Method for estimating future depreciated value of an automobile?

I’d like to know if there’s a method for roughly estimating the depreciated value of an automobile. In the past, I’ve seen reports of “average depreciation values” for different manufacturers touted, particularly as a point of pride for companies like Toyota and Honda, whose breadwinning Civics, Corollas, Accords and Camrys have some of the lowest depreciation in the industry. They’ll often make claims that their cars are worth X percent of their value after three years, or five years, etc.

The lease on my 2005 Mazda3 is up in less than a year and I’m really keen on financing the remaining balance once the lease is up. It’s a magnificent car and I’d love to hold onto it and maintain some equity as an owner, but my curiosity led me to wonder whether I’d be taking on a note for more than the car’s depreciated value, if that makes sense. For example (I’m gonna use ballpark figures here), if the car is only worth $12,000 after three years but I owe $8,000 then I’m still in the green. If I owed more than the car’s depreciated $12,000 value at the end of the lease, I’d be upside down on the note, so to speak. What I want to know is whether that $12,000 estimate is accurate based on the historical depreciation figures for Mazda. It’s a good, reliable Japanese brand, but it’s a also a sporty brand and we all know sporty cars depreciate quicker …

I figure I could just go around looking at used Mazda3 values to extrapolate a depreciation figure, but my hope was that there might be some barometer or resource (besides simply going around and looking at current values of used Mazda3 models) for estimating the car’s future value after X amount of years. Is there one?

There is no way to predict the future. All the estimates I’ve seen, when you dig into the details, are either (a) guesses pulled out of thin air, or (b) comparing used cars prices today to their price when they were new, and assuming it’ll stay pretty much the same going forward.

The lease company has a formula which they use to calculate the “residual value” of your car upon the termination of the lease contract. They use the difference between the MSRP and the residual value (in other words, how much value the car will lose over the course of the lease term due to age & mileage) as the basis for calculating your monthly lease payment. Odds are the formula is proprietary info, however, and they’re not likely to share it with you.

But for your purposes, the formula may not be relevant. If all you want to do is know that you’re paying an appropriate price for a used 2005 Mazda 3 (which is what you’re doing with a lease buyout), simply research the value on any other 2005 Mazda 3.,,… If Mazda offers you the choice of walking away from the car at the end of the lease, or paying them $12,000 so you can keep it, all you need to know is what would someone else charge you for the same car if you bought it from a used car lot.

If Mazda offers to sell it to you for $12,000 but everyone else in town is asking $8,000 then you’ve got your answer right there.

You could go to or and punch in some deatials about the car and they’ll give you some figures.
However, the best way is to find cars similar to yours on, e-bay motors, craigslist, yahoo-autos, etc. and see what they are selling for.

Agreed, I think the pertinent question at the end of the lease is how much the lease company is offering versus how much you can sell the car for to others. One of the advantages of a lease is that if you’re in a situation where you’d be “upside down” in a normal loan, with a lease you can just return the car.

Regarding actual residual values, when you’re leasing from a lender that is affiliated with a manufacturer (NMAC - Nissan Motors Acceptance Corp., for instance), they come up a residual value that may or may not be an honest attempt to figure out how much the car will be worth at the end of the lease – more likely they are generated with an eye towards what the monthly payment will be on the lease.

However, I work for the company that owns ALG (Automotive Lease Guide) which publishes residual values for most cars. From their website:

Which of course is just them tooting their own horn. Are their residual values ‘pulled out of thin air’? According to them they use such factors as

*  Macro economic variables
* Segment assumptions
* Brand/Model assumptions
* Vehicle lifecycle adjustments
* Current resale values
* MSRP and vehicle options
* Subjective product enhancements

(again from their website). Obviously at some point guesses are made, but I guess my point is that it’s not entirely fair to say that the predicted residual value is a completely wild guess as to what a car will be worth years down the road. Although when I see our parking lot full of upcoming model year vehicles, I do kind of wonder exactly how much they can derive from test-driving the cars…or maybe they’re just in it for kicks. :slight_smile:


If you have a friendly car dealer, they DO have access to projected data on these things. They have to in order to lease used cars.
You may be able to get them to share the projected data for a single vehicle… especially if you’ve bought cars a couple of times at the same place or with the same salesman.

I think you already have good answers for the depreciation question, but as an aside, I think you’ll have trouble convincing anyone that Mazda is a “reliable” brand. Mazda generally fares poorly, much worse than the Detroit 3, on most of the reliability surveys (quickJD Powers cite), which are perhaps not perfect indicators, but indicators none the less. I frequent a few non-brand specific car forums, and the general opinion from Mazda owners seems to support this - very thin paint that easily facilitates rust, atrocious build quality for trim parts that fall off after 1 or 2 years, so-so mechanical reliability. I personally would not want to own an out of warranty Mazda unless it was dirt cheap.

I should add that the JD power results are skewed by the disproportionately unreliably RX-8. The other models are not nearly as bad, and the Miata/MX5 is generally considered the best in its class (ergo a correction: I personally would have no problem owning a Miata, but that’s it).

Correction: You will see what people are *asking * for them, not what they are *selling * for (except eBay). Even Blue Book values may be skewed, because a trade to a dealer can muddy the true value of the used car.

Mangrove: Not trying to get defensive with you or anything, but I traded my 1999 Honda Civic (of which I was the original owner) in for the Mazda because everything you described about Mazdas sounds like what happened within the first 35,000 miles of owning the Civic. Whatever cheap-as-shit steel they decided to build the Civic’s exhaust manifold from rusted and subsequently fell the fuck off the bottom of the car within three years. Trim pieces came off. The paint developed swirls very easily. The tires were lousy and easily damaged; I had to replace three of them. Most of all, it was a phenominally boring car.

My Mazda is approaching that mileage and I haven’t had a single problem. The thin paint you speak of doesn’t swirl, the tires don’t pop, interior trim is far better constructed and assembled, and the stainless steel exhaust manifold hasn’t fallen off the bottom of the car, much less corroded even slightly like the Civic’s did. Every aspect of build quality on the Mazda3 is vastly superior to anything on the Civic and I haven’t had a single reliabilty issue, and I’ve a feeling that the only reason the reliability ratings are skewed are because of their rotary-powered vehicles which are notoriously high-maintenance (but damn fun) and people buy them not realizing this, but of course, people have always been stupid like that, which is exactly why those J.D. Power surveys are for shit. People don’t think Buicks are very reliable, but they’ve been topping the Powers surveys lately in certain categories. It’s all a question of brand perception and marketing: the whole idea of Toyota and Honda topping the reliability survey lists is a marketing wash, in my opinion. My experience with both brands is proof that the surveys mean nothing and do nothing except perpetuate outdated stereotypes derived from the opinions of consumers who don’t know a tire from a windshield.

I don’t know what others are doing to their Mazdas to make them so unreliable, but then, I don’t know what others are doing to their Hondas to make them so reliable either. My experience with both brands is clearly the exact opposite of these “reliability surveys”. I wouldn’t have given my Civic a reliability rating higher than poor, and I think I’ll get a lot more residual from the Mazda than I did from the Honda after as many years.

On further note: I appreciate all the resources you guys are offering, and I apologize for cursing so much in this post but I really regret owning that Civic.

…and I apologize for sounding as if I had some kind of grudge against Mazda. I know, nothing more chickenshit than fucking with another man’s automobile, and all, but still, we are talking about resale values here, and I thought it was a data point I’d throw out there.

Do you have any idea if these predictions are ever tested against reality? That is, in 2002 they made predictions about what car x would be worth in 2007. I wonder if they now go back to see how they did, and try and revise the formula accordingly?

That’s a good question, and I did think of that, but I couldn’t find anything online (searching briefly) – I’ll ask around.