Car Options: Which Ones Are Worth the Investment?
The most economical thing a car buyer can do is purchase a car and keep it forever — or at least until long after it's paid off. Cars aren't good investments because they depreciate, and only in the rarest of cases do they survive long enough — and remain desirable enough — to appreciate again as collectibles. That said, one bad investment can be worse than another, and you'll want to outfit your car with features that raise its value if you decide to sell it.
According to ALG, a company that predicts a new car's value over the years to come, practically any non-standard feature you add as an option to a new car will improve its resale value. The average 5-year-old car is worth a mere 28.5 percent of its original value. Based on that figure, a few features may not ultimately be worth the extra cash at purchase.
Highest Returns (60-100+ percent value)
The high residual value reflects the fact that used-car buyers value cruise control highly. Standard cruise control has become more common over the years, so any car without the feature seems outdated. Thanks to recent changes in technology, cruise control is unlikely to fail for the life of the car, so it's all upside.
Power windows: 110 percent
Manual-crank windows are so rare nowadays that they're difficult to find, often offered only on the lowest trim level of the most affordable cars, so this figure, though impressive, is increasingly irrelevant. The benefits now outweigh concerns about potential repair costs.
Power locks: 113 percent
Like other highly rated features, power locks have become the norm in new models, so any car lacking them will seem less competitive with each passing year.
Air conditioning: 95.0 percent
The value of any option depends in part on how much the owner wants or needs it, and how easily one can substitute for it. There's no substitute for air conditioning, which explains its slow depreciation. (Interesting aside: Over the years, automakers have been adding zones to their ventilation systems that allow two front occupants to select different temperatures. Now backseat passengers sometimes get a zone of their own — not only vents but fans and/or temperature controls. The average rear air conditioning option should retain a full 76.6 percent of its value.)
Power seats: 80.0 percent
Power seats hold their value well, in part because they make a car easier for two drivers to share. In some cases, they have memory settings that allow spouses to customize at the touch of a button.
Automatic transmission: 78.0 percent
Automatic transmissions are overwhelmingly standard equipment, but in cars that come with a stick, the automatic option raises the resale value substantially.
Convenience Pays Off (40-60 percent value)
Whether it's a new or used car, convenience features make it more attractive to buyers.
CD changer: 58.5 percent
As noted below, premium audio systems depreciate almost as much as the average car does, but multiple-CD changers are projected to hold their value well. With the proliferation of MP3 jacks, we suspect this projection is optimistic.
Antilock brakes: 58.0 percent
Antilock brakes are expected to depreciate quickly for a safety feature, especially since ABS will be required as standard equipment on all new cars in 2012 as part of federally mandated electronic stability systems.
Although leather upholstery sometimes ages poorly, at five years the option should remain an asset relative to the car's depreciation.
For years now, integrated navigation systems have depreciated faster than their cars. Even if an owner or buyer bothers to update to current map discs, the speed and quality of the very expensive navigation hardware itself quickly becomes outdated, and you're stuck with it. Stiff competition now comes from portable units that aren't as well-integrated but are affordable and transferrable from one car to another. Now that backup cameras — formerly available only with nav — are becoming stand-alone options, navigation for navigation's sake isn't the best investment.
Tilt steering: 50.0 percent
Tilt steering broadens the appeal of any used car because it helps accommodate drivers of different sizes. As the feature is increasingly included as standard equipment, cars without it will seem out of date.
Premium stereo: 48.0 percent
Although a multi-CD changer holds its value much better than the average car, a premium stereo system will depreciate almost as quickly as the average car. The value of a premium stereo varies from person to person, and it's not as clear an advantage five years later, when there's no standard stereo to compare it against.
Moonroof: 44.0 percent
Many, years ago, when they were added after the fact, sunroofs were a liability because they tended to leak and/or break down after a few years. Now that they're factory-installed, optional glass moonroofs age more gracefully and hold their value better than the average car does.
Rear entertainment system: 42.0 percent
On average, rear entertainment systems depreciate slightly faster than the minivans and SUVs that tend to host them. Though they're relatively modern features that make older cars seem more current, technology changes quickly enough that today's formats might be out of favor five years from now. Currently, a DVD player in a used car is a plus. In five years, DVDs may even be passť.
On the Borderline (30-40 percent value)
The percentages displayed are averages, so in some cases a feature that's on the cusp might depreciate faster or slower than the model in question.
In models that offer upgrades from, say, four to six cylinders or six to eight cylinders, the increase in power depreciates more slowly than the average car does.
An optional third-row seat is expected to boost value at least a little compared to the average SUV. If you're on the fence about adding it, there's no downside in terms of resale.
The Great Depreciator (0-30 percent value)
Averaged for all makes and models, options that depreciate faster than the car itself are few:
Sport packages: 16.5 percent (based on BMW models)
The BMW example is reflective of sport upgrades in general. The value depends on the driver: One buyer's sporty handling is another's rough ride. Option packages in general are hard to value. Taken independently, the features listed above depreciate more slowly than the average car, but a Convenience Package, for example, means something different from one model to the next, and what it means becomes even blurrier five years down the line.