25 Nov 15

Best new cars to buy if you want to avoid residual value trap

Mercedes C-Class

Fuel and taxes are important factors to consider when buying a new vehicle, but the act of buying a car in itself is a huge cost factor too – as it turns a new vehicle into a used car.

On average, a new car loses 24% of its original value in the first year, after which the Residual Value (RV) declines at a gradually slower pace. But the resulting loss of value varies by brand and model, and the best way to limit your own losses is to choose the vehicles with the highest current Residual Value (RV).

German RV forecast specialist Bähr & Fess Forecasts has lined up the cars it predicts will have the best RVs by the second half of 2019, so in four years time or in line with an average car fleet cycle in Western Europe. As far as brands are concerned, the winners in 4 years' time are BMW, Dacia, Mercedes and Ford.

An example, quoted in the German magazine Focus Online, is the BMW 4 Series Gran Coupé, which after 4 years still would bring in 56% of its original price. On the other hand, the RV of Dacia cars may be lower in percentage, but the loss expressed in absolute value is lowest of all brands, as the initial price is relatively small.

Bähr & Fess has good news for owners or prospective buyers of Volkswagen cars: previous experience learns that scandals (such as Dieselgate) barely have an impact on RVs. This is confirmed by the most recent official data on car sales in Germany, where we see that for the moment the 'Dieselgate' issues arenot negatively affecting the residual values for any of the Volkswagen Group's brands. 

Lastly, an interesting observation on SUVs: the RV for off-roaders without 4x4 drive is better than those fitted with the expensive technology.

Authored by: Frank Jacobs