Why the Prius Is Best Mid-Size Sedan

From AOL Autos:

Which Car IsWorth More?
Why the Prius Is Best Mid-Size Sedan
For Retaining Value: 10 Best & Worst

Updated:2006-08-02 17:41:12

Does It Hold Value?
Depreciation Hits and Misses

By ERIC PETERS

Understanding depreciation rates -- how well or poorly a vehicle retains its value over time -- is key to making a smart buy because it will affect how much (or little) you'll recoup at trade-in time. Depreciation rates also affect lease terms -- and can get you into big trouble over a new car loan, potentially leaving you owing more on the car than it's worth.


The average vehicle loses about 10-20 percent of its value in the first year of ownership -- but some lose as much as half their value before they're three years old. And that can leave you "upside down" on your new car loan -- insider lingo meaning you owe more than the car's actually worth.

General factors affecting depreciation rates include the vehicle's track record for being well-built and reliable, as well as the overall reputation of the brand of the vehicle. Consumer demand for a given vehicle also plays a large role in determining how well it holds value. Owners of undesirable models -- for example, Pontiac's ill-starred Aztek van -- can see the net worth of their vehicles plummet faster than the Dow Jones in 1929.

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