Spend more for the cutting edge of luxury and style, and you could wind up taking a larger whack than most when it's time to trade in that sled. The National Automobile Dealers Association (NADA) is reporting that premium luxury vehicles actually have the highest annual depreciation rate. The reason for the stone-dropping value is that luxury car buyers tend to want the latest and greatest. The preference for the next big thing leads to owners turning in their current cars faster than people who will drive a Taurus until its wheels fall off. Manufacturers also keep rolling out new versions of their top-tier cars to keep these customers coming back for more, which also takes a bite out of resale value since the next iteration is often right around the corner. Those cars that don't get refreshed as quickly end up with heavier incentives to maintain their sales volume in between refreshenings. In the end, it's a win-win for everybody. Automakers continue to move iron, early adopters beta test the products for the rest of us, and if you're willing to be a little bit behind the curve, you can pick up a three-year-old car for a small potatoes and still feel like you're living large.
Topping the list of annual value-losers is Jaguar's XJ8, which drops 25 percent in just a year. Mercedes-Benz, Audi, Lexus and Volvo also make appearances in NADA's top ten list of dubious distinction. The luxury cars are kept company by such ignominious vehicles as the Suzuki Verona, Hyundai Accent and Kia Rio. Judging from those rankings, it looks like the top and bottom extremes lose their value the fastest. If you're in the market for a Joneses-pleasing marque, this is good news.
