If there was one thing General Motors' old Saturn car company had going for it, it was its no-haggle pricing policy. You simply paid the price on the sticker, and you couldn't go across town to another dealer and try to get something better.
That was a popular policy, except it was applied to subpar cars such as the Outlook, Sky, and Vue, which all got low reliability ratings from consumer-survey outfits such as Consumer Reports. Car buyers don't like haggling, but they're willing to do it if it means they'll save money on a good quality car.
Still, car companies haven't made the car shopping experience a pleasant one. A few years ago, Ipsos Public Affairs conducted a study for used-car retailer CarMax to discover what was their greatest car-buying regret. The No. 1 decision they made that they ultimately wished they could get a mulligan on was paying too much for a car that didn't hold its value.
Other mistakes car buyers made include:
- Not doing enough research.
- Buying the wrong car.
- Buying one from an untrustworthy dealer.
- Not getting an extended warranty.
- Not reading the fine print on the contract they signed.
For certain, there are very few cars that can retain their value over the years, and every car buyer has heard the saying that a new car drops in value as soon as it's driven off of the dealer's lot.
Let your fingers do the walking
But it doesn't have to be this way. Car shoppers have a number of tools readily available to them to determine the value of a vehicle, new or used, and whether those values will hold up over time. Kelley Blue Book (KBB) and Edmunds.com may be two of the most recognized names in the industry that consumers turn to when shopping for a car, but the National Automobile Dealers Association trade group has its own "book" that used to be available exclusively to dealers, though it's since created a website consumers can peruse, too.
Recently, Kelley released its third-quarter 2016 survey on retention values for manufacturer-suggested retail prices when a car that's anywhere from one to three years old goes to auction. The results are not encouraging.
According to KBB analyst Sean Foyil, even though the cost of such vehicles has remained stable over the past few years, retention values fell by almost 5% in the third quarter, or by roughly $807. Even though the cars come loaded with better equipment packages than vehicles in the past, prices are still falling. He says this is a sign "buyers at auction are not willing to pay a premium for these vehicles due to the saturation of vehicles available in the market."
While 4% or so is the average decline in MSRP at auction, some cars performed much worse than average. Here are the five worst cars for model years 2013 to 2015 for retained value in the third quarter, as compiled by KBB.
5. Acura RDX (-14.3%)
The RDX was Acura's first compact luxury crossover SUV that showed up on dealer floors in 2006. While the vehicle has earned top ratings for safety from places such as the Insurance Institute for Highway Safety and the National Highway Traffic Safety Administration, sites such as Consumer Reports found it to be something of a mixed bag, highlighting its safety features such as lane-departure warnings, but also saying its dashboard controls are "an exercise in needless stupidity."
4. Lexus HS (-14.6%)
Another compact luxury vehicle, the Toyota (NYSE:TM)-family Lexus HS is a dedicated hybrid vehicle first introduced in the U.S. in 2009 with a goal of selling as many as 30,000 cars a year. Despite being seen as an upscale version of the Toyota Prius, it never really caught on with car buyers despite its popularity in Japan, perhaps because of its much lower highway MPG ratings than its rival. After selling about 6,700 cars in 2009 and over 10,000 the following year, in 2011 Lexus sold fewer than 3,000 of them and officially killed the car off in 2012.
3. Ford C-MAX Hybrid (-14.7%)
Ford (NYSE:F) introduced the C-Max as its first hybrid-only line of vehicles in 2003, but only to European car buyers. It wasn't until the 2013 model year that U.S. buyers had a chance to drive one. Its most notable feature was its gasoline-electric powertrain that had a 2.0-liter four-cylinder engine working in conjunction with an 88-kilowatt permanent magnet AC synchronous motor. It's gotten mixed reviews, however, with KBB and Edmunds giving it four stars, but Car & Driver giving it just three.
2. Infiniti Q60 (-14.7%)
A Nissan (NASDAQOTH:NSANY)-family vehicle, the Q60 was the successor to Infiniti G-series, but it never really caught on with buyers of high-end luxury cars. Models such as the 2013 lineup earned only three stars or so from the price-guide services, though later models did better. But it also offered upgrades to it that served to confuse people. The IPL model, for example, which stands for "Infiniti Performance Line," charged more for what seemed like very little actual or even practical increase in performance.
1. Mitsubishi Galant (-17.8%)
The granddaddy of the group, the Mitsubishi Galant was first introduced back in 1969, but much like the Lexus HS, it saw its lineage come to an end with the 2012 model year. It was originally sold in the U.S. in 1971 as a Dodge Colt and ended its existence as Mitsubishi's ninth-generation sedan built on a midsize front-wheel-drive platform. While it might not have earned stellar reviews from professional car sites, owners seemed to like it, and on Cars.com the 2012 model year actually has a 4.5-star rating.
The loss in value the Galant suffered, like the Lexus, probably has more to do with the fact the cars have been discontinued, meaning it becomes much more difficult to get parts for a vehicle. Regular service and routine maintenance may be easy enough, but when a manufacturer stops making a Saturn, Saab, or Galant, it means the time involved and expense in tracking down replacement parts is going to increase. That will serve to undermine any residual value a car may hold.
Rich Duprey has no position in any stocks mentioned. The Motley Fool owns shares of and recommends CarMax. The Motley Fool recommends General Motors. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.