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Drive to be tops

Honda, Toyota score big on retaining value

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Toyota and Honda are scoring big in two competing indexes that measure how well new cars are expected to retain their value.

For the second year, Toyota and its luxury brand, Lexus, hold the top spots overall when it comes to resale value in the Kelley Blue Book's predictions. Honda and its Acura luxury division are the big winner is a similar survey by ALG, which also tracks expected car depreciation.

When it comes to individual models in various car categories, Honda did well in KBB's survey with Honda Fit, Civic and Accord all the leaders of their respective categories.

ALG, once known as the Automotive Lease Guide, gave a big nod to Hyundai in its individual rankings. Elantra, Azera and Santa Fe were category leaders.

Overall, the value of a new car car bought today is expected to be worth 38.2 per cent of its original value in five years, KBB says. That's an increase of 2.5 percentage points compared to the 2012 model-year average from the same period last year.

KBB's and ALG's indexes are closely watched in the car industry because projected resale value over five years is considered a key measure of quality and how well automakers' are managing their business. A decade ago, for instance, Detroit automakers all had relatively low resale values on their vehicles because they were selling new ones at hefty fleet discounts, making the older ones less valuable.

For Toyota, the place atop KBB's 2013 Residual Analysis Report shows how far it has come since the multitude of recalls and safety questions around its vehicles in the wake of unintended-acceleration fears a couple of years ago. It, like other Japanese automakers, also saw a dramatic drop in inventory following the 2011 Japan earthquake and tsunami. This year, Toyota has been posting record sales increases.

"After the past two tumultuous years, Toyota bounced back in 2012 to prove it hadn't lost its competitive spirit," says Eric Ibara, director of residual consulting for the Kelley Blue Book, in a statement. "Enduring some of its darkest days in the U.S. market after unintended acceleration issues caused a massive worldwide recall of Toyota models, the brand managed to retain residual value levels consistent with its historical averages."

KBB says Toyota improved its 60-month average residual value by more than three percentage points from this time last year. Its FJ Cruiser and Tacoma continue to be tops in their truck categories. The next Avalon full-size car, which underwent a dramatic restyling, is projected to have a nearly eight-percentage-points increase in projected resale value over five years.

Overall, the forecast says trucks will hold more value than cars. The average 60-month residual value across all trucks will be 39.8 per cent compared to cars at 37.2 per cent. Says KBB: "Excluding compact SUV/crossovers, full-size SUV/crossovers and high-performance cars, all segment average 60-month residual values increased on a year-over-year basis. The average residual values for all cars increased 3.1 percentage points, while all trucks increased 1.8 percentage points."

As for Hyundai, ALG says its place on the list marks a big comeback: "Hyundai's ascent as a brand is nothing short of impressive," said Larry Dominique, ALG president. "Since 2007, when the brand ranked in the bottom quartile for Residual Value, Hyundai has delivered well-executed product, and has kept incentives and fleet -- two elements that can quickly damage residual value -- in check. And, as demonstrated by the redesigned Santa Fe Sport, they continue to deliver."

-- USA Today

Republished from the Winnipeg Free Press print edition November 29, 2012 B7

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