There’s a tale about a man who bought a new Alfa Romeo Spider (above) in the 1970s, who – having heard the nightmare repairs involving Italian cars – came to his senses the next day and tried to return it. The dealer just laughed and escorted him off the property. After driving around to other dealers, he realized his Alfa had depreciated 100 per cent in one day, since nobody would buy it from him at any price.
It may be an urban legend, but this is the kind of spooky story that keeps consumers up at night, at least those who know that depreciation – and not gas and insurance – is the highest cost associated with purchasing a new vehicle.
Plenty of annual lists recognize the best retained-value vehicles for your money, but many are loath to reveal the worst depreciating new vehicles – until now. It took some digging, but we found them. Of course, we stripped out the stupidly expensive vehicles – the Maybach 62 will lose almost $200,000 of value in its first year of ownership – and concentrated on vehicles Canadians actually buy. Read ’em and weep.
10. Nissan Titan
The Mississippi-built Nissan Titan turned a lot of heads when it was unveiled for 2004, mainly because the importer of the Lil’ Hustler had finally gotten around to crafting a full-size pickup that could take on the Detroit Three. It came with a 32-valve 5.6 L V8 that produced 305 horses and 379 lb.-ft. of stump-pulling torque – the lone engine choice. The permutations of cabs and bed sizes were limited, too, which probably didn’t help sales.
Add the uninspired interior, the high price, the lack of a sensible V6 option and no integrated trailer-brake controller or trailer-sway control, and the Titan had relatively few takers. Seven years later, Nissan is begging for sales with rebates of up to $10,000 on its big truck. That doesn’t bode well for future residual value. Automotive Lease Guide predicts the Titan will retain only 32 per cent of its value in three years.
9. Kia Sedona
A few years ago, Kia would have been all over a list like this. But its star is rising faster than that of any American Idol winner – save for one holdout. Kia redesigned its front-wheel-drive Sedona minivan for 2006, allowing it to grow in size, add horsepower and gain new safety equipment and features. The Sedona had all the right stuff, including a new DOHC 3.8 L V6 rated at 244 hp and 253 lb.-ft. of torque. So what’s not to like?
Early models were dogged by electrical snafus, and owners reported other problems, including broken air conditioners, prematurely worn suspension bits, poorly sealed windshields, bad fuel pumps and clunky transmissions. Not to mention it drank heavily at the gas pump. Word got around: the Sedona was not a Korean-made Toyota Sienna. Owners can watch its value plunge to 35 per cent after just three years.
8. Mercedes-Benz S600
High-end German cars hemorrhage a lot of money in the first few years of ownership. Actually, most horrendously expensive luxury cars do: new Rolls, Bentleys and Ferraris incinerate enormous wads of their owners’ money almost overnight. The V12-powered Mercedes-Benz S600 is no exception. Automotive Lease Guide predicts the range-topping Mercedes will retain only 35 per cent of its sticker price three years after purchase.
On the other hand, many people in the market for an S600 sedan probably couldn’t care one whit that the car burns cash like it does premium unleaded fuel. Not to mention reliability is less than stellar. We could steer these people into a nice Subaru – a perennial favourite in the best retained-value winners circle – but we suspect they’d rather choose the Merc’s robust exhaust note over the Subie’s flat-four flatulence. There’s no point talking sense to some people.
7. Dodge Grand Caravan
As Canada’s favourite minivan and one of the top automotive sellers of any type, Chrysler continues to flood our highways and streets with sensible and smart-looking Caravans that ferry school kids and commuters during the week, then whisk everyone and their toys to the lake on the weekend. It is the quintessential Canadian auto, one that could be immortalized on a postage stamp (Caravans originate in Windsor, Ontario, after all).
However, its downfall is the fact it’s inextricably a minivan, something buyers grudgingly accept during their child-rearing years, then trade in at the first glimpse of a fetching sport ute. And the Grand Caravan’s build quality is mediocre at best. Owners have complained about failed transmissions, air conditioners and front-end suspension components for many years, and there’s no evidence the weaknesses have been addressed in the new models. Chronic depreciation is endemic to the brand.
6. Mitsubishi Eclipse
Canada’s youngest automobile importer has made inroads, but it certainly can’t be said Mitsubishi has taken the country by storm. The wild and wooly Lancer Evo may be the maker’s halo car, but the Eclipse is Mitsubishi’s two-door sports car, offered in coupe and convertible Spyder forms, both with a choice of four-cylinder or V6 engines. Unfortunately it uses a front-wheel-drive platform, which is automotive anemia for a car with sporting intentions.
Despite the misstep, Mitsu seemingly got the rest right: a swoopy body, cool interior, lots of technology and the right palette of retina-scorching colours. Still, the boy-racer looks may have turned off the older crowd that can actually afford a sporty coupe or convertible. Among other things depreciation measures market demand for the vehicle, and the Eclipse retains just 36 per cent of its value after three years. Sports cars are a tough segment to crack, Mitsubishi.
5. Cadillac DTS
The Cadillac DTS, spiritual successor to the venerable DeVille, is a front-wheel-drive stalwart in Cadillac’s luxury sedan lineup. It is one of the last sedans of any size or origin to offer a front bench-seat that can accommodate three adults. Throw in an AM radio and plastic seat covers and you’ve got a time machine worthy of Doc Emmett Brown’s attention. But for better or worse, sedans like this one aren’t in Cadillac’s future.
GM’s luxury brand will hone its image with vehicles like the CTS coupe and SRX sport utility. The white-belt-and-matching-shoes set has precious little clout in Detroit anymore, as one of their favourite V8 sleds is being retired at the end of the 2011 model year. Automotive Lease Guide predicts the DTS will retain only 36 per cent of its value in three years. Perhaps even less.
4. Chevrolet Impala
The Chevrolet Impala has long been a fixture of taxi and police fleets, not to mention played the role of anonymous rental car at countless airport counters all over North America. Yet large fleet sales of Chevrolet’s full-size sedan has been the car’s undoing, since many consumers equate taxi duty with mundane motoring and hardly worthy of such an emotional purchase.
The front-drive Impala soldiers on, hardly changed since its last reincarnation in 2006, when it received new engines, reworked suspensions and fresh styling inside and out. Steady production is a boon to fleet buyers, who like models with interchangeable parts that don’t change too often, but consumers crave new styling and innovations. ALG suggests the ho-hum Impala will retain only 36 per cent of its value after three years.
3. Suzuki Grand Vitara
Unveiled for 2006, the Grand Vitara jettisoned its Japanese SUV styling cues and adopted a crisp design that included Suzuki’s trademark clamshell hood. The automaker had a reputation to uphold with its adoring mudders, so engineers buttressed its unibody structure with a boxed ladder-type frame to doubly ensure its rock-hopping integrity. Unlike car-based cute-utes such as Honda’s CR-V and Toyota’s RAV4, the base Suzuki spins its rear tires.
Powered by an underwhelming V6 and, more recently, a slightly less underwhelming four cylinder, the Grand Vitara is a very capable (but aging) off-roader that finds itself out-classed during the most mundane of assignments – commuting. Many consumers prefer to give the task to comfy utes like the CR-V. It’s a shame Vitara sales aren’t better. The ALG data claims the not-so-Grand Vitara will retain 39 per cent of its value in three years.
2. Saab 9-3
Dutch-owned Swedish automaker Saab is back from the dead with a familiar array of models, plus a GM-sourced sport utility that proves you can teach a new dog old tricks. There are just 13 dealers in Canada, plus three service-only centres, to serve a somewhat loyal Saab audience around these parts. The 9-3 is the automaker’s entry-level model, which has benefited from a lot of tweaks since the second generation was unwrapped in 2002.
Still, virtually a decade has passed and Saab is hawking essentially the same car, with its familiar turbo motors – which used to sludge up, but now are more susceptible to electrical problems, as well as computer and transmission failures. But mostly, the 9-3 is just old and desperately in need of replacement. For these compelling reasons, expect the Saab to retain 39 per cent of its sticker price after three years of ownership.
1. Jeep Liberty
Redesigned for the first time since its 2002 introduction, the 2008 Jeep Liberty sport-ute attempted to capture the rugged appeal of its predecessors, as well as create some distance from Jeep’s girlie Patriot and Compass models. The Liberty used a 210-hp, 3.7 L V6 with a six-speed manual or four-speed automatic transmission. Beyond the base rear-wheel-drive model, the Command-Trac and Selec-Trac II four-wheel-drive systems included low-range gearing for off-road use – like real Jeeps.
Try as it might, the Liberty doesn’t quite have the appeal of the iconic Wrangler, so it languishes on lots even while Chrysler successfully hawks the front-drive Patriot and Compass. Compounding the problem are the usual Jeep headaches of poor assembly and reliability concerns. Yeah, it’s a Jeep thing, but most consumers don’t have the patience for it. Watch retained value slide to 40 per cent of the MSRP after three years.