The Truth About Cars » resale http://www.thetruthaboutcars.com The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. Tue, 15 Jul 2014 20:01:03 +0000 en-US hourly 1 http://wordpress.org/?v=3.9.1 The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. The Truth About Cars no The Truth About Cars editors@ttac.com editors@ttac.com (The Truth About Cars) 2006-2009 The Truth About Cars The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. The Truth About Cars » resale http://www.thetruthaboutcars.com/wp-content/themes/ttac-theme/images/logo.gif http://www.thetruthaboutcars.com Piston Slap: The Luxury Sedan Fanboi Fallacy http://www.thetruthaboutcars.com/2014/06/piston-slap-the-luxury-sedan-fanboi-fallacy/ http://www.thetruthaboutcars.com/2014/06/piston-slap-the-luxury-sedan-fanboi-fallacy/#comments Mon, 02 Jun 2014 11:58:13 +0000 http://www.thetruthaboutcars.com/?p=835145

Earl writes:

Hi Sajeev,

My wife wants me to sell our pristine, time-capsule 90 Cressida for a 4Runner (or similar) because we live in winter-world. I am looking at used 4Runners and the prices are crazy. Typically a rusted 1996-98 with 350-390,000KM will be asking $5,000 – $6,000CDN. I have seen Lexus LS with half the mileage, far better condition and all services done for that price.

What gives? Are 4Runners that good?

Sajeev answers:

Of course used 4Runners aren’t that good! Well, except they are that good for many folks.

Here’s the deal: you, much like me, have a soft spot for classic luxury (or near luxury) sedans. They are so nice, so affordable and give you so much more than any other road going machine.  And the Cressida isn’t a K-car derived New Yorker, it kinda gives the same thoroughly satisfying experience as a newer near luxury sedan. But for pennies on the dollar. An excellent value proposition that everyone should embrace!

The fallacy?  Nobody’s gonna embrace a cheap alternative to an Avalon under warranty. But everyone outside of Manhattan wants a beater truck (or truck based SUV) to carry shit, safely travel through snow, flash floods, non-KOA campgrounds, etc.  As much as my Lincoln-Mercury fanboi self enjoys the occasional compliment on my cars, I get cash offers on my 5-speed Ranger. On a regular basis: the market has spoken, son!

Is the 4Runner worth the money?  Sure, as they earned a reputation for great quality, excellent performance and even superior fit and finish. And the market reflects those opinions.  But that’s another fallacy: the quality gap at the fully depreciated level really depends more on service records. I’ll take a cherry Explorer/Blazer/Durango with a binder full of receipts over a rust bucket 4Runner with zero service history. Odds are both can be had for the same price.

If you are so frickin’ bad-ass enough to roll a choice Cressida, I don’t peg you as a lemming. The tone of your letter also proved the point. But if the sedan has to go to keep your household in balance, buy something other than a 4Runner.   Because, unless your Fanboi blood runs deep, Toyota SUVs and Trucks (especially Tacomas) can be a poor value for their premium asking price.

 

Send your queries to sajeev@thetruthaboutcars.com. Spare no details and ask for a speedy resolution if you’re in a hurry…but be realistic, and use your make/model specific forums instead of TTAC for more timely advice.

]]>
http://www.thetruthaboutcars.com/2014/06/piston-slap-the-luxury-sedan-fanboi-fallacy/feed/ 51
Piston Slap: The Re-Stocking Fee? http://www.thetruthaboutcars.com/2012/08/piston-slap-the-re-stocking-fee-2/ http://www.thetruthaboutcars.com/2012/08/piston-slap-the-re-stocking-fee-2/#comments Mon, 20 Aug 2012 11:02:50 +0000 http://www.thetruthaboutcars.com/?p=457371


Aaron writes:

Sajeev,

I currently own a 2007 WRX Wagon with a little over 100,000 miles on it. I love this car, even enough to overlook getting merely 21mpg. Anyways.
As is true with many import car owners who love too much, I started modifying the car almost as soon as I got it. It currently has a 3″ exhaust, a tune, and some miscellaneous other engine bits, with suspension components on order. The car is my current project, and I plan on keeping it for some time. There’s a slight problem though.
My problem is easy to spell: BRZ. Probably in a year or 18 months, I will give into temptation, and pull the trigger on a BRZ or FR-S (or some other cool thing that exists by then). So here’s my question (I’m getting to it, bear with me): Is it worth returning the car to stock? By the time I sell it, it will be 6 or 7 years old, and probably have north of 140,000 miles on it. The exhaust may be worth a few hundred bucks, the sway bars might be worth something, but very few other things will net any money at all. The real question is about the resale value of the car. I’d expect to get maybe 8k at best for a 140k+ mile Subaru, and that’s probably optimistic. Will the bolt-ons really push it down further?

Thanks in advance,
Aaron

Sajeev answers:

I hope there’s a good power adder for the BRZ/FR-S at that time, because you are taking a serious hit in performance from your current Subie.  I haven’t had time to rant about the new RWD wonder, but since you opened that door for me…at least I’ll be brief:

  • 2012 Subaru BRZ torque peak = 151 lb-ft @ 6000 rpm
  • 2011 Ford Ranger Duratec I-4 torque peak = 154 lb-ft @3750 rpm
  • BRZ-LSX-FTW:  think about it.

Well then! One way or another, the next owner of your WRX needs those stock parts.  They add value and show that you aren’t a stereotypical WRX hackjob type of person. You know, one of those warranty-voiding, drive line punishing type of owner.  Even if you are! But that’s not the point…

I don’t know which parts are the most valuable on the Subie forums’ classifieds section, but I’ll wager that the swaybars and the exhaust need to go up there.  If you want the next owner to have the opportunity at having them, first offer it for sale with the stock parts in the cargo area.  If that fails, return back to stock and offer the aftermarket parts for another $500-1000…or whatever sounds right to you. If that fails, sell as stock as possible and offer the bits to the forum.

Now if you’re just gonna trade this into a dealership or Carmax, forget everything I said: return it to stock. They always lower the value when they see non-stock stuff.  Perhaps you should just give the aftermarket bits to someone so you can enjoy the better karma…why let the dealership give someone else that pleasure?

 

Send your queries to sajeev@thetruthaboutcars.com. Spare no details and ask for a speedy resolution if you’re in a hurry.

]]>
http://www.thetruthaboutcars.com/2012/08/piston-slap-the-re-stocking-fee-2/feed/ 55
Piston Slap: Dumping your 9-5? 10-4 on that! http://www.thetruthaboutcars.com/2012/05/piston-slap-dumping-your-9-5-10-4-on-that/ http://www.thetruthaboutcars.com/2012/05/piston-slap-dumping-your-9-5-10-4-on-that/#comments Thu, 10 May 2012 10:45:58 +0000 http://www.thetruthaboutcars.com/?p=443656

Curt writes:

Sajeev,

I’m looking for some Saab selling advice.  A couple of years ago I convinced my girlfriend that she would love the functionality and performance of a 2002 Saab 9-5 turbo wagon (5-spd)… perhaps in some small part because I wanted one myself.  As she fell in love with the Saab I grew to hate its constant need for attention and respect its ability to find new and creative ways to fail.

Now that I convinced her to upgrade to a 2009 Jetta TDI wagon, I have to figure out how to unload the Saab.  The problem is, aside from some typical small problems, this car has an emissions leak (causing a check engine light) and needs a Direct ignition Cassette, (currently preventing full boost mode).  I’ve devoted a lot of weekends to this car so most of the gadgets work and it looks great, but I figure no one will touch it with the current problems… Because I wouldn’t.

My question: is it worth the money to invest another $200 – $300 for the DI cassette, which *should* solve the lack of boost?  And how much should I be asking/expecting on the open market?  It now has 120K miles and will be sold with the evap leak because fixing requires dropping the fuel tank and that aint gonna happen.  To make things slightly worse, we live in a town that requires emissions compliance before allowing vehicle registration, so the new owner has that to look forward to.

Oh yeah, the sooner you can weigh in on this, the better, as the new (used) Jetta is already in our garage and the Saab needs to be gone ASAP.

Thanks,
Curt

Sajeev answers:

As a Lincoln-Mercury fanboi with no brand-honest prospects in the (near?) future, it pains me to see a turbo, stick, SAAB wagon in search of a new owner. But you couldn’t pay me to own it, either. You need money, plenty of time on the forums, or a very worthwhile SAAB independent mechanic to make that beastie worth owning. Tragic.

So should you spend the money to fix that check engine light, so it will pass emissions?  Yes, unless the cost spirals out of control.  Your $300 budget sounds totally worth it, except you have no interest in fixing that leaking evap emissions thing. Therefore the light will stay on, emissions won’t be passed, value plummets. So let’s run some numbers.

Taking a wild guess at your 9-5′s options and overall condition via Edmund’s appraisal tool, I’d say you’d be lucky to get more than $4500 on a private party sale, and good luck getting over $3000 on trade-in/wholesale.  This is assuming you clear all engine codes and the rest of the SAAB is good for an inspection. And assuming you remain a resident of a fly-over state, not one of those SAAB friendly places on the coast.

The SAAB’s transaction price if you don’t clear the codes?  I donno…and maybe who cares?  At what point does a loss of 500-2000 dollars really hurt you?  Is time more valuable than money?  Are you on the fast track to a promotion, bonus, etc?  I’d recommend going to a few dealers and seeing their cash offers.  If you leave infuriated, well, maybe you should fix that heap so it will pass the emissions test for the next owner.  If you kinda shrug it off, just dump it on craigslist for a little more than the dealer’s offer…fingers crossed on that.

Perhaps you should make a friend in California? Or Oregon? Massachusetts? You see my point.

Oh and by the way, I’d sincerely recommend an extended warranty for that Jetta. But you probably already knew that.

Send your queries to sajeev@thetruthaboutcars.com. Spare no details and ask for a speedy resolution if you’re in a hurry.
]]>
http://www.thetruthaboutcars.com/2012/05/piston-slap-dumping-your-9-5-10-4-on-that/feed/ 57
Piston Slap: Relationship Advice, Accord vs. Panther Love? http://www.thetruthaboutcars.com/2011/09/piston-slap-relationship-advice-accord-vs-panther-love/ http://www.thetruthaboutcars.com/2011/09/piston-slap-relationship-advice-accord-vs-panther-love/#comments Wed, 28 Sep 2011 14:59:22 +0000 http://www.thetruthaboutcars.com/?p=412100

Click here to view the embedded video.

Scott writes:

I am a regular TTAC reader and have a question that I hope you can shed some light on. Currently my wife and I own a 2004 Accord with about 100,000 miles and in good shape and a 1993 Grand Marquis with about 90,000 miles which is also in good shape for its age – according to my mechanic we can get at least two more years with basic maintenance. I commute to work in the G. Marquis every day about 50 miles round trip and my wife put 15-20,000 miles per year on the Accord for her job (her Gas is reimbursed at 50 cents / mile).

My wife wants a new car (SUV-we’re thinking FLEX) and I would get the Accord thinking we move up in fleet reliability with more room to tote around a toddler, a large dog, and related items. The Accord has trade in value ($8,500 – $9,500 according to KBB) and the G. Marquis does not ($875-$1,100 according to KBB).

I think it makes more sense to keep the Grand Marquis as long as we can and trade in the Honda considering its value. My wife disagrees. What do you think?

Sajeev Answers:

Your wife probably hates your car. Which obviously breaks my heart.

And takes me down memory lane: years ago I told my girlfriend that I’d love her far more if she bought a new Mercury Grand Marquis (MGM) for the same price as the compacts she wanted. And since she restricted herself to USA-only brands, she wasn’t looking at the fun, refined and cheerful little shitboxes! I forced her to sit in an ice blue MGM, looking ready to knee me in the crotch. Needless to say, Panther Love foretold of a short and painful relationship that time ‘round.

So anyway…your lady needs to wake up and smell the Panther Love. If not for Love, for Money.

Panther’s are not terribly valuable on public perception alone, justified and otherwise. Their resale isn’t great in the dealer trade-in market, either. Craigslist will get you a few more bucks, but the Accord is the one for the money. And who knows, you might be one of the “lucky” folks with a grenaded Honda transaxle, especially if this is a V6 model. Not that an early 90’s MGM is the symbol of mechanical perfection, but worn valve seals (at well over 100k) and any other malady that comes from old age is probably no big thang. That’s mostly because I trust your assessment, and the word of your local wrench.

So if I can trust you, why can’t your wife? Did I just go there?

Because that’s what I would throw back at her, to see if she’s gonna play ball. I just think she wants to keep the Accord over the MGM, dollar saving be damned. Considering your next ride will be very similar to the configuration/layout of the Honda, the MGM is both a better value and a fantastic way to spice up the action in your garage. Provided your wife is more automotively-forgiving than my ex.

If that’s what you really want. Back to you, Best and Brightest.

Send your queries to sajeev@thetruthaboutcars.com . Spare no details and ask for a speedy resolution if you’re in a hurry.

]]>
http://www.thetruthaboutcars.com/2011/09/piston-slap-relationship-advice-accord-vs-panther-love/feed/ 59
Piston Slap: The Automotive Equivalent of The End Of The World? http://www.thetruthaboutcars.com/2011/06/piston-slap-the-automotive-equivalent-of-the-end-of-the-world/ http://www.thetruthaboutcars.com/2011/06/piston-slap-the-automotive-equivalent-of-the-end-of-the-world/#comments Mon, 27 Jun 2011 14:13:53 +0000 http://www.thetruthaboutcars.com/?p=400394

Steven writes:

Hi, Sajeev. I have a dilemma that I need your advice on.

I’m in a rural area of Central Ohio and have a 2000 Ford Expedition Eddie Bauer, 5.4 V8, just shy of 144,000 miles, leather, 3rd row seat, air suspension, etc., etc.. We got it to tow our livestock trailer, but now with an ’05 Chevy Silverado 2500 Crew I no longer need it (daily driver into Columbus is a ’10 Subie Forester). It’s all paid for, so no pay off issues. It’s in pretty good shape, clean, loaded to the gills as most Eddie Bauer editions are. It has some electrical glitches that no one seems to be able to fix, so when it’s parked, all the time now, I have a battery cut off switch to save the battery. The engine did blow out a spark plug awhile back but the local dealer was able to helicoil the head and it’s held up.

I want to sell it. My issue is that the tires need replaced, they’re still legal, but barely. It appears this will be about $600 or slightly more that we don’t really want to put into it unless it will help sell it for more (and faster). There is also a bad shake in the steering wheel at speeds up to about 60. This will have to be fixed (?), what the problem is and cost I don’t know (any idea?), but the air suspension is in good shape, front and rear have been fixed up by the Ford dealer’s shop. Given the price of fuel and, at best, the 14 mpg this thing gets I think the demand for a big SUV will be low, along with what I’ll be able to get for it.

Should I replace the tires and get the shake fixed or just try to have it fixed and sell it with not so good tires? Or, just keep it around for awhile and hope gasoline prices come back down and there is more demand later (yeah, I’m dreaming)?

Sajeev answers:

Bill: there is always demand for an old work/family truck. Especially one that’s loaded to Eddie Bauer levels. The question is at what price for what condition?

Selling right now for reasonable money will be tough on an Expedition, especially without putting the effort to sell in Autotrader and (preferably?) Craigslist. You could certainly dump it for pennies on the dollar, but I would take my time to recondition it: finding cheap tires on Craigslist and shopping around for the repair by local mechanics. Bide your time and wait for gas prices to go down.

Regular gas (more so than premium, if what we usually see holds true) will go down again in months, maybe sooner if the word on politics and the Strategic Petroleum Reserve is true. No matter what your political orientation, you might use this to your advantage.

As far as technical help on the shake: that comes from numerous sources in the front end. I can’t armchair that one: wheels, tires, ball joints, play in the rubber bushings…who knows? I would ask around for free estimates from multiple mechanics, or perhaps a paid ($70-90) inspection for an estimate from a trusted shop. Price the replacement parts by yourself (online, RockAuto.com for starters) and see just what exactly is involved in terms of labor hours: ask multiple shops (including the dealer) for the labor rates to replace said part.

That last bit is crucial. Homework is necessary. Nobody likes to be conned when it comes to a minor front end job that gets billed as the automotive equivalent of The End of the World!

Send your queries to sajeev@thetruthaboutcars.com. Spare no details and ask for a speedy resolution if you’re in a hurry.

]]>
http://www.thetruthaboutcars.com/2011/06/piston-slap-the-automotive-equivalent-of-the-end-of-the-world/feed/ 28
Hyundai’s Long-Term Values: Mostly Created Equal http://www.thetruthaboutcars.com/2011/05/hyundais-long-term-values-mostly-created-equal/ http://www.thetruthaboutcars.com/2011/05/hyundais-long-term-values-mostly-created-equal/#comments Tue, 03 May 2011 14:20:06 +0000 http://www.thetruthaboutcars.com/?p=393499

Hyundai’s latest Assurance marketing technique, which guarantees resale values on all 20111 model-year purchases, is already being hailed as the latest in a line of creative, zeitgeist-appropriate incentives. The one downside of guaranteeing residual values: well, people are free to draw their own conclusions from them. For example, it seems safe to say that the Azera and Accent should probably be replaced fairly soon, as their weaker resale values make them stand out from an otherwise extraordinarily consistent lineup. What’s that you say? The new Accent was announced at the same time as the resale guarantee? And an attractive new Azera replacement will be launched within a (the?) year? Er, carry on then.

In all seriousness, whenever Hyundai comes out with a new “Assurance” program, I’m sure a number of other brands look at copying elements. The genius of this latest program, however, is that it only really works if your entire lineup has been updated in a recent and consistent manner. Imagine a chart like this for certain other brands, and you’ll realize that the benefits of a strong and (possibly more importantly) consistent product line can be far reaching indeed.

]]>
http://www.thetruthaboutcars.com/2011/05/hyundais-long-term-values-mostly-created-equal/feed/ 5
Hyundai Guarantees Resale Values http://www.thetruthaboutcars.com/2011/04/hyundai-guarantees-resale-values/ http://www.thetruthaboutcars.com/2011/04/hyundai-guarantees-resale-values/#comments Wed, 20 Apr 2011 17:23:40 +0000 http://www.thetruthaboutcars.com/?p=392107

Hyundai has received a lot of attention recently for improvements in its product lineup, but as TTAC has proved, it’s actually the brand’s non-product innovations  that can be most closely tied to its recent success. Hyundai’s biggest sales growth in the US market has come on the heels of its 100k mile warranty and its Assurance buy-back program, rather than the introduction of any new car. And so, although Hyundai has revealed its new Accent (which we already showed you), the big Hyundai news coming out of New York is the brand’s latest Assurance feat: a trade-in value guarantee. The program rolls out in May, and Hyundai USA CEO John Krafcik tells the DetN that

Depreciation is a big unknown. It’s like giving one of the big benefits of leasing, but you’re still owning the car. We’re already one of the highest brands in loyalty, and we think this will help.

It certainly can’t hurt.

Zemanta Related Posts Thumbnail accent2 accent3 accent4 Hyundai accents the value... accent5 ]]>
http://www.thetruthaboutcars.com/2011/04/hyundai-guarantees-resale-values/feed/ 15
BMW Megacity EV Taking The Path Of Lease Resistance? http://www.thetruthaboutcars.com/2011/02/bmw-megacity-ev-taking-the-path-of-lease-resistance/ http://www.thetruthaboutcars.com/2011/02/bmw-megacity-ev-taking-the-path-of-lease-resistance/#comments Thu, 03 Feb 2011 17:25:55 +0000 http://www.thetruthaboutcars.com/?p=382783

As TTAC has argued before, electric cars are great… as long as you don’t have to own one. Now, even the automakers are starting to wonder if they should even bother selling the things. BMW, which has already experienced issues with consumer EV letdown, is already starting to back away from the idea of selling (rather than, say, leasing) its much-anticipated Megacity electric city car. Sales Boss Ian Robertson tells Automotive News Europe [sub]

We’re looking for an alternative to traditional purchase or leasing of a vehicle. We don’t want to sell the car, but rather the use of the car. The ‘Car to Go’ concept “is an interesting approach. More and more people in large cities are looking for an alternative to the ownership of a vehicle

Or, more accurately, BMW is looking for an alternative to trying to sell an extremely high-cost, premium EV with killer depreciation. Either way, it seems that OEMs and consumers are starting to meet in the middle on this whole EV thing…

]]>
http://www.thetruthaboutcars.com/2011/02/bmw-megacity-ev-taking-the-path-of-lease-resistance/feed/ 5
Who Ruled The Rental Fleets In 2010? http://www.thetruthaboutcars.com/2011/01/who-ruled-the-rental-fleets-in-2010/ http://www.thetruthaboutcars.com/2011/01/who-ruled-the-rental-fleets-in-2010/#comments Thu, 20 Jan 2011 21:09:19 +0000 http://www.thetruthaboutcars.com/?p=381314

One of the questions that came up in yesterday’s post, The Truth About The Ten Best-Selling Sedans Of 2010, was how to interpret a high percentage of fleet sales. After all, “fleet sales” could describe a huge variety of sales to diverse buyers at widely varying price (and profit) points. Rental fleet sales are widely seen as being far worse than other types of sales, which is why the resale value trackers at Automotive Lease Guide keep such a close eye on what they call “Rental Fleet Penetration.” In its latest newsletter, ALG notes

ALG tracks several key metrics that impact residual values and brand health. Of these metrics, rental fleet penetration (RFP), which ALG measures as the total number of vehicles sold into rental fleet channels divided by total sales, has been found to have an impact on both residual performance and perception of quality… As a general rule, ALG recommends RFP levels below 10% for Mainstream brands and <5% for Luxury brands to avoid any negative impact from rental fleet sales on residual performance.

The Chrysler brand, which has had a history of high rental fleet levels in the past several years, showed the highest increase in RFP to ~49% in 2010YTD compared to ~19% in 2009YTD. Dodge and Jeep, also operating under the Chrysler umbrella, showed high YOY increases in RFP with levels at 32% and 18% for 2010YTD, respectively. Though industry retail sales showed improvement in 2010YTD, the Chrysler, Dodge and Jeep brands all suffered declines in retail sales compared to 2009YTD. While the decline in sales has a positive impact on residual values due to the drop in used supply, the increase in rental fleet penetration will negate much of the used supply impact on residual values due to the decline in perceived quality and residual performance relative to the competitors.

Chevrolet also displayed high increases in RFP levels to ~26% for 2010YTD compared to ~13% in 2009YTD. Retail sales for the Chevrolet brand also increased, resulting in increased used supply for the brand which would negatively impact residual performance, holding all else constant. Mercury rounded out the mainstream brands that experienced the largest increases in RFP levels.

But that’s hardly the whole story…

ALG has found that rental fleet sales have an even more detrimental effect on residual values and perceived quality for luxury brands compared to mainstream brands. Cadillac showed the highest YOY increase in RFP from ~9% in 2009YTD to ~17% for 2010YTD. Though rental fleet sales showed a significant increase compared to the Luxury brand average, Cadillac has shown improvements in other metrics. Retail sales grew by 34% in 2010 compared to 2009 (July YTD), while incentives decreased. While this is a positive story for Cadillac, the increase in rental fleet penetration will place the brand at a disadvantage compared to other luxury brands that have kept rental fleet below the 5% mark.

The other brands in the luxury list all had fairly small changes to RFP levels and averaged <5% for both 2009 and 2010YTD. Both the mainstream and luxury domestic brands have shown higher rental fleet trends versus their import counterparts.

]]>
http://www.thetruthaboutcars.com/2011/01/who-ruled-the-rental-fleets-in-2010/feed/ 30
EVs Are Great, Just Don’t Buy The Battery Part Two: 50 Percent Depreciation In Three Years http://www.thetruthaboutcars.com/2010/08/evs-are-great-just-dont-buy-the-battery-part-two/ http://www.thetruthaboutcars.com/2010/08/evs-are-great-just-dont-buy-the-battery-part-two/#comments Tue, 31 Aug 2010 19:08:42 +0000 http://www.thetruthaboutcars.com/?p=364326 With the Mitsubishi i-miev electric car about to hit the British market, the BBC decided to break down the Pounds and tuppence behind the EV hype. And though it found that the i-miev comes out looking quite well thanks to Britain’s EV consumer subsidy, its freedom from congestion charges and road tax, fuel price differences and estimated servicing costs, it has one eye-popping cost associated with it: nearly 50 percent depreciation over the first three years. And that’s what Mitsubishi is willing to cop to. So not only will your new i-miev cost about twice as much as a little Fiat 500, it will lose about enough value after three years to have paid for that same Cinquecento. Needless to say, as American consumers begin their own first flirtations with the electric automobile, we will continue to keep a close eye on this issue.

]]>
http://www.thetruthaboutcars.com/2010/08/evs-are-great-just-dont-buy-the-battery-part-two/feed/ 22
EVs Are Great, Just Don’t Buy The Battery http://www.thetruthaboutcars.com/2010/06/evs-are-great-just-dont-buy-the-battery/ http://www.thetruthaboutcars.com/2010/06/evs-are-great-just-dont-buy-the-battery/#comments Tue, 22 Jun 2010 18:40:56 +0000 http://www.thetruthaboutcars.com/?p=359319

After one year of ownership we would expect EV residual values to be above the segment average expressed in terms of pound values. But, if the battery is owned rather than leased, and lacks the appropriate extended warranty, the value of the typical EV will then fall dramatically until the vehicle is five years old, at which point the car will have a trade value little more than 10 per cent of the list price

So says Andy Carroll, managing director of the British car-buying bible, Glass’s Guide. He tells BusinessCar that Nissan and other firms launching EVs in Britain should take out the battery cost and lease it to customers with minimum monthly performance clauses. This, he says, would dispel concerns, drive sales, and transform the resale picture. It’s also what Project Better Place is doing, albeit in a complete regional package with battery-swap stations and charging infrastructure.

OEMs should take notice: almost everyone has had a bunk battery in a cell phone or laptop at one point or another. And losing performance or range in a car is a lot different than having to plug in your phone every 12 hours. Besides, BMW got 450 people to pay $850 per month for MINI E “test” leases (and yes, their range went down in the cold). When the earlier adopters will pay enough each month to lease a CRV, Odyssey, Insight and Fit only for an electric MINI with less room (sorry mate, need room for the batteries), why not keep leasing? The luxury market runs on leases, why wouldn’t the EV market?

]]>
http://www.thetruthaboutcars.com/2010/06/evs-are-great-just-dont-buy-the-battery/feed/ 13
Detroit Tops May Incentives, Residuals Rise Regardless http://www.thetruthaboutcars.com/2010/06/detroit-tops-may-incentives-residuals-rise-regardless/ http://www.thetruthaboutcars.com/2010/06/detroit-tops-may-incentives-residuals-rise-regardless/#comments Mon, 07 Jun 2010 14:17:41 +0000 http://www.thetruthaboutcars.com/?p=358363

Once again Detroit finds itself atop Edmunds’ True Cost of Incentive ranking of the top seven automakers [via earthtimes], as the domestic OEMs spent about $1.7b (or, about 60 percent) of the $2.8b paid out by the entire industry on incentives last month. Trucks were the most heavily discounted segment, with average incentives running around $4,650, or nearly 13 percent of the average segment sticker price. Saab spent the most by brand, slapping an average of $6,813 on its vehicles, with Lincoln coming in second at $4,987 per vehicle sold. Saab’s incentives equaled 17.1 percent of its average vehicle price, while Chrysler gave away about 12.2 percent of its average vehicle price last month.

Despite giving away more of their vehicles’ value than the foreign competition, Detroit has some surprisingly good news on the resale value front. Well, Ford and GM, anyway, and really, the resale news couldn’t have been much worse. According to Automotive News [sub]:

Automotive Lease Guide projects that 2010 vehicles from continuing GM brands and 2010 Ford brand cars will retain more than 40 percent of their sticker prices after 36 months. Five years ago, the residual forecasts for those brands’ cars except Cadillac were under 40 percent.

So, considering that Toyota and Honda enjoy about 51 and 54 percent of their original value after 36 months respectively, that’s not exactly break-out-the-champagne news… but it could have been worse. It could have been Chrysler:

Chrysler brand 2010 vehicles, in aggregate, have the industry’s lowest projected residual among continuing brands at 39.4 percent after 36 months, 2.1 percentage points lower than its 2005 projection. But the aggregate residual value for Chrysler Group’s Dodge brand is up a dramatic 8.2 percentage points to 41.8 percent. This does not include Ram brand trucks.

Ay Caramba! Needless to say, both Ford and GM’s resale value improvement (and Chrysler’s lack thereof) is largely attributed to new product. According to ALG’s chief economist:

All new models always have a price bump. The average is a 7 or 8 percentage-point bump for an all-new model compared with the old one

Lower inventories aren’t hurting either, and Edmunds is projecting that late-summer incentives won’t reach their typically fire-sale-like levels because automakers simply don’t have the inventories to shift. But as Detroit makes a slow comeback on resale, other firms are charging ahead. And until incentive discipline on the ground matches the tough talk of sales and marketing execs, these minor gains based on product cadence won’t be enough to keep up with the competition. After all, the three-year resale on a Chevy car is only .10 percent better than a Kia. The work is not over.

]]>
http://www.thetruthaboutcars.com/2010/06/detroit-tops-may-incentives-residuals-rise-regardless/feed/ 15
KBB Resale Values: Japanese Lead, Americans Gaining http://www.thetruthaboutcars.com/2009/12/kbb-resale-values-japanese-lead-americans-gaining/ http://www.thetruthaboutcars.com/2009/12/kbb-resale-values-japanese-lead-americans-gaining/#comments Thu, 03 Dec 2009 18:57:03 +0000 http://www.thetruthaboutcars.com/?p=337987 Room for improvement...

Kelley Blue Book has released its annual resale value data, and according to the WSJ, Toyota, Honda and BMW remain the top brands in five-year residual value. Still, Toyota’s average residual value dropped from 42.7 percent to 38.8 percent, while Honda fell from 44.5 percent to 38 percent. Those drops mirror an industry-wide decline in residual values, which had hovered around 35 percent for some time, but have fallen to about 32.6 percent for 2010 models. But American brands have bucked that trend:

KBB estimates Ford’s 2010 models will keep 32.4% of their value after five years. That’s an improvement—for 2009, KBB put the residual value of Ford’s models at 31.7%. Likewise, GM’s 2010 five-year residual value is 31.3%, up from 29.5% a year earlier. Chrysler’s figures are 29.5% for 2010 models, compared with 29% for 2009 models.

KBB’s top ten models for five-year residual value after the jump.

  • MINI Cooper Clubman
  • MINI Cooper
  • Honda CR-V
  • Toyota RAV4
  • *Toyota Tacoma
  • *Toyota Prius
  • *Chevrolet Camaro SS
  • BMW M3
  • Chevrolet Corvette
  • Audi A5

* denotes tie

]]>
http://www.thetruthaboutcars.com/2009/12/kbb-resale-values-japanese-lead-americans-gaining/feed/ 12