Residual Value

On Tesla’s Guarantee

Posted on: April 4th, 2013 by Editorial Staff

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Tesla announced on Tuesday that it would offer a new type of purchase structure for its Model S sedan, in conjunction with US Bank and Wells Fargo. A vital element of this financing offer is the company’s promise to repurchase the vehicle after 3 years for a set residual value percentage, which essentially offers buyers the same type of financial backstop that lessees have, hedging against a major loss of value through depreciation and allowing early adopters to surmount one more hurdle. (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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ALG Announces 14th Annual Residual Value Awards

Posted on: November 26th, 2012 by Mike Cooperman

ALG, the industry benchmark for vehicle values and a leading provider of automotive insights, today announced the results of its 14th annual Residual Value Awards, with Honda and Acura earning the awards for top Mainstream and Premium brands, respectively. Acura returns to the top ranking among Premium brands after a two-year gap while Honda ranks highest after a three-year gap. While Acura and Honda claim the top spots, it was the Toyota family of brands that walked away with the most hardware – nine total – six awards for Toyota, two for Lexus and one for Scion. (more…)

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