Today on CBT News, anchor Jim Fitzpatrick is joined by Eric Ibara, Director of Residual Values for Kelley Blue Book. Ibara joins the show to discuss the importance of residual values and how automotive dealers can leverage resale values as a major selling point.
Ibara begins the conversation by talking about how residual values are important for both dealers and consumers. He says residual values help dealers highlight important aspects of their vehicles. Many times consumers focus on the sales price, without focusing on how the vehicle’s value might drop in a short amount of time.
There are many factors that impact residual value. Ibara says it starts with supply and demand. When vehicles hold their value better, it translates to a lower monthly payment. Ibara believes the shortage of semiconductors could lead automakers to offer less leases due to a shortage of vehicles or they could take advantage of the higher residual values.
Kelley Blue Book has recently seen a very high residual value in trucks, specifically mid-sized pickups. The arrival of the Chevy Colorado created a boom in the mid-size truck sector, as models like the GMC Canyon, Ford Ranger, and Jeep Gladiator entered the market. Even better than the mid-size sector, full-size trucks currently hold their value above all other sectors.
Ibara concludes the conversation by discussing how dealers can leverage this information to improve their business and winners from the 2021 Kelley Blue Book Best Resale Value Awards. He says that dealers can showcase the vehicles that hold their value better. It’s also important for dealers to educate their customers on which vehicles hold their value and why. The Kia Telluride won the 2021 Kelley Blue Book Best Resale Value Award as the top-rated SUV. The Chevrolet Corvette also won its category for the second year in a row.
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