Good news for car owners; residual car values are expected to rise in coming time due to manufacturers curbing their production to not outpace the market”s demand. GM and Ford have been rallying behind traditional leaders Toyota and Honda, and may be in the positions to offer better lease deals based on the residual values of their vehicles.
Latest projections are anticipating the two manufacturers vehicles produced from”10 onward to retain over 40% of their value after 36 months; Cadillac was the only brand from those manufactures expected to do so five years ago. A major contributing factor to the residual projections is the reception for the newer models.
Ford and GM have stopped overproducing in order to keep factories going, and are spending less on incentives, lowering their cost per car by a few hundred dollars. Historically the companies would overproduce and then rely on rental fleets to absorb the excess inventory; a practice which has also ceased.
– By: Stephen Calogera
Source: Automotive News (Subscription Required)