Top 10 new cars for future value
"Imports sell, they sure do," says Ron McNutt, owner
and president of Kentucky-based McNutt Motor Sales, a large-volume wholesale buyer
in the mid south that resells to dealers in Kentucky, Indiana, Illinois, Tennessee
and Missouri. He estimates his inventory is divided between domestics and imports.
car manufacturers are trying to move away from the production-driven philosophy
that has led to too many cars being sold in fleet and rental markets, both Nerad
and Toprak say, resulting in an over abundance of these cars languishing in the
resale market two years later.
"If you have way too many
cars in service, they're going to flood the marketplace," Toprak says. That
over supply drives prices down, lowers residual value and ultimately effects the
salability of newer models.
"Essentially there weren't
retail customers for them in the first place, and so there aren't likely to be
customers on the secondary market," Nerad says. "The domestics are getting
away from that, and are making a concerted effort to do that as little as possible
Quality concerns and the reputation of domestic
manufacturers have also factored into their cars' lower resale value, Toprak says,
although that's changing.
"In the last few years, domestics
are in the process of closing the gap," he says. "The way they're pricing
their vehicles enable them to at least close the gap between the Japanese brand
Domestic manufacturers could boost their
resale values by weaning themselves off incentives, too, Toprak says. Hefty incentives
reduce a vehicle's initial starting value, and at resale they also have a direct
Industry wide, incentives averaged $2,391 in
May 2007, barely changed from $2,374 in May 2006, Toprak says. But the domestics
outspend the Japanese almost three to one, with American manufacturers' incentives
averaging $3,139 per vehicle while Japanese spend just $1,321.
choosing specific brands and models, consumers can do other things to increase
their cars resale value.
|Kelley advises the following:
popular exterior colors, like black, white or silver.
sought-after equipment including antilock brakes, alloy wheels, a CD player, parking
sensors, navigation system, sensing cruise control and leather seats.
key to selling a car, either retail or wholesale, is to have something the public
wants," says McNutt.