Buying a car isn't just about being able to travel, it can also be a status symbol. Luxury vehicles provide smooth performance and quality features. However, depreciation will quickly reduce your car's value, whether it's a luxury or standard model.
Facts
Vehicle depreciation occurs because dealerships can't sell a vehicle as new once it's driven off the car lot, even if you return it in a few hours. Edmunds.com notes that a new car will lose 11 percent of its value to depreciation the moment it leaves the car lot.
Comparison
The National Automotive Dealers Administration reports that 2007 luxury vehicle models experience the highest annual depreciation for three-year old vehicles. NADA notes that four of the top 10 vehicles were in the luxury category, while the other six were standard vehicles. Jaguar and Mercedes-Benz had the highest depreciation at 25 and 22 percent, respectively.
Considerations
Depreciation is an unstoppable force for new cars. You can review a vehicle's resale value at three and five years, for an idea of how much to expect in depreciation.
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