Compact cars such as the Honda Fit and Chevrolet Aveo are now expected to retain more of their value than trucks and sport utility vehicles once prized for the resale demand, according to a car value tracking firm.
Automotive Lease Guide Inc., which provides residual value forecasts, attributed the reversal to soaring gas prices and a weak economy that have steered consumers away from SUVs and trucks and toward more fuel efficient cars.
“If you look at it from a dollars and cents perspective, it's just going to be really expensive to drive a car that's not fuel efficient and that is going to effect the values of those cars,” John Blair, ALG's chief executive, said Monday.
Residual value forecasts for compact cars with high fuel efficiency, including hybrids, rose an average of 5 percentage points, while the outlook for full-size pickups and full-size and midsize SUVs fell an average of 8 points, ALG said.
Never miss a local story.
The company now expects the Fit to retain an average of 56 percent of its manufacturer's suggested retail price after three years, up 10 percentage points from 2007. The Aveo's expected value jumped 9.3 percentage points to 42.8 percent.
At the same time, ALG cut the projected average value of the Ford Expedition SUV by 12.2 percentage points to 32.4 percent, while the residual value of the Chevrolet Suburban fell 9.5 percentage points to 29.7 percent.
That means the buyer of a 2008 Expedition XLT, with a base MSRP of $31,345, could expect to sell it for about $10,156 after three years, a drop of more than $3,800 from the previous forecast.