KBB Disagrees With ALG And Names Toyota And Lexus The Tops In Resale

Kelley Blue Book, www.kbb.com, the leading provider of new and used vehicle information, announces the all-new 2011 model-year vehicle winners of its annual Best Resale Value Awards, which recognize current and forthcoming vehicles for their projected retained value five years from now.  Since depreciation (or loss of value) is typically a car-buyer's primary expense during ownership, these awards, like all of kbb.com's new- and used-vehicle information, are designed to help consumers make more informed car-buying decisions.

Kelley Blue Book's Best Resale Value Awards are based on projections from the Kelley Blue Book® Official Residual Value Guide, determined by an expert staff of automotive analysts.  These prestigious awards honor vehicles expected to maintain the greatest proportion of their original list price after five years of ownership.  Low-volume vehicles and vehicles with a Manufacturer's Suggested Retail Price of more than $60,000 are excluded from award consideration, except in the luxury and high-performance categories.

(Residual values used for award calculations are based on the November/December 2010 Kelley Blue Book® Residual Value Guide.  Top 10 models appear in alphabetical order).

While most car buyers today consider sticker price one of the most significant numbers when choosing a new vehicle, the editors at Kelley Blue Book's kbb.com recommend that shoppers consider a number they won't find on any window sticker: the resale value.  Depreciation often is the greatest expense incurred by drivers during the first five years of vehicle ownership.  An average vehicle will only retain about 34 percent of its original value after a five-year ownership period, meaning that a $50,000 new car today will only be worth somewhere close to $17,000 after five years.  Vehicles with average or below-average resale values are generally plentiful in the marketplace and easy to find.  But certain vehicles are projected to hold their value better than others.  While much of a vehicle's resale value is based on supply and demand, as well as current and projected future market conditions, vehicles that maintain their value best are never heavily discounted and tend to generate consumer enthusiasm.

"Consumers should take a good look at the projected resale value of a car when choosing their next new-vehicle purchase, and they would be wise to carefully consider the 2011 Best Resale Value Award winning vehicles and brands on this year's list," said James Bell, executive market analyst for Kelley Blue Book's kbb.com.  "Vehicle depreciation is a new-car buyer's biggest expense, yet many shoppers don't realize that resale value information is available for free on Kelley Blue Book's kbb.com.  Taking the time to research and choose vehicle makes, models and options wisely now can help new-car shoppers hold value down the road when they go to sell or trade-in the vehicle."

Vehicle shoppers should take several factors into consideration when buying a new car to ensure as much future value as possible. Just because a car is expensive or from a luxury brand does not necessarily mean it will hold its value better than an inexpensive car down the road. In fact, because resale values are calculated as a percent of original list price, an expensive vehicle has to command a relatively high price later as a used car to maintain its residual value. For example, an $80,000 vehicle has to be worth $24,000 three years later to have a residual value of 30 percent. At this price point, not only will it compete with other used luxury vehicles but it also will compete with many new vehicles in the marketplace.  Meanwhile, a $12,000 vehicle only needs to be worth $3,600 three years later to have the same 30 percent residual value, and at that price point it will not compete at all with new vehicles.

In addition, most options and packages added to a vehicle do not necessarily increase its resale value. However, there are exceptions to the rule, such as a high-performance engine or a performance package in a sports car.  Finally, regional preferences can significantly impact the value of a vehicle. In the colder sections of the country, a two-wheel drive vehicle's resale value will not be as high as a four-wheel or all-wheel drive option of that same model. At the other end of the thermometer, in warmer climates black (or dark-colored) cars will not have as high resale value as they could command in other regions.

While the company's Residual Value Guide has been published since 1982, Kelley Blue Book established its annual Best Resale Value Awards in 2003.  Kelley Blue Book reports projections based on current vehicle data, sales data, market conditions for each vehicle, competition within vehicle segments, expectations of the future economy and the combined experience of Kelley Blue Book's residual analysts. Residual values reflect projected future auction values for vehicles in average condition with 75,000 miles at the end of a five-year lease or ownership period. Kelley Blue Book's residual values are used by manufacturers, banks, financial institutions, governmental agencies and the automotive leasing industry.


 
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