Blue Book: Toyota Resale Values Up; Incentives a Factor

ToyotaAt the height of the recall frenzy in February, Kelley Blue Book lowered the outlook on values of current, used Toyotas by 1-3 percent depending on the model, but now forward-looking resale values are on the rise for the beleaguered Japanese car giant.
Blue Book just released its May/June guide that shows the average year-over-year change in the 36-month residual value of new Toyota models is forecast to increase by 4.2 percent, based on a model’s MSRP (sticker price).
Toyota’s recently launched zero percent financing deals can actually have a detrimental affect on residual, or resale values, because of a potentially large volume of lease returns for banks down the line.
So a lot is riding on how long Toyota will maintain its incentives, which is driving up sales for March by as much as 40 percent.
The surge in sales comes during the still unfolding aftermath of millions of Toyotas recalled for unintended acceleration issues, which is also prompting a number of lawsuits nationwide against the car company.
KBB said that Toyota’s 3-year residual value increase is below the industry average increase of 6.2 percentage points, but it outperforms several other brand increases.
KBB analysts say incentive spending can affect current, used-car values much more than the residual values. But they do not believe the company will make zero percent financing “a permanent fixture and therefore values will not be impacted greatly three or four years from now.”
The latest data from KBB shows 45 percent of serious new-car shoppers are now considering a Toyota, up 13 percentage points from last week when 32 percent of shoppers were considering the brand.
“Incentives offering lower interest rates have less of an impact on future values than cash incentives,” said Eric Ibara, director of residual value consulting, Kelley Blue Book. “Attractive lease payments can increase market penetration for certain models and create a larger volume of lease returns for the banks in the end. What remains to be seen is the larger volume of leases Toyota’s incentives create.”

One thought on “Blue Book: Toyota Resale Values Up; Incentives a Factor

  • April 3, 2010 at 1:17 am
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    I HAVE A 2010 TOYOTA CAMRY LE THAT HAS 1630 MILES ON IT. YES, I WAS AFRAID TO DRIVE IT. BOUGHT IT IN AUG 09 AND ENJOYED THE SMELL OF A NEW CAR FOR 3 MONTHS BEFORE THE S**T HIT THE FAN! TOOK IT TO CARMAX TODAY TO SEE IF THEY WOULD BUY IT…….BOTTOM LINE….$13K!!! IF I LET TOYOTA TAKE IT BACK IT WILL BE LIKE SELLING IT FOR $23900 WHICH IS THE PAYOFF. SO, SELLERS BEWARE! THERE ARE PLENTY OF PEOPLE OUT THERE THAT ARE TAKING ADVANTAGE OF OUR MISFORTUNE. WHO CARES ABOUT CREDIT RATINGS WHEN YOUR LIFE COULD BE AT STAKE.

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