the amount it will be worth at the end of the lease is critical in determining your monthly lease payment price. It's called residual value, an important factor to keep in mind if you're shopping for a new car.
In a list compiled by Automotive Lease Guide, or ALG, the 10 cars expected to hold value the most over the next five years are an eclectic group (sedans and small sport utility vehicles, among others). What do these cars have in common?
"You see a much better alignment of production with market demands," says James Clark, editorial director of ALG.
What about cars that will hold the least value after five years?
"You'll see a lot of brands we traditionally have high-depreciation rates for," says Clark.
Some of these vehicles are heavily used as fleet vehicles for rental car companies; some (i.e. Korean brands like Hyundai and its subsidiary, Kia) have perceived quality issues, even though Clark says the Korean brands' "quality has actually gotten a lot better, but their perceived quality is still low."
Best Value Holders:
1. Volkswagen R32
MSRP: $32,990
Style: Performance
5-year residual value: 43 percent or $14,186
Engine: six-cylinder, 3.2-liter, 250 horsepower
Warranty: Basic -- 4 years/50,000 miles, powertrain -- 5 years, 60,000 miles
Special features: SIRIUS satellite radio, power glass sunroof, multi-function trip computer
Reasons it will hold value: It's a reasonably priced, low-volume car. It's a descendant/variant of the Volkswagen GTI, also known for its quality.
2. Jeep Wrangler
MSRP: $19,680
Style: SUV
5-year residual value: 42.9 percent or $8,443
Engine: Six-cylinder, 3.8-liter, 202 horsepower
Warranty: Basic -- 3 years/36,000 miles, powertrain -- lifetime limited warranty, certain restrictions apply
Special features: AM/FM radio with in-dash CD player & MP3 capability, Sentry Key Theft Deterrent System
Reasons it will hold value: It's cornered the niche market for people who like to do a lot of off-roading and has few competitors.
3. Mini-Cooper
MSRP: $18,700
Style: Hatchback
5-year residual value: 42.7 percent or $7,985
Engine: Four-cylinder, 1.6-liter, 118 horsepower
Warranty: 4 years/50,000 miles
Special features: Four years of complimentary roadside assistance, toggle switch controls, fully electronic throttle
Reasons it will hold value: It's sporty, fuel-efficient, reasonably priced and covers a wide spectrum of customers. It also has a good reputation.
4. Scion XB
MSRP: Manual $16,370, automatic $17,320
Style: Compact station wagon
5-year residual value: 39.5 percent or $6,466(manual)/ $6,841 (automatic)
Engine: Four-cylinder, 2.4-liter, 158 horsepower
Warranty: Basic -- 3 years/36,000 miles, powertrain -- 5 years, 60,000 miles
Special features: Tachometer and trip meter, 60/40-split folding rear seat, AM/FM CD and iPod capability
Reasons it will hold value: It's relatively fuel-efficient, reasonably priced and it has more space than compacts with similar prices.
5. Honda CR-V
MSRP: $20,700
Style: SUV
5-year residual value: 39.4 percent or $8,156
Engine: Four-cylinder, 2.4-liter, 166 horsepower
Warranty: Basic -- 3 years/36,000 miles, powertrain -- 5 years/60,000 miles
Special features: XM satellite radio, Honda satellite-linked navigation system, digital audio card reader
Reasons it will hold value: It's fuel-efficient for an SUV, seats five and has plenty of storage room.
6. Toyota RAV4
MSRP: $21,500
Style: SUV
5-year residual value: 38.9 percent or $8,364
Engine: V-6, 3.5-liter, 269 horsepower
Warranty: Basic -- 3 years/36,000 miles, powertrain -- 5 years/60,000 miles
Special features: AM/FM 6-disc CD changer with satellite radio capability and MP3/WMA capability, 10 cup holders
Reasons it will hold value: By SUV standards, it's fuel-efficient. It seats five and has plenty of storage room.
7. Infiniti G35/G37
MSRP: $32,250
Style: Sedan
5-year residual value: 38.9 percent or $12,545
Engine: V-6, 3.5-liter, 306 horsepower
Warranty: Basic -- 4 years, 60,000 miles, powertrain -- 6 years/70,000 miles
Special features: XM satellite radio, tire pressure monitoring system, heated front seats
Reasons it will hold value: It's a great price for the product. The performance is similar to the BMW 335, but is approximately $8,000 cheaper.
8. Dodge Viper
MSRP: $87,460
Style: Sports car
5-year residual value: 38 percent or $33,235
Engine: V-10, 8.4-liter, 600 horsepower
Warranty: powertrain -- 3 years/36,000 miles
Special features: AM/FM stereo with CD player and CD changer, Sentry Key Theft Deterrent System
Reasons it will hold value: It's a low-volume sports car that has an exotic feel and is reasonably price compared to exotic sports cars.
9. BMW 1 Series
MSRP: $28,600
Style: Small luxury/small-family
5-year residual value: 37.8 percent or $10,811
Engine: Six-cylinder, 3.0-liter, 230 horsepower
Warranty: 4 years/50,000 miles
Special features: Two-way power glass moon roof, anti-theft AM/FM audio system with 10 speakers and satellite radio/MP3 capability
Reasons it will hold value: It has a very low volume and is smaller, lighter and cheaper than the BMW 3 series.
MSRP: $19,430
Style: SUV
5-year residual value: 37.5 percent or $7,286
Engine: Four-cylinder, 2.5-liter, 170 horsepower
Warranty: Basic -- 3 years/36,000 miles, powertrain -- 5 years/60,000 miles
Special features: Drive computer, XM satellite radio, MP3/WMA capability
Reasons it will hold value: It's a fuel-efficient SUV and good for those wishing to downsize a bit.
Worst Value Holders
10. Hyundai Entourage
MSRP: $23,995
Style: Minivan
5-year residual value: 20 percent or $4,799
Engine: V-6, 3.8-liter, 250 horsepower
Warranty: Limited -- 5 years/60,000 miles, powertrain -- 10 years/100,000 miles
Special features: Projector-type fog lights, dual front automatic temperature control
Reasons it won't hold value: It's a combination of product deficiencies, poor marketing and historical depreciation of Hyundai vehicles.
9. Chevrolet Malibu Classic
MSRP: $20,550
Style: Sedan
5-year residual value: 20 percent or $4,110
Engine: Four-cylinder, 2.4-liter, 169 horsepower
Warranty: Basic -- 3 years/36,000 miles, powertrain -- 5 years/100,000 miles
Special features: OnStar with standard one-year directions and connections plan, three-month trial of XM satellite radio
Reasons it won't hold value: The body style is in its last generation. It is sold to rental fleets. As such, rental companies sell them after a year, leaving a large supply of them and making resale prices low.
8. Kia Optima
MSRP: $17,030
Style: Sedan
5-year residual value: 20 percent or $3,406
Engine: Four-cylinder, 2.4-liter, 162 horsepower
Warranty: Basic -- 5 years/60,000 miles, powertrain -- 10 years/100,000 miles
Special features: AM/FM/CD audio system, optional trip computer, optional MP3-compatible audio system
Reasons it won't hold value: It's primarily a rental fleet car. The Kia brand typically sees high depreciation rates largely because of past quality issues.
7. Suzuki Forenza
MSRP: $13,999
Style: Sedan
5-year residual value: 19.5 percent or $2,730
Engine: Four-cylinder, 2.0-liter, 127 horsepower
Warranty: Basic -- 3 years/36,000 miles, powertrain -- 7 years/100,000 miles
Special features: Eight-speaker AM/FM/CD audio system with MP3/WMA playback, heated outside mirrors
Reasons it won't hold value: It's not really designed for the U.S. market. It's primarily a fleet car. Also, this is the last year this model will be made.
6. Hyundai Accent
MSRP: $10,775
Style: Subcompact
5-year residual value: 19.3 percent or $2,080
Engine: Four-cylinder, 1.6-liter, 110 horsepower
Warranty: Basic -- 5 years/60,000 miles, powertrain -- 10 years, 100,000 miles
Special features: AM/FM/XM/CD/MP3 audio system with auxiliary input jack
Reasons it won't hold value: It's a subcompact that's often used for rental fleets. The brand has a history of high depreciation for perceived quality issues.
5. Kia Rio
MSRP: $11,540
Style: Subcompact
5-year residual value: 19.2 percent or $2,216
Engine: Four-cylinder, 1.6-liter, 110 horsepower
Warranty: Basic -- 5 years/60,000 miles, powertrain -- 10 years/100,000 miles
Special features: Optional AM/FM/CD audio system
Reasons it won't hold value: Similar to the Hyundai Accent's reasons -- it's a subcompact fleet car with past quality issues.
MSRP: $13,299
Style: Subcompact
5-year residual value: 19 percent or $2,527
Engine: Four-cylinder, 2.0-liter, 127 horsepower
Warranty: Basic -- 3 years/36,000 miles, powertrain -- 7 years/100,000 miles
Special features: AM/FM/CD/cassette stereo with eight speakers, heated rearview mirrors
Reasons it won't hold value: Although it's priced significantly lower than its direct competitors, such as the Honda Fit, the Reno is known to underperform, get poor fuel efficiency for its class, ride badly and fall short in refinement.
3. Kia Spectra
MSRP: $13,545
Style: Compact
5-year residual value: 18.8 percent or $2,546
Engine: Four-cylinder, 2.0-liter, 138 horsepower
Warranty: Basic -- 5 years/60,000 miles, powertrain -- 10 years/100,000 miles
Special features: AM/FM/CD audio system with audio input jack for MP3 devices
Reasons it won't hold value: For many of the same reasons other Kias won't -- it's a rental fleet car and it has perceived quality issues.
2. Chevrolet Uplander
MSRP: $22,320
Style: Van
5-year residual value: 18.5 percent or $4,129
Engine: V-6, 3.9-liter, 240 horsepower
Warranty: Basic -- 3 years/36,000 miles, powertrain -- 5 years/60,000 miles
Special features: OnStar with one-year Safe and Sound Plan, AM/FM/CD stereo with MP3 playback and auxiliary input jack
Reasons it won't hold value: Its gimmick of taking a minivan and trying to make it look like an SUV didn't work. This model will not be produced after this year.
1. Lincoln Town Car
MSRP: $45,295
Style: Sedan
5-year residual value: 18 percent or $8,153
Engine: V-8, 4.6-liter, 239 horsepower
Warranty: Basic -- 4 years/50,000 miles, powertrain -- 6 years/70,000 miles
Special features: Heated front seats, universal garage door opener.
Reasons it won't hold value: It's a fleet car and it's not fuel efficient (it's only sold as a V-8).
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