What Car Should I Buy? 5 Tips for Choosing a Car That Holds Its Worth

By the Mercury Team

It’s exciting to think about hitting the open road in a new ride, but with so many options out there, it’s hard to know where to start. Beyond just finding a car you love to drive, it’s also smart to think about its long-term value. Choosing a car that holds its value can save you serious money down the line, whether you’re planning to resell it in a few years or trade it in for something new. In the blog, we’ll share five car-buying tips to help you find a vehicle that holds its value but also fits your lifestyle and budget.

How to Choose a Car That’s Right for You

Buying a car is a big decision, and the right vehicle should fit your lifestyle, work within your budget, and make sense financially in the long run. Here’s what you need to think about before you sign on the dotted line:

• Lifestyle: Consider how you’ll use the car. Daily commuters should prioritize fuel efficiency with options like the Toyota Corolla or Honda Civic. Families might prefer spacious SUVs like the Honda Pilot or Toyota Highlander, while outdoor enthusiasts may need the towing capacity of a Ford F-150 or the versatility of a Subaru Outback.
• Budget: Think beyond the sticker price. Set a clear budget that factors in monthly payments, insurance costs, and fuel expenses. Electric vehicles, like the Nissan Leaf, may have higher upfront costs but can save you money on fuel and maintenance in the long run.
• Long-term costs: Research reliability and maintenance expenses for the models you’re considering. For example, brands like Toyota and Honda are known for their durability and low repair costs.
• Safety ratings: Cars with strong safety ratings provide peace of mind but can also lower your auto insurance costs. Look for crash-test scores from the National Highway Traffic Safety Administration (NHTSA) or the Insurance Institute for Highway Safety (IIHS) and features like adaptive cruise control, lane-keeping assist, and automatic emergency braking.

5 Key Tips for Choosing a Car That Holds Its Value

One of the best ways to choose a car is to focus on models that hold their value over time. Every car depreciates, but some lose their value much slower than others. This can make a huge difference when it’s time to sell or trade in your car, potentially saving you thousands in the long run. Here are five tips to help you choose a car that keeps its worth:

1. Research Cars That Hold Their Value Well

According to the most recent data from Kelley Blue Book, these vehicles offer significant resale value:

• 2024 Ford Bronco
• 2024 Toyota Tacoma
• 2024 Mercedes-Benz G-Class
• 2024 Toyota Tundra
• 2024 Chevrolet Corvette
• 2024 Subaru Crosstrek
• 2024 Toyota Prius
• 2024 Toyota 4Runner
• 2024 Porsche 718 Cayman
• 2024 Honda Civic

Not all cars lose value at the same pace. Automakers like Toyota, Honda, and Subaru are known for building reliable, long-lasting vehicles, so these brands tend to retain more value over time. Generally, luxury vehicles and electric cars (with the exception of Tesla models) tend to depreciate faster. Luxury brands usually have higher maintenance costs, and EV technology is advancing so quickly that older models lose appeal. On the other hand, trucks and SUVs typically retain value better due to their versatility and strong demand.

2. Choose the Right Car Type Based on Your Needs

When you ask yourself, “What vehicle should I buy?” choose one that aligns with your daily needs and lifestyle. Sedans, SUVs, trucks, and even electric vehicles all serve different purposes, and finding the right fit can save you money on fuel, maintenance, and insurance in the long run.

• Sedans: Sedans are a great option If you’re commuting daily or just need a reliable car for errands. They’re affordable, easy to drive, and get great gas mileage. Cars like the Honda Accord or Toyota Camry are budget-friendly to maintain and insure, making them perfect for anyone looking for a practical, no-fuss vehicle.
• SUVs: For families, adventurers, or anyone who needs more space, SUVs are the way to go. Compact SUVs like the Toyota RAV4 or Subaru Forester are versatile and fuel-efficient, while larger models like the Ford Explorer are ideal if you need extra seating or towing capacity. They’re great for road trips, hauling gear, or managing everyday family life, though they may cost a little more to fuel and insure.
• Trucks: Trucks are your best bet if you need power and utility. Whether you’re towing a trailer, hauling supplies, or tackling tough terrain, models like the Ford F-150 or Toyota Tacoma are built to handle it all. They’re not the most fuel-efficient, but if you need a hardworking vehicle for work or outdoor activities, trucks are hard to beat.
• Electric vehicles (EVs): If you’re eco-conscious or want to save on gas, EVs are worth considering. Cars like the Tesla Model 3 or Chevy Bolt have low maintenance costs and may even come with tax breaks. That said, EVs work best for people who can charge at home or have access to charging stations and are willing to pay the higher upfront costs.

3. Understand the Total Cost of Ownership

When buying a car, it’s important to look beyond the sticker price and consider the total cost of ownership, which includes:

• Insurance: The type of car you buy plays a big role in how much you’ll pay for insurance. Cars with strong safety ratings and lower repair costs usually come with lower premiums. For instance, sedans like the Toyota Corolla or Honda Accord are often cheaper to insure compared to larger SUVs or luxury vehicles.
• Maintenance: All cars need maintenance, but the costs can vary depending on the type of car you drive. Brands like Toyota and Honda are known for their reliability and lower repair costs, while luxury cars like BMW or Mercedes can be pricey to fix. EVs, on the other hand, tend to have significantly lower maintenance costs because they don’t require oil changes or have as many moving parts as gas-powered cars.
• Fuel efficiency: Gas prices can make or break your budget, especially if you’re driving a gas-guzzling truck or SUV. Sedans tend to get much better mileage, saving you money at the pump. If you want to take it a step further, hybrid and electric vehicles (EVs) like the Tesla Model 3 or Nissan Leaf can cut fuel costs greatly. Just make sure you have access to charging options if you go electric.

4. Decide Between New, Used, or Certified Pre-Owned Cars

When buying a car, one of the biggest decisions you’ll face is whether to go for a new or used vehicle. Each option has its pros and cons, and the right choice depends on your budget, priorities, and long-term goals.

Here are the pros and cons of buying a new car:

• Warranty coverage: New cars typically come with comprehensive manufacturer warranties that can cover repairs and maintenance for several years.
• Latest technology: You’ll get the most up-to-date safety features, tech, and fuel-efficient engines.
• Reliability: There may not be many issues early on since the car hasn’t been driven or received wear and tear.

• Higher cost: New cars are more expensive upfront and lose value quickly, depreciating by as much as 20% in the first year.
• Higher insurance premiums: Since new cars are worth more, insurance costs are typically higher.

Here are the pros and cons of buying a used car:

• Lower cost: Used cars are usually cheaper than new ones, making them a great choice for budget-conscious buyers.
• Slower depreciation: Much of the depreciation has already occurred, meaning you’ll lose less value over time.
• Lower insurance costs: Since the car’s value is lower, your insurance premiums will likely be cheaper.

• Higher maintenance risks: Depending on the car’s condition and mileage, used cars may require more frequent repairs.
• No warranty: Unless it’s a certified pre-owned vehicle, used cars generally don’t come with a warranty.

If you’re unsure about your decision between new and used cars, certified-preowned (CPO) cars offer a great middle ground. They’re inspected and refurbished by the manufacturer or dealer to ensure they meet strict quality standards, and they usually come with a limited warranty for added peace of mind. While CPO cars are more expensive than standard used cars, they’re still more affordable than buying new ones.

You’ll also want to think about whether you want to lease or finance your car. With financing, you’ll eventually own the car outright. This is a better long-term option, especially for used or CPO cars, since you’ll avoid long-term depreciation losses. On the flip side, leasing is appealing if you want lower monthly payments and the ability to drive a new car every few years. However, leasing comes with mileage restrictions and you don’t own the car at the end of the lease.

5. Factor in Auto Insurance Costs Before Buying

Factoring in auto insurance costs before buying a car is a smart way to manage your long-term expenses. Cars with high safety ratings, affordable repair costs, and anti-theft features are usually cheaper to insure, and choosing a vehicle with these attributes can help keep your premiums low. For example, a Toyota Corolla or Honda Civic will generally cost less to insure than a luxury SUV or sports car because they’re safer and cheaper to repair.

Choosing a car with low insurance costs can also save you money over time. Vehicles with advanced safety features like automatic braking or lane-keeping assist often qualify for auto insurance discounts, which helps reduce your overall ownership expenses. Additionally, bundling your auto policy with home or renters insurance, keeping a clean driving record, or driving fewer miles can also help lower your premiums.

Final Thoughts on Buying a Car That Holds Its Value

Whenever you’re in the market for a new vehicle, focus on finding a car that holds its value, fits your needs, and makes sense for your budget in the long run. Think about things like resale value, total ownership costs (like maintenance and fuel), and how much you’ll pay for insurance. A little extra research now can save you a ton of money down the road!

And when it comes to insurance, Mercury offers cheap auto insurance options to help keep your costs low, so you can spend more time enjoying your new car and less time worrying about your budget.

Contact us today for a fast, free quote!