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Nissan Versa, Toyota Yaris, Honda Fit, smart fortwo, MINI Cooper
#8711 of 9848 there go your residuals....
Dec 15, 2009 (6:23 pm)
Forecast: Small-car flood to swamp residuals
December 14, 2009 - 12:01 am ET
If you want a vehicle that will hold its value, buy a big SUV rather than a small car, the experts at Kelley Blue Book say.
Automakers, under pressure to meet tighter fuel economy rules, are about to flood the market with so many small, fuel-efficient vehicles that the residuals of those vehicles will fall, predicts Eric Ibara, director of residual consulting for Kelley Blue Book.
Gasoline prices are expected to stabilize below $3.50 a gallon for the next three to five years, also lessening demand for fuel-efficient vehicles, Ibara says.
Kelley projects lower 2010 residual values for brands such as Honda, Toyota and Volkswagen than it did in 2009 because their lines include many small, fuel-efficient vehicles.
....Honda was Kelley Blue Book's No. 1 brand in its 2009 residual-value analysis with a projected residual of 44.5 percent after five years. But in Kelley's projections for 2010, Honda's projected residuals shed 6.5 percentage points, and the brand dipped to No. 3.
Poor old Honda.
So what about the "flood"of crappy pick-ups that are on the market right now? Why aren't their residuals impacted? The top two sellers even in this lousy market are still the F-150 and the Silverado/Sierra twins.
I don't know about those gas price predictions either. Gas never went below $2.90 in my area this year, even now in the low season and with oil down $10/bbl since summer. I laugh when I see those TV ads boasting that the Hemi in the Ram makes 20 mpg highway. What a joke (and not a good one).
But I will be surprised if Honda's residuals stay out of the #1 spot for very long. It IS true that for non-premium subcompacts, residual value isn't very good. Aveo and Yaris values drop like a rock.....
#8712 of 9848 Re: there go your residuals.... [nippononly]
Dec 16, 2009 (2:26 am)
Forecast: Small-car flood to swamp residuals
Sounds like an attempt at second-line/vested interest marketing for SUV's, but maybe that's just me being cynical. We've had small, efficient(ish) cars here in Europe for years but they still hold value better than the big stuff; which is usually bought by companies, against tax, written down over 3 years and sold into the used-car market where they make brilliant buys for those wanting that sort of thing "on the cheap".
Once had a conversation with a colleague about this subject. I'd just changed my Skoda Fabia and he was changing his BMW 540i. His side of the debate went as follows :
"See, your little Skoda depreciated by just over 30% whilst my big Beemer only dropped by 25%. Ergo, my BMW was a better buy, financially". Invited him to do the most basic math; Skoda dropped 30% of £11k and his big BMW dropped 25% of £35k.........plus the difference in 3 years running costs of 1.9TDi vs 4.0 V8 gasser. His response ?
"Well, my BMW was a much nicer car than you crappy little Skoda".
Hard to argue with that sort of logic.
#8713 of 9848 Re: there go your residuals.... [alltorque]
Dec 16, 2009 (6:01 am)
The market will balance itself out.
If residuals fall and used ones become cheap, fewer people buy new, and automakers reduce supply of new compacts.
Then the used values will go back up again.
#8714 of 9848 Re: there go your residuals.... [nippononly]
Dec 16, 2009 (9:54 am)
I HOPE all of that is true. I've been surfing the classifieds for a few months now looking for a small car and I've been finding them incredibly overpriced compared to, say, a year ago.
#8715 of 9848 Re: there go your residuals.... [qbrozen]
Dec 16, 2009 (4:40 pm)
Yeah, I see the same thing on used subcompacts...dealers seem to think its summer 2008 with their asking prices. Private party is not much better.
Nippon, I'm in the Bay Area now too, but I haven't seen the Yaris values drop a lot here. As for the Aveo, well, 'value' is a realtive term, right?
#8716 of 9848 Re: Geo Metros [steve_]
Dec 16, 2009 (5:41 pm)
was there some kind of reporting about him? i seem to remember a story about someone who did the same thing during the gas prices spike.
#8717 of 9848 Re: there go your residuals.... [tifighter]
Dec 16, 2009 (6:01 pm)
I decided to make a few random comparisons using my Galves book. Here are some interesting numbers I've noticed:
an '04 Mazda3s has the same value as an '04 RX8 and '04 Mazda6s. Same thing with VW; an '04 Jetta GL is the same as an '04 Passat GL. Focus and Taurus are also the same. And an '04 Saturn Ion is actually work a few hundred more than an '04 L300.
#8718 of 9848 Re: there go your residuals.... [tifighter]
Dec 16, 2009 (6:10 pm)
Yarises don't seem to be particularly cheap in my neck of the woods. I just searched the inventory at my local Fitzmall, which is where I did a lot of hunting when I was looking for a car, and the cheapest Yaris they had was this $9585 2007 sedan with 55,700 miles on it. It has a manual tranny and crank windows, and I guess is about as strippo as you can make a Yaris. I'm guessing a/c is standard on them.
That just seems like a lot of money to me, for a 3 year old stripper economy car with 55K on it! For about $2400 more, they have this 2008 S model, with 16000 fewer miles. That extra price also gets you alloy wheels, automatic, power windows/locks, and cruise. But that's still a $12K car, and just seems like an awful lot of money for what it is. But, I imagine they're pricing them like this because there's a market for them!
#8719 of 9848 Re: there go your residuals.... [andre1969]
Dec 16, 2009 (6:47 pm)
Yeah, terrible value. I'm also seeing ex-rental '08 Elantras fully equipped, even moonroof, for $9800ish. Sonatas too, if you want to go big. Makes a used Yaris, or a Versa seem like a poor choice, and I like the Yaris.
#8720 of 9848 Re: Geo Metros [explorerx4]
by Stever@Edmunds HOST
Dec 16, 2009 (6:50 pm)
I remember some reports about people fixing up Metros (and Justys iirc) and selling them for crazy money. She didn't say anything about her dad getting in the paper though.