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Best Practices: Back-up Cameras

Posted on: April 7th, 2014 by Editorial Staff

The National Highway Transportation Safety Administration just issued a much-delayed rule requiring backup cameras on all light vehicles by 2018.

For several years now, ALG has recognized the value in many of the safety features that would eventually become standard due to regulations, such as stability control and side airbags. While anti-lock brakes are not required in the US market, studies have confirmed their value, and there are very few vehicles on which they’re not standard. ALG has determined that, with ABS being a hard add feature, those vehicles that lack ABS suffer a degradation in value of over $200 after 36 months, which can decrease its residual value by up to 2 points. (more…)

The Connected Future

Posted on: January 10th, 2014 by Editorial Staff

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At ALG, high-tech equipment has typically been valued as a highly depreciating asset on a vehicle, because new buyers are significantly more concerned with having the latest and greatest than used buyers. However, key announcements at this year’s Connected Car Expo at the 2014 LA Auto Show could change how we value the rapid increase of in-vehicle technology.

In an interview with Automotive News, former GM CEO Dan Akerson said that “connectivity has become a top five purchase consideration for buyers in their teens through early 40s.” As a way to address the needs for this large section of consumers, GM and others are seeking ways to satisfy not only this hunger to connect, but also some practical challenges for which solutions are long overdue. (more…)

2014 Land Rover Range Rover: Long or Short?

Posted on: December 18th, 2013 by Editorial Staff

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At the 2013 Los Angeles Auto Show, Land Rover announced a long-wheelbase variant of its iconic full-size luxury off-roader. An additional 7.3” of wheelbase will demand another $5,200 from buyers’ wallets, so we wondered, would the added length hold significant value at the end of a lease?

Whereas other long-wheelbase SUVs add space for families in the 3rd row or cargo area, a 3rd row remains unavailable on the Range Rover.  Today’s LWB, like the County LWB variant of the original, first-generation Range Rover, exclusively focuses its space surplus on delivering a satisfying 2nd row seating experience. (more…)

Porsche’s Latest Gamble

Posted on: December 16th, 2013 by Editorial Staff

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Historically, the Porsche brand has catered to an exclusive niche market, positioned at the very top of the luxury sector, closely straddling the line between luxury brands and exotics. Porsche built its reputation on selling speedy sports cars; its flagship 911 has had the second longest continuous production run among sports cars. (more…)

VW Talks Emissions and Quality

Posted on: September 5th, 2013 by Randy Lioz

We recently had the opportunity to visit Volkswagen’s Test Center California, the company’s emissions and product development test lab in Oxnard, CA. They gave us the chance to tour the facility and speak to its general manager, Matthias Barke. Barke covered a variety of topics, including how VW uses the facility, how the U.S. emissions environment differs from other parts of the world, and how VW has used it to improve its quality ratings.

The facility was opened less than a year ago and was the subject of a $27 million investment by the VW group. And in a development that might be described as a bit “meta”, earlier this year the facility was LEED certified, which Barke pointed out is particularly impressive based on the amount of energy it requires to run. The cold chamber alone, a single room that can chill cars down to -25°F, costs around $1,000 to run per day. This type of energy usage is offset by at least 35,000 square feet of solar arrays. Barke stated that in its first annual audit by the California Air Resources Board, the complex was called “the standard of the industry.” (more…)

How GM Is Improving Residuals

Posted on: April 3rd, 2013 by Editorial Staff

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Resale values are one of the strongest indicators of a brand’s health. Honda and Toyota have long been known for strong resale values, particularly because of their solid reputation for quality. ALG has continually emphasized the link between resale and brand health, and the rest of the industry has begun to rapidly internalize ALG’s message. (more…)

ALG 101: Residual Value vs. Resale Value

Posted on: April 2nd, 2013 by Editorial Staff

alg101One of the most common questions ALG receives is – “What is the difference between residual value and resale value?” To get a better grasp on the differences, we take a look at what each term means.

Residual value is defined as the value an asset is expected to retain over a period of time. For ALG, the residual is the projected value of a vehicle after a set “term”. ALG’s forecast residuals are often expressed as a 36-month value (which is the most common term—or length—for lease agreements in the United States), but can also be 24-, 48-, or 60-month values, or even an “odd term” in between. Residuals can be expressed in either dollar or percentage values, but when making comparisons between vehicles, the latter metric is usually more relevant, since it takes into account the original purchase price of the vehicle.

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When A Brand Decides To Change Their Models’ Names

Posted on: March 21st, 2013 by Daniel Sherman

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In the automotive world, brand is everything.  Logos, names, and alphanumeric assortments hold a level of perception well beyond that of a 15-minute test drive.  Automakers pour millions into developing the right nomenclature to provide a clear and consistent marketing message to the marketplace.  Awareness, perceived quality, emotional reaction, market positioning, and portfolio lineup positioning are all highly affected by model name. When the name changes, what happens to the game? (more…)

Coupe Styling Commands Strong Resale Premiums

Posted on: March 4th, 2013 by Editorial Staff

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Historically, the terms coupe and sedan have generally been defined in common understanding by their number of doors: sedans have four and coupes have two; exceptions can occur, of course, but the idea of a 2-door sedan has become increasingly foreign to car buyers. But as design has become an even more important reason to buy, automakers have sought to differentiate their portfolios with more eye-catchers, particularly the new category of four-door coupes. While customers wanting to stand out among their fellow brand peers are willing to pay a premium, is it worth it when it comes time to sell? (more…)

The Diesels Are Coming

Posted on: February 12th, 2013 by Editorial Staff

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At this year’s Chicago Auto Show, Chevrolet announced the Cruze Clean Turbo Diesel. The 2.0-liter turbo diesel 4-cylinder puts out 148 horsepower and 258 pound-feet torque and returns an estimated 42 mpg on the highway. Furthermore, diesels tend to get even higher fuel economy than their EPA ratings would suggest, but that’s not the only reason to buy. (more…)

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