Last post on Oct 05, 2011 at 7:37 PM
You are in the Ford Taurus/Mercury Sable
What is this discussion about?
Ford Taurus, Automotive News, Future Vehicle, Sedan
#312 of 493 Re: Taurus resale [gregg_vw]
Dec 23, 2009 (8:35 am)
I like Ford and have owned Ford cars for the last 25 years. This "projected" residual value rise would need to be tethered to the increased purchase price to be a meaningful number. 2010 non-base Tauruses have increased about $2k in price over earlier model years (becasue of improvements). Increased purchase price should result in increased residual value.
And, of course, it is a projection for 3 years out. Projections are tricky, especially this early into the 2010 sales season.
This is certainly worth highlighting by Ford (any even suggestive good news should be trumpeted) but I doubt it is a reliable or even meaningful stat unless the adjustment for purchase price is factored in. Whether it is or not isn't stated in the article.
Predicting 2013 or 2016 values when it isn't even 2010 is a risky business.
#313 of 493 Re: Taurus resale [pod]
Dec 23, 2009 (9:22 am)
Well of course the adjustment in purchase price is figured in. The fact is (and most people don't seem to realize) is that you don't get high resale, unless the vehicle sells for something reasonably close to list price. If a vehicle was very heavily discounted and loaded up with rebates and incentives (like the 09 Taurus), this always depresses resale. You have artificially created a market for a less expensive car than the car was designed to be. Detroit did this for years.
However, resale is given more weight than it should have. If you pay far less at the beginning, of course the car will lose far more value as a percent of its list price (the way resale is usually calculated). But given that you paid less at the beginning, you SHOULD get less at sale or trade. Your actual cash outlay buy-to-sell is often no more with a car that has high resale v. low. Often, the buyer of a car with poor resale (if they caught all the front end discounts unavailable to the buyer of a conveyance with high resale) will come out money ahead. A high residual value is only important if you paid a BMW price in the first place. But car buyers don't get that, so the manufacturers will continue to crow about projected high residuals.
#314 of 493 Re: Taurus resale [gregg_vw]
Dec 23, 2009 (9:49 am)
Why do you say "of course" the purchase price is factored in. I read the article many times and there is no mention of purchase price only "resale value" and "residual value" neither of which factors the purchase price.
#315 of 493 Re: Taurus resale [pod]
Dec 23, 2009 (10:26 am)
I read the article carefully as well and made the same assessment. The analysis specifically seeks to associate a discrete dollar value with the residual value of the car and then compare that dollar value to prior models and to competing current models.
This is an entirely flawed analysis for the exact reason that "pod" identifies. Residual value is only meaningful as compared to initial purchase price. An increase in residiual value as a percentage of actual purchase price is what would be important here, or better yet, a comparison of the projected total cost of ownership over the first three years of the vehicle (assuming liquidation after year 3).
Unfortunately, this is fairly representative of the type of analysis conducted in these types of articles, which is to say there's a reason they were journalism majors and not finance majors.
#316 of 493 Re: Taurus resale [poodog13]
Dec 23, 2009 (1:58 pm)
But it is all moot, poodog, because even though you have a good point about actual purchase price, residuals and resale values are always figured against list price. That is because there is no good way to easily figure anything on actual purchase prices; those data are not readily available in aggregate form. And comparisons of total cost of ownership after three years also suffer from not figuring in actual purchase prices.
There are high resale value cars like certain models of the Mini Cooper that sell over list. That is not figured in the "true cost of ownership" either. Bottom line, you more or less get what you pay for. If a model is in high demand or short supply, it will sell for at or near or even over list price. Used versions of it will sell for more as well. But since your outlay was more at the beginning, you damn well better get more at trade. However, if you buy a Lincoln Town Car for $12,000 off list price, you better expect it isn't going to be worth very much in three or five years. Usually, in the end you haven't lost anything, since your initial outlay was a bargain, compared to that Lexus that is now commanding $10,000 more five years later.
#317 of 493 January ford sales, taurus
Feb 05, 2010 (9:06 am)
Ford did very well in January. Deservedly, they have good cars including the Taurus line. However Taurus was the second lowest ford model in actual sales at 3768 units (only the Lincoln MKsomething did worse). This is up 121% from armageddon January 2009 which is like saying up from almost nothing. I think the price point for the non-SHO models is $3-4K too high and predict rebates, driver loyalty and other incentives will reduce the cost by about this amount by the end of the year and if that happens and I can tolerate the limited rear view and mamouth center console I will probably buy one. Its not the car,which is good, it is the price point that limits present purchases.
#318 of 493 Re: January ford sales, taurus [pod]
Feb 05, 2010 (9:29 am)
Could not agree more. Many have said this, but the fanbois just don't want to listen. A 30K+ Taurus is a very hard sell. Especially with the not-so-stellar 3.5L Duratec. The SHO is an excellent vehicle, but $45,000 ?!?!? Good luck with that.
#319 of 493 Re: January ford sales, taurus [freezed]
Feb 05, 2010 (9:40 am)
I don't think you'll see any big increase in incentives because Ford is no longer playing the volume game. You don't see a lot of Taurus' on the lots because they're matching production to actual demand and not creating artificial demand. And they should be reaping a nice profit on the ones they do sell. Throwing cash on the hood only helps volume, not profits and it kills resale values.
What some of the non-fanbois fail to realize is that this isn't the old Taurus fleet queen. It isn't competing against the Camry and the Accord. It's in a different market segment now with the Fusion doing the dirty work in the midsize arena.
So how did the Taurus fare against the Avalon last month? Or the 300C? Or the Buick LaCrosse/Lucerne? That is the competition.
#320 of 493 Re: January ford sales, taurus [pod]
Feb 05, 2010 (10:16 am)
Ok, Automobile says LaCrosse sales shot up an impressive 185 percent to 4246 vehicles. RTT News says sales of the Lexus ES350 was 2923 units, up 6.6% over January last year.
Better then the ES350 which it competes with on price just larger.
#321 of 493 Re: January ford sales, taurus [british_rover]
Feb 05, 2010 (11:07 am)
Toyota Avalon sales Jan. 2010 - 944, down 56% from Jan. 2009..
Chrysler 300 was 1654 vs. 2200 a year ago.
Taurus seems to be holding its own against the direct competitors.