What vehicles hold their value best?

April 20, 2011

CBB and ALG announce 2011 award winners

Knowing which vehicles are likely to return the highest trade-in value in the future, as a percentage of their original price, is important to both sellers and buyers. How vehicles rank in those terms can make the difference between selling or leasing a vehicle, or not.

Canadian Black Book (CBB) and ALG Canada both address that issue in their own way: CBB through its Retained Value rankings and awards and ALG via its Residual Value Awards and calculations. And both announced their own award winners for 2011 almost simultaneously.

CBB’s Retained Value Awards are given to the vehicles in 17 categories that retain the highest percentage of their original MSRP over four years – so, for 2011, they are based on actual experience with 2007 model-year vehicles.

“Depreciation is the largest expense associated with vehicle ownership and for six years these awards have helped buyers identify which vehicles depreciate the least,” says Kathy Ward, CEO of Canadian Black Book.

ALG’s Residual Value Awards go to the 2011 vehicles in 19 categories, plus overall mainstream and luxury brands, that are predicted to retain the highest percentage of their original price in the future. The winners were chosen on the basis of multiple criteria, including segment competition, historical performance and industry trends.

“A key indicator of a brand’s health and a significant contributor to driving increased profitability for a brand is high residual value,” says Raj Sundaram, senior vice-president, Solutions Group and ALG. “Our overall winners and market segment honourees are perfect examples of brands that are committed to delivering real value to dealers and customers.”

Similarities and differences

Not surprisingly, there were a number of similarities in the results of the two award programs. Common winners, in both cases, included the Honda Odyssey, Subaru Outback, Toyota Avalon, Toyota Tacoma and Toyota Tundra, and the Honda Fit, which won an ALG award, ranked second in CBB’s ranking for the same class.

There were equally as many differences – for a variety of reasons. In addition to the different methodologies, the defined categories in each case do not directly coincide; some of the CBB winners, which were on the market in 2007, are no longer available; and some of the ALG winners, currently on the market, were not available in 2007.

The accompanying table shows a comparison of the 2011 results for the two award programs.

While Toyota fared well in both cases and, combined with Lexus, took the most class wins in the CBB awards, Subaru earned the most ALG category awards. In addition, Subaru won the Mainstream Brand Residual Value Award for the second straight year.

“Subaru’s brand loyalty has been on the rise and the company has been careful to match its supply with consumer demand, keeping its forecast retention above that of other mainstream brands,” says Sundaram.

Infiniti captured top honours among luxury brands for the third year in a row. According to Sundaram, “Infiniti has become known for meeting high ideals in both performance and luxury and it offers buyers an excellent alternative to the traditional European luxury brands.”

ALG publishes the “Automotive Lease Guide” – the standard for residual value projections in North America, and has been forecasting automotive residual values for over 45 years in both the U.S. and Canadian markets. ALG is a company of DealerTrack Holdings, Inc.

For over 50 years Canadian Black Book has been the automobile value guide of choice for automotive dealers, insurance companies and banks in Canada. In 2010 the company broadened its outreach to include consumers, becoming an unbiased, trusted ally and information source critical to the vehicle-buying and selling process with the introduction of its consumer website: www.canadianblackbook.com.


About Todd Phillips

Todd Phillips is the editorial director of Universus Media Group Inc. and the editor of Canadian auto dealer magazine. Todd can be reached at tphillips@universusmedia.com.

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