Resale value
I keep car until they have no value so I'm not affected as much (if at all)
as the frequent trader. http://autos.yahoo.com/articles/auto...erforming-cars 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. |
Re: Resale value
Edwin Pawlowski wrote:
> I keep car until they have no value so I'm not affected as much (if at all) > as the frequent trader. > > http://autos.yahoo.com/articles/auto...erforming-cars > > 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. > > Or this guy Blair, doesn't know what he's talking about, or is giving us same old BS. I cannot speak about the Sonata, but here is the story about my Santa Fe: Same equipment, out of dealer shop: Santy 3.5L LX = $21,700 Passport 3.2L EX = $28,300 Difference = 28,300 - 21,700 = 6,600 less for Hyundai Santy residual = 21,700 x 40%= 8,680 > My cost = 21,700 - 8,680 = $13,020 Passport residual = 28,300 x 55% = 15,565 > My cost = 28,300 - 15,565 = $12,735 Difference in cost = 13,020 - 12,735 = $285 ..... that's it $285 less for the Honda .... now $6,600 at 8% flat interest in my BANK (savings on price of the Santa Fe) = $528 x 3 years = $1584 Plus $200 a year saving in insurance (nobody will steal a Hyundai, said the agent) = 200 x 3 = $600 So at the 3 years mark the Santy will be: 285 - 1584 - 600 = -$1,899 near $1900 LESS than Honda. So much for 'residual' .... Mr. Blair, go back to school, you flunked math. |
Re: Resale value
Vic Garcia wrote:
> Edwin Pawlowski wrote: >> I keep car until they have no value so I'm not affected as much (if at all) >> as the frequent trader. >> >> http://autos.yahoo.com/articles/auto...erforming-cars >> >> 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. >> >> > Or this guy Blair, doesn't know what he's talking about, or is giving us > same old BS. > > I cannot speak about the Sonata, but here is the story about my Santa Fe: > > Same equipment, out of dealer shop: > Santy 3.5L LX = $21,700 > Passport 3.2L EX = $28,300 > Difference = 28,300 - 21,700 = 6,600 less for Hyundai > > Santy residual = 21,700 x 40%= 8,680 > My cost = 21,700 - 8,680 = > $13,020 > Passport residual = 28,300 x 55% = 15,565 > My cost = 28,300 - > 15,565 = $12,735 > > Difference in cost = 13,020 - 12,735 = $285 ..... that's it $285 less > for the Honda .... now > $6,600 at 8% flat interest in my BANK (savings on price of the Santa Fe) > = $528 x 3 years = $1584 > Plus $200 a year saving in insurance (nobody will steal a Hyundai, said > the agent) = 200 x 3 = $600 > > So at the 3 years mark the Santy will be: 285 - 1584 - 600 = -$1,899 > near $1900 LESS than Honda. > > So much for 'residual' .... Mr. Blair, go back to school, you flunked math. > > > > > Nicely done |
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