Nov 28th, 2007 by RJ Menezes
It long been a fact that American cars don’t hold any resale value. Anyone who’s had the displeasure of experiencing the difference between an imports depreciation versus an domestic vehicle’s will wholeheartedly agree.
There are just to many American cars on the road and this fact alone drives prices, and value, down. Domestic car manufactures are to busy selling everything they can that they don’t realize it’s watering down their own home market. They sell too much, and ironically that is the problem.
Take fleet and rental company’s, for example. Companies like Hertz and Avis buy so many of a certain vehicle that the value of that vehicle goes down. If they buy 30,000 Chevy Impala sedans and only use them for 20,000 or so miles, and then get rid of them, the market is suddenly flooded with Impalas. When you go in to a dealership and try to trade in your Impala, then you get the short end. News Flash!: Your car is not worth anything bub, there are too many of them on the road.
Well now, after many years, the big guys in Detroit are getting it and are producing less cars. This is shooting the value of American cars skyward. Good news then, for we the consumer no longer take such a hit on our vehicle’s resale value.
This is also good news for the manufactures. People are more willing to buy American if they know it’s a safe investment and it will hold it’s value on trade in. This is a tricky balancing act. Make more by selling less. Yet, the foreign auto makres have been doing it for a long time, and they don’t have trouble making money.
Well hopefully now, neither will we.