Best value? The car that loses the least value over time
The Nissan GT-R is tops in the Luxury Sports Car category.
Jeremy Cato, Autos.CTV.ca
Published Friday, May 28, 2010 1:33PM EDT
Until this week, the "Black Book" was a mystery to most Canadians -- the Canadian Black Book (CBB), that is.
The Black Book has long been a reliable source for used car values, used by dealers as a pricing guide. Savvy car shoppers could access it, too, by linking through various manufacturers' Web site. But you had to know where to look.
Now, Canadian Black Book has taken all the mystery out of how to access used vehicle values. The CBB people have launched a consumer Web, complete with a "Trade--in Value" estimator. It's free and it's easy to use.
Anyone in need of trade--in values can use the site to learn the average asking price for a used vehicle and the future value of virtually every car and truck manufactured since 1997. It's a hugely useful tool.
"The site's ability to generate a future value for literally every vehicle available in Canada also provides an invaluable tool in determining the total cost of ownership," says auto analyst Dennis DesRosiers.
That's because your biggest vehicle expense -- the No. 1 cost of ownership -- is depreciation. Knowing how much value your car loses over time is critical to understanding what you're paying for your daily driver.
Sure, sure, if you keep your vehicle until it qualifies for a Cash for Clunkers bonus, depreciation is essentially a non--factor. But the great majority of Canadians either lease or finance a new--vehicle acquisition; for them, depreciation is a real cost.
This is where CBB can really help. Using data drawn from a variety of real--time transactions -- e.g., auto auctions, dealer sales -- this site delivers what many believe are highly accurate current and projected used vehicle values. Really, it's a point--and--click operation: select the model and year, choose options and trim packages, plug in the kilometres on the odometer and up pops a low, medium and high value range in seconds.
So the Black Book is one excellent resource. Another is Automotive Lease Guide (ALG), which recently released its second annual Canadian Residual Value Awards. ALG is one of the companies car companies and finance outfits use to determine resale values after three and four years ---- for the purposes of leasing, in particular.
This year, ALG's awards are based on 2010 model year vehicles. ALG says the conclusions come from "careful study of segment competition, historical vehicle performance and industry trends, and are based on analysis using only Canada--specific data."
And the winners? Subaru Canada, Inc. took top spot among mainstream brands, with ALG projecting that after four years your Subaru will have retained 41.9 per cent of its original value. The top luxury brand is Nissan's Infiniti brand, with Infiniti vehicles holding onto nearly half (47.2 per cent) of their original value after three years.
So buy a Subaru or an Infiniti and you'll spend less money on depreciation. Of the two, perhaps the greater surprise in this year's report is Infiniti. A relatively small luxury player in Canada, Infiniti has maintained pricing discipline by limiting discounting.
Keeping a lid on overly generous sales sweeteners has helped Infiniti on the residual front, but it has also held sales increases in check. Indeed, Infiniti sales are up 21.9 per cent on the year, which sounds and is impressive. Yet rivals such as Audi, BMW, and Mercedes--Benz are up 52.9, 33 and 28.3 respectively so far this year.
Another interesting case is Toyota and its Lexus luxury brand. The Toyota brand ranks fourth in ALG's report, with residuals at 39.4 per cent. Lexus is fifth in the luxury category at 44.4 per cent. So far ALG has not seen a decline in Toyota values, despite the worldwide recall of more than eight million vehicles.
But there are troubling signs. In ALG's Spring 2010 Perceived Quality Survey, Toyota declined from first to sixth among the mainstream brands in the U.S. The survey asks consumers about their beliefs regarding the quality of the vehicles associated with various brands. ALG suspects the decline in Toyota's perceived quality may have an impact on resale values at some point, though when and how great that impact will be remains unclear.
Meanwhile, ALG rival Canadian Black Book (CBB) has found that Toyota's recent troubles have so far had little impact on residual values. In fact, in CBB's most recent retained value awards released in March, Toyota's performance was "exceptional." Six Toyota vehicles finished first in their segments, while one Lexus model won its category.
"Given Toyota's recent media attention, this outcome may be a surprise to some," says Larry Shred, CBB executive vice--president. "So far their values remain stable and that is a strong indicator of the public's trust in Toyota the brand."
Obviously, auto makers who steer clear of perceived and real quality problems are likely to benefit on the residual value front in the coming year. Strong brands with a clean quality and safety slate will only get stronger in the coming year -- and that's money in the pocket for owners of vehicles from those brands.
Top Seven 2010 ALG Canadian Residual Value Awards
Mainstream Brands 4-Year Residual
- Subaru 41.9 per cent
- Honda 41.6 per cent
- Mazda 39.5 per cent
- Toyota 39.4 per cent
- Nissan 39.2 per cent
- Volkswagen 37.4 per cent
- Suzuki 34.9 per cent
Luxury Brands 3-Year Residual
- Infiniti 47.2 per cent
- BMW 46.4 per cent
- Acura 46.1 per cent
- Audi 44.9 per cent
- Lexus 44.4 per cent
- Land Rover 43.6 per cent
- Mercedes--Benz 41.7 per cent
Source: Automotive Lease Guide
Segment Winners in the 2010 ALG Canadian Residual Value Awards
Mainstream Brands 4-Year Residual
- Entry Compact Car: Nissan Sentra 42.6 per cent
- Mid--Compact Car: Subaru Impreza 44.1 per cent
- Midsize Car: Subaru Legacy 40.5 per cent
- Fullsize Car: Nissan Maxima 33 per cent
- Compact Utility Vehicle: Honda CR-V 43 per cent
- Midsize Utility Vehicle Mazda CX-7 40.3 per cent
- Large Utility Vehicle: Toyota Sequoia 35.7 per cent
- Minivan: Honda Odyssey 33.4 per cent
- Compact/Midsize Pickup: Honda Ridgeline 37.8 per cent
- Fullsize Pickup: Toyota Tundra 35.8 per cent
- Sporty Car: Subaru Impreza WRX/STI 47.8 per cent
- Hybrid/Alternative Power Train: Honda Insight 42 per cent
- Luxury Brands Three--year Residual
- Near LuxuryCar: BMW 1 Series 51.5 per cent
- Luxury Car: BMW 6 Series 43 per cent
- Luxury Sports Car: Nissan GT-R 50 per cent
- Near Luxury Utility Vehicle: Land Rover LR2 48 per cent
- Luxury Utility Vehicle: Land Rover Range Rover Sport 45.7 per cent
- Sourse: Automotive Lease Guide
And the Canadian Black Book says…
Like Automotive Lease Guide, the Canadian Black Book (CBB) also rates vehicles for residual or resale value, though CBB uses a different methodology. CBB recently released its fifth annual Retained Value Awards which are based on the actual retained manufacturer's suggested retail price (MSRP) on 2006 models.
CBB says its awards help consumers identify which vehicles hold onto the greatest percentage of their original value. CBB warns that historical retained value is not a guarantee of future strength, but it is a strong indicator for how a vehicle should perform years down the road.
"For the consumer, selecting a vehicle with a lower depreciation rate will reduce their overall cost--of--ownership," says CBB executive vice--president Larry Shred.
Segment winners in the 2010 CBB Retained Value Awards:
- Sub--compact: Toyota Yaris
- Compact: Mazda Mazda5
- Mid--size car: Honda Accord, Subaru Outback, Volkswagen Passat (tie)
- Full--size car: Toyota Avalon
- Entry luxury car: Lexus IS Series
- Luxury car: Audi A6, BMW 5-Series (tie)
- Premium luxury car: BMW 6-Series, Mercedes--Benz CLS-Class (tie)
- Sports car: Mini Cooper, Volkswagen GTI (tie)
- Premium sports car: Porsche 911
- Compact SUV: Toyota RAV4
- Mid--size SUV: Honda Pilot
- Full--size SUV: Nissan Armada, Toyota Sequoia (tie)
- Luxury SUV: Mercedes-Benz G-Class
- Minivan: Honda Odyssey
- Large van: Dodge Sprinter
- Small pickup: Toyota Tacoma
- Large pickup: Toyota Tundra
Source: Canadian Black Book (actual retained value percentages not available)