Dave writes:

Sajeev,
I’m a sales rep for a corporate auto supplier in the Detroit area. I currently drive a 2008 Dodge Magnum SXT that I put around 5000 kms per month and currently has 165000kms. Bought it as a lease back with 30000kms in 2009 and it’s completely paid off.

My question is – Do I drive the Magnum for another year, putting the mileage up over 200000 and far reduce the residual value or do I trade it in on a low mileage Explorer, Flex, or Durango and start the process over again getting more cash value for the Mag. There’s no real reason to dump the Magnum – It’s in fantastic shape and aside from regular maintenance and some front end suspension work, hasn’t emptied my pockets.

Just looking for another point of view and some insight into what the residual value over time and mileage looks like for the situation.

Thanks,
Dave (Read More…)

We have no wish to dampen enthusiasm for any new development in the light commercial vehicles sector but at this point the prospects for all-electric vans are fraught with difficulties, despite the clear operating advantages of using one for specific kinds of work

The Commercial Vehicle Monitor editor for the British residual value gurus at CAP, Tim Cattlin, tells Honest John that the new electric Azure Transit Connect has a few issues that fleet managers may want to look at before buying Britain’s first electric van. To wit:

The £39,999 van is expected to have a value of £8,000 after three years and 30,000 miles, with CAP explaining that uncertainty over the unproven technology and expensive batteries are the biggest issues.

That’s a 20% residual value after three years of driving 10,000 miles per year. Yikes! (Incidentally, if you drove the Transit for its entire 80 mile range every day for a year, you’d rack up about 30k miles in that year alone). The Azure Transit Connect is reportedly available in the US for $57,400, although Ford doesn’t list a price on its website and production is said to only be about 600-700 units this year. Meanwhile, Ford had better hope that the residual value issues aren’t linked to Azure’s technology (which uses Johnson Controls batteries), because it’s just announced a plug-in hybrid Super Duty Chassis Cab for 2013… with Azure as a partner and fleet businesses in mind. Better take a look at those projected residuals first, guys…

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.

(Read More…)