Power supply for electric car charging. Electric cars charging station. Power supply plugged into an electric car being charged.
Reflecting new consumer preferences, a gas-electric hybrid and a South Korean sedan are first-time winners in the annual Best Retained Value Awards determined by Canadian Black Book, the nation’s curator of vehicle valuations.
Astute buyers know the biggest expense of a new car is depreciation — that unseen scourge that devalues your ride as soon as you leave the dealership. Canadian Black Book (CBB) established its awards eight years ago as a way of showcasing its market intelligence and informing consumers.
For the 2013 winners, CBB tracked what 2009-model-year vehicles are actually fetching at industry auctions and then compared those values to their original sticker prices. The vehicles whose value eroded the least over the past four years made the awards list, divided into 19 market segments.
The 2013 CBB award winners were announced this week at the Canadian International AutoShow, with a couple of surprises among the nameplates making their return engagement.
The first-place finish by the Toyota Prius in the compact car category caught even Josh Bailey, Canadian Black Book vice-president, research and editorial, off guard.
“Prius hybrids weren’t holding their value terribly well at first. Like everyone else, we were skeptical,” Bailey says.
But rising fuel prices lifted the gas-sipping Prius’s stock in trade. Add to that the car’s proven durability in taxi fleets across the country, and its valuation has improved.
It doesn’t hurt that the Prius is a unique platform, adds Bailey. Instead of embracing hybrid versions of conventional models like the Toyota Camry, many hybrid shoppers prefer the Prius as a recognizable, green nameplate.
The other unexpected winner is the Hyundai Genesis in the full-size car category, displacing the Toyota Avalon, which dominated the category over the past three years.
“It’s the first time Hyundai, or any South Korean automaker, has won a retained-value award from Canadian Black Book. It has the right features and the reliability to show for it,” says Bailey.
The fact that consumers and dealers are willing to pay a higher proportion of a four-year-old Genesis’s valuation than that of a Nissan Maxima or Pontiac G8 suggests Hyundai has finally, decisively, arrived.
Toyota together with Lexus, its premium division, dominated the standings again this year (see table) by winning eight out of 19 categories — an impressive outcome, despite the recall debacles and lawsuits that hounded the automaker.
Bailey is careful to point out that retained value is not simply a measure of perceived reliability.
“The winning models deliver an overall package of benefits to buyers, not just dependability,” he says. “The ones that nail the whole package and meet consumers’ expectations are rewarded with strong residual values.”
Chrysler is the only one of the Detroit Three manufacturers to win any categories, earning three for its Dodge Challenger, Jeep Wrangler and Dodge Sprinter full-size van. The key to the automaker’s success may be that all three are relatively unique — an attribute consumers are willing to pay higher prices to acquire.
Most European nameplates were shut out of the winners’ circle, with the exception of BMW, which won three for its diminutive 1 Series cars, 6 Series luxury coupe and X6 luxury SUV. Less-than-strong residual values can impact leasing costs, the linchpin of European luxury vehicle sales in Canada.
Bailey defends the Canadian Black Book’s assessment of used-vehicle demand as a reliable predictor of the future value of today’s new models — something CBB documents on its website (canadianblackbook.com) and allows consumers to tap into before making a buying decision.
“By sharing our expertise online, we help consumers value their trade-in and be better informed when shopping for those vehicles that best hold their value,” says Kathy Ward, CEO of Canadian Black Book. “We help put smarter consumers into showrooms and simplify the process.”
The CBB website has logged more than 100 million page views by 11 million Canadians since launching in 2010. Bailey says today’s consumers are motivated to learn which models keep their value better, especially with the advent of 84- and 96-month car loans.
“I grew up in the family car business. Back in the day, very infrequently did people consider what their new car would be worth later on.”
“We just want to raise the level of the conversation.”