[tweakmonkey]

NADA Market Report: Premium Luxury Vehicles Show Highest Annual Depreciation Rate: Financial News - Yahoo! Finance

NADA Market Report: Premium Luxury Vehicles Show Highest Annual Depreciation Rate
Monday March 3, 11:52 am ET

Replacement Levels and Customer Preference for Latest Models Drive Depreciation

MCLEAN, Va., March 3 /PRNewswire/ -- NADA Used Car Guide (NADA), the industry standard in used-vehicle valuation and information, reports the premium luxury vehicle segment experienced the highest annual depreciation rate among three-year-old models in 2007, due in large part to consumer preference for the latest new models and high replacement levels.

NADA Official Used Car Guide data, developed by NADA's editorial team and released today, shows premium luxury coupes and sedans held four of the top-10 spots for vehicle depreciation for the year, with a replacement rate of 43 percent on average.

"Luxury vehicle owners consistently demonstrate a strong preference for owning the latest new products in this segment," said Terrence W. Wynne, director of editorial and data services for NADA Used Car Guide. "The changing customer preferences and high manufacturer replacement rate effectively accelerates depreciation of these vehicles, deflating the resale performance of previous models and those competitive models late in their life cycle," he added.

According to the NADA report, the top-10 depreciating three-year old vehicle models in calendar year 2007 were:

Make Model Annual Depreciation
Jaguar XJ8 25%
Mercedes-Benz CL-Class 22%
Kia Rio 22%
Audi A8 21%
Lexus LS 21%
Suzuki Verona 21%
Volvo C70 20%
Hyundai Accent 20%
Audi A4 20%
Audi A6 20%

Wynne noted that the replacement rate directly impacts incentive spending in the luxury segment and compounds the pressure already present on the used-car market based on consumer change in design preference. He said that unreplaced models tend to have the heaviest incentives.

[MSP]

Kia Rio 22%

LOL!

[j0k3r]

I thought about picking up a used A6. I saw a 2004 with 38k miles, clear title, only minor scuff damage for $18k. I figure there has to be a reason they depreciate so fast though. From what I hear, it's the Quattro AWD, it might not be worth it.

[James K]

Hyundai Accent 20%

My 02 Accent is probably worth about 50 cents by now.

[MSP]

It should be illegal to sell certain cars without gap insurance. Image how many suckers have bought a $12,000 Kia or Hyundai, financed for 5-6 years, and then totaled it within the 1st year or so. Talk about being upside-down on the loan.

[nidex]

Well looks like it's time to get rid of my A4. I thought this list was gonna be all American cars(and Kia's)