2018 Honda Civic

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Whether buying or leasing, there’s no shortage of factors to consider when you’re seeking a new car, and yet people often fail to take one of the most important into account: residual value.

The Importance of Residential Value When Buying

You’ll hear a lot of people talking about how buying instead of leasing is an investment; after all, you’re putting in money to make the car yours. So, it should come as no surprise that residual value is important.

All new cars depreciate in value, so the car you’re investing in is going to be worth less as the years go by. However, a car with high residual value isn’t going to depreciate as dramatically. That helps when you want to sell and move on.

Does Residential Value Matter When Leasing?

Few drivers understand that residual value is just as important when leasing a vehicle, but it’s a crucial factor in determining your monthly payments. When you lease, you’re essentially paying for the value the car loses when its under your care. If the car loses a smaller portion of value – in other words, if it boasts high residual value – the monthly payments will be lower.

Let’s take a hypothetical:

  • You lease a $25,00 Honda Civic. It’s worth $20,000 at the end of the lease, so you’ve used $5000 worth of value, or 20%.
  • You lease a $25,000 rival model. It’s worth $15,000 at the end of the lease, so you’ve used $1000 worth of value, or 40%.

The dealership would clearly need to charge higher monthly payments for the rival model.

Why Choose a Honda?

Okay, so residual value is important, but what does that have to do with Honda? Well, Honda vehicles have consistently retained a higher residual value than other brands. Several models earned a Best Retained Value Award, and the following have all claimed the top-spot in their respective classes:

  • Honda Fit
  • Honda CR-V
  • Honda Odyssey

Residual Value is One of the Most Important Things to Check When Buying or Leasing

Honda’s exceptional reputation for retaining residual value is an often-overlooked benefit. Plus, there are numerous Honda models that consistently make it past 200,000 miles, which is yet another reason the brand is so highly-regarded. Contact Walla Walla Valley Honda today to explore financing further – alternatively, feel free to arrange a test drive.

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