McLEAN, Va. -

On Friday, NADA Used Car Guide released the first of a two-part series on vehicle value retention. This latest monthly NADA Perspective report tackles retention within passenger car segments and next month’s will look at trucks.

So what car segments and individual models maintain their values the best?

First, here’s how NADA UCG went about determining retention levels, as noted in the report:

Retention figures were calculated for the most prevalent trim level of 3-year-old cars (2011 model-year), with results ranked in descending order within a given segment. For the purposes of this review, retention is a function of a three month average (Dec. 2013 – Feb. 2014) of NADA’s average trade-in value divided by a vehicle’s typically equipped Manufacturer Suggest Retail Price (MSRP). Note that a given vehicle’s rate of depreciation, and thus retention, is in part a product of the level of discounting at the time of new sale. As such, the MSRP does not include any incentives or rebates available at the time of purchase.

On the mainstream side, the top segment was the subcompact class, whose average retention was 54.4 percent.

“While subcompact cars are less versatile than their larger counterparts, they make up for their diminutive size with excellent fuel economy, the latest safety  equipment and a price point sure to please even the most value-conscious buyer,” the report indicates.

“Subcompact cars depreciated the least of any mainstream segment over the review period, earning an overall retention score of 54.4 percent,” it adds.

Next up were compacts, which retained 51.6 percent of their value. Midsize cars were at 47.4 percent and large cars commanded 44.8 percent retention.

Among all mainstream cars in the report, the vehicle with the highest retention was the Subaru Impreza — a compact car with 63.5 percent retention.

Meanwhile, for luxury cars, the retention leading segment was the luxury compact car segment (48.8 percent).

“Luxury compact cars give buyers a taste of the finer things a manufacturer has to offer while maintaining attractive entry prices. Often times these vehicles signify a purchaser’s first step into the luxury market and act as gateway vehicles up a respective brand’s product ladder,” the report stated.

It was followed by luxury midsize cars (48.5 percent) and luxury large cars (44.6 percent), respectively.
 

Among all the luxury models, the one with the best retention was the Lexus IS, a luxury compact (57.8 percent).

Meanwhile, NADA found that average retention for hybrid cars was at 48.5 percent and average retention for electric vehicles was 39.9 percent. The leading hybrid was the Lexus CT (62.4 percent).

“Looking at EVs, the Chevrolet Volt and Nissan Leaf were the only two mass-produced vehicles offered for sale during the 2011 model-year. The Volt’s retention score of 41.6 percent was only slightly better than the Leaf’s average of 38.2 percent,” NADA indicated.

“Since introduced, both the Volt and the Leaf have experienced price adjustments to make them more attractive in the new marketplace. In January 2013, Nissan announced that they would lower the entry MSRP of the Leaf by $6,400 to take the base price from roughly $35,200 down to $28,800,” it continued.

“Following Nissan’s lead, Chevrolet slashed $5,000 from the 2014 Volt’s MSRP, which lowered its starting price to $34,185.”

The entire report — complete with full analysis and model-by-model retention levels with the various segments — can be read here.

Joe Overby can be reached at joverby@autoremarketing.com. Continue the conversation with Auto Remarketing on both LinkedIn and Twitter.