Why You Should Know Your Car's Retention

Buying a car is one of the most important financial decisions you will make during your lifetime.  In fact, it likely ranks 3rd on the list of the most expensive items you'll buy, next to purchasing a home and your education.  The crazy part is you'll make this purchase more than ten times and you'll spend between $25,000 and $30,000 each time you make this purchase!  Given you're going to be spending a lot of money on caow do you ensure you're making good decisions with each time you buy a new car and sell or trade in your old one?  You need to understand the concept of retention values. 

What is retention value?  Retention value is the value an asset is expected to retain over a period of time.  Retention values will vary by vehicles due to a wide range of factors including vehicle age, the number of miles, overproduction and high incentives among others.  By understanding retention values before you purchase, you can get an idea of how much your car will be worth in the future.  

So what vehicle segments and vehicles are retaining their value?  Well, the National Automotive Dealers Association (NADA) Used Car Guide recently published retention values in their February and March Editions of NADA Perspective.  Here's a quick look at look at the top-10 truck and car retention values: 

Top 10 Truck Retention Values

Top 10 Car Retention Values

To get the full list of retentions values and to better understand how NADA calculates these numbers please check out the February and/or March Editions of NADA Perspective.