Big Surprise: Fuel efficient cars are holding their value better than other cars

by Benjamin Jones on August 24, 2008

It shouldn’t be surprising to anyone that buys gas that the market for fuel-efficient vehicles has exploded recently. Not only is gas expensive, but the psychological effects of paying big time at the pump has driven people toward hybrids and small cars, making many models scarce and putting the Civic up on top.

Recently, GFF took a look at some numbers, which show that hybrids, which already had a comparatively high residual value, have gotten a further bump. They make an interesting comparison between the discontinued Honda Insight, still the MPG king as far as production vehicles go, and Acura’s very popular sports car, the RSX:

For instance, in the US, values for a three- or four-year-old Honda Insight are almost identical to the more upmarket Acura RSX Sports Coupe at around $14,800 for a 2005 and $13,500 for a 2004.

This made me want to do my own research to see how big the gap is between vehicles on opposite ends of the spectrum. Using values from KBB, I compared the Ford F150, Honda Civic, Toyota Prius, and Dodge Caravan to see how values held up when comparing 2008 models to still-young 2004 models. Read on to found out what I learned.

Efficient cars, not just hybrids, are holding their value

First, I compared the F150 and the Civic head to head. Not because they represent the same market, but because they symbolize the American market shift from big trucks to sensible cars. Here are the raw values from KBB:

  • 2008 F150 MSRP: $26,140.00
  • 2004 F150 Suggested Retail: $9,670.00
  • 2008 Civic MSRP: $16,280.00
  • 2004 Civic Suggested Retail: $11,980.00

So, where the 2004 F150 only has 37% of the value of a new F150, the non-hybrid Civic still has 75% of the value of a new car. Even though Honda usually receives top marks for value retention, there is a huge difference between two of the country’s most popular vehicles.

On the other side of things, I chose the Caravan and the Prius because they are both icons in the auto industry. For years, the Caravan has been the “family vehicle” of choice, but recently, with the “green” movement in full swing, more and more families have been giving up the sliding doors and hopping into Priuses. Here’s what KBB has to say about the prices:

  • 2008 Caravan MSRP: $22,470.00
  • 2004 Caravan Suggested Retail: $9,070.00
  • 2008 Prius MSRP: $22,160.00
  • 2004 Prius Suggested Retail: $21,035.00

As you might have expected, the Prius wins, with 2004 models still bringing in 95% of new values while the Caravan only brings in 40%. The Caravan is pretty much on par with the F150, but the hybrid Prius is definitely beating the Civic. Since it’s not obvious if this is because of the hybrid premium of the current “green appeal” surrounding the Prius, I decided to put the hybrid Civic up head-to-head with the Civic I’ve already calculated. Here’s the results:

  • 2008 Civic Hybrid MSRP: $23,270.00
  • 2004 Civic Hybrid Suggested Retail: $16,230.00

While the normal 2004 Civic has about 75% of the value of the 2008, the hybrid model only has 69% of the value in the same comparison. Perhaps this suggests that the Prius is an outlier due to it’s iconic status and recognizability.

Buy efficient, save gas and money

The takeaway here is that if you’re looking at a fuel efficient car because of gas prices, you should also be thinking about the day you want to sell or trade-in that vehicle. Lots of people will complain that your Prius won’t save as much in gas as you’ll pay compared to other cars, but if you can sell it in 4 years for the same price you paid, you’ll end up way ahead compared to swallowing the depreciation on a less efficient vehicle.

If you liked this post, sign up for out RSS Feed for automatic updates.

Popularity: 7% [?]

{ 12 comments… read them below or add one }

1 Nicole August 26, 2008 at 3:36 am

Didn’t the RSX start at a lower MSRP than the Insight? I thought the RSX (non-s models) started around 19k, while the Insight started around 25k.

Also, the RSX is a Civic badged as an Acura, so I would assume it was keeping value similar to a Civic.

2 rewinn August 26, 2008 at 7:48 am

This should be no surprise, but it’s good to see validation.

It would be interesting to see whether consumers are figuring retained value into purchasing decisions. Savings based on MPG are no doubt more significant, but savings based on retained value should also tilt the buying decision.

Imagine: a car that APPRECIATES in value!

3 Josh August 26, 2008 at 9:07 am

To compare a Dodge Caravan with a Toyota Prius is a terrible comparison. The Caravan loses value not because it has poor fuel economy, but because it is a piece of crap and has major reliability issues after the warranty expires. A better comparison would be to compare the prius with the toyota sienna. Likewise for the F150 and Civic, compare the civic and the ridgeline.

4 SLEZE August 26, 2008 at 9:25 am

Why no mention of diesels? My TDI actually INCREASED in resale value for several months after I purchased it.

5 Fielding J. Hurst August 26, 2008 at 9:55 am

If it has wheels, it goes down in value. If these cars continue to get better each year, who would want an old one?

A four year old hybrid will be about as attractive as a 4 year old computer.

I am not saying hybrids are not a good idea, but don’t buy with resale value in mind or you may be disappointed. This technology looks to be advancing at a much faster pace in the next 4 years compared to the last 4 years and that has to be part of the equation.

FJH

6 Michael August 26, 2008 at 10:29 am

Why no mention of diesels? My TDI actually INCREASED in resale value for several months after I purchased it.

Not to mention we get better mileage. 45 mpg over the vehicle’s life time. Yes, I keep track.

http://test.watters.ws/fuelstats/

7 Chris S August 26, 2008 at 10:57 am

I agree with Josh – you’re introducing additional bias into your experiment by switching manufacturers. You should be comparing a Toyota truck to a Toyota hybrid, etc.

8 adam August 27, 2008 at 12:30 am

I used kbb,

2004 ford f150, supercab short box, 4×4, 5.4, 100000 miles, xlt package, retail price $15020

2004 ford f150, supercrew, short box, 4×4, 5.4, 100000 miles, xlt package, retail price $16245

those two trucks represent the majority of the of the f150 models on the road

9 Bored Quiz August 27, 2008 at 1:28 pm

yeah until those crazy batteries have to be replaced

10 Tony August 29, 2008 at 7:47 am

You should be comparing a Civic hybrid with a regular civic. Comparing the civic to a F150 is a poor representation. F150s are a big chunk of the US Fleet market. I would like to see the options that are placed with these comparision vehicles as well as the mileage that was calculated with them. I have several friends that have civics and the civic hybreds. the regular civics are averaging 2mpg less than the hybrid. Thats not a good selling point. Heck, my old 91 civic would get 40mpg. These comparisons are totally goofy. Plus if you keep these cars for 5 years you most likely will need to replace batteries, thus making the cost of owning one of these little monsters much higher.

Buy Diesel

11 Mauricio August 31, 2008 at 12:15 am

My 2008 civic hybrid is averaging 51MPG over all street or highway. And just the fact that it’s honda, it will keep a lot of it’s value

12 Nicole September 3, 2008 at 3:13 am

Mauricio, yes your Civic Hybrid will hold value because it is a Honda. However, will it keep a higher percentage of it’s value than a regular Civic will?

Leave a Comment

{ 11 trackbacks }