Resale value

I keep car until they have no value so I'm not affected as much (if at all) as the frequent trader.

Residual Value Another factor that can or should be an indicator of a turkey is residual value. John Blair, CEO of Automotive Leasing Guide, which provides depreciation estimates for use in the automotive financing industry, says that residual value is commonly associated with leases--as a higher residual value typically translates to a lower monthly payment--but it's actually more important to those who buy.

That's because leases are for a set term at a monthly payment that's set by the bank, "but buy the car and you're stuck with it," says Blair. "It can be quite different when you're comparing a Honda to a Hyundai."

For instance, Blair says that ALG's three-year residual on a Honda Accord is about 55%--meaning that it is estimated to be worth about 55% of its original value after three years--while for a Hyundai Sonata, it's only 40%, which translates to a difference in value of $3,750 over those three years on a sticker price of $25,000. Although Blair added that, generally speaking, vehicles with lower residuals have lower appeal and often have automaker incentives that apply to the purchase price, making up for some of that difference.

What's more, the difference between vehicles can be even more pronounced than this example. On ALG's five-star ratings system, with five-star vehicles having the best depreciation ratings, the Accord has a four-star rating, while the Sonata has two stars.