4 ms·

Subsequent owners care about resale value and it informs their purchasing decisions.

• mulmen 5y ago
  But why would the brand care about having the perception of high resale value 15 years after sale? How does that benefit them?
  • jankyxenon 5y ago
    You get to sell an “investment” with a higher return. Albeit negative.
  • 1123581321 5y ago
    Resale value makes the initial purchase price higher, and as a consequence makes lease payments higher since leasing is priced as an alternative to buying and selling the car and the car is sold after the lease period. Resale value also affects the quality of the car as experienced in the first few years. For these reasons, the brand is positively affected by being associated with a high resale value, assuming it wants to stand for quality.
  • stickfigure 5y ago
    The people buying a new car every 3-5 years are doing it because they can sell it at the end of that period to recoup some of that value. If the resale value goes down, the calculus on buying new cars changes. Clog up downstream and it will affect upstream.
    • fennecfoxen 5y ago
      Exactly. If you have a car that’s worth $10,000 more after five years, then that car can be priced such that it sells for more when you sell it the first time. How much more? Not the full $10,000; it depends on the discount rate - a 4% (real) rate, competitive with the stock market, suggests about $8000 more. And the reason the car has value 5 years out is that it’s still good for another 5-10 years. that driving value is the ultimate reason people buy cars at all. No, a consumer won’t do that kind of calculus, not directly, but a leasing firm sure will.