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Ford F utes top resale value

Glass's Guide information services research manager Richard Plumb says the diesel-powered F truck performs so well because Ford discontinued importing the model in 2007.

RESALE value is one of the last things on private vehicle buyers' minds. However, a bit of homework on resale values could end up saving buyers thousands of dollars.

A study of the used values of vehicles released in the Glass's Guide shows that the best performers are made in Japan, SUVs, performance vehicles and diesel Ford F trucks.

Glass's Guide information services research manager Richard Plumb says the diesel-powered F truck performs so well because Ford discontinued importing the model in 2007.

"The value of the diesels went up as soon as they announced they would discontinue importing them," he says. "When it was announced in 2007 they were actually fetching about 127 per cent of their new price for three- to four-year-old models.

They've remained high because there is nothing with that six or seven-litre diesel engine and towing capacity in the market. But they're all diesels. No one wants to know the petrol models."

Plumb, who owns a 1993 Commodore that's "still going strong", says resale value is a basic economic result of supply and demand. "A lot of people are paying a great deal more attention to resale these days especially government departments and fleet companies," he says.

"For individuals there is a more emotional content in the purchase and the more emotional the less likely they are to look at the resale value."

He says most governments and fleet companies replace their vehicles after 40,000km or two years, but private buyers hold them longer. "The depreciation is usually the greatest in the first two years, so the longer you can hold the car the better you'll do," he says.

Resale values are low for light and small cars, dropping to around 50 per cent in four or five years. "With small cars a large proportion are rental cars which tends to reduce the average used value," he says. "But that's in the early years. If you hold on to them they hold their value in later years."

But the worst are people movers with a value drop in the first year of a third of the new price dropping under 50 per cent by five years. "The demand for people movers is reduced because of the increased availability these days of seven-seater SUVs," he says.

Plumbs says he has never researched the worst resale models. "But towards the end of their lives the AU Falcon and Magnas were pretty terrible," he says.

"Nothing is really atrocious apart from things that go off the market like Saabs." Saab dropped out of the market this year when GM sold out to Dutch sportscar company Spyker, but has announced plans to return next year.

Plumb also points out that resale values are low for vehicles from companies that make a lot of changes to their model line-ups or offer too many variants. "There is no continuity in their range, so they tend to suffer in the public eye," he says.

"The companies that are doing much better in the market are those that are trying to rationalise their ranges. The new Volvo range in 2011 is being rationalised from 47 to 32 models and VW is introducing new Golfs but have deleted all the diesel manuals to streamline the range. That sort of thing helps the companies."

However, he points out that companies with new models often discount current models to get rid of stock and the saving on the discounted cost could outweigh the loss through depreciation in a few years.

SUVs have good resale value because of the high proportion of private buyers, Plumb says.

The Glass's Guide shows resale values are better for large SUVs with about 61-66 per cent of its new value after five years compared with about 45-50 per cent for compact SUVs, 56-62 per cent for medium SUVs and 50-52 per cent for luxury models.

"One of the major differences are that the vast majority are private purchases as opposed to fleet so you don't get the number of cars coming back on the market in the first few years, so they return good value," Plumb says.

Brands such as Subaru and Honda that have a low proportion of fleet sales also have strong resale values, yet performance cars and utes have a high proportion of business sales but retain their value.

"Performance vehicles like Porsche, where there is an aura to the brand, they tend to be self-sustaining," he says. "Audi is also doing well because they have improved significantly in quality over the past five years. It's been quite a turnaround.

They also offer a slight purchase price advantage and in a personal observation they are less ostentatious than the alternatives. "The car industry is all about perception of quality, durability and reliability. People are buying for that even if they only intend on keeping a car for a few years."

He warns against choosing expensive options when buying a new car as the return on them is substantially lower than the resale value of the car. "It doesn't necessarily diminish their values, but a car that is more heavily optioned is more difficult to sell second hand because the optional equipment depreciates faster than the car itself," he says.

"If you buy expensive options like a special metallic paint that might cost $5000, by the time it's five years old that option might only be worth about $500. The used car market doesn't tend to value colour as much as new car buyers. Personalising a car also reduces the number of potential customers. Unusual exterior paint colours can particularly adversely affect the value of the car."

He also warns that the coming influx of Chinese vehicles could have low resale values. "I think Chinese vehicles are a big unknown and that could be a self-fulfilling prophesy in resale value in the short term," he says. "It will be a lot like Hyundai in the 1980s when it was new to the market."

He says Australian-made cars suffer because of the high fleet content and over-supply. "In terms of quality though the locally made cars are fantastic."

He says Japanese cars also have a high perception of quality. "The average Japanese car like a Mazda6 and Mazda3 do well," he says. "You could make the argument that Japanese is better than Korean, but with improving quality the gap is closing rapidly and will continue to close."

Meanwhile, don't hold your breath waiting for a new Ford F truck. Ford Australia communications manager Sinead McAlary says they "have no thoughts about reintroducing the F-Series".

"It's not produced in right-hand drive any more and the conversion costs are just too high," she says. "I'm not surprised their residuals are so strong though. They were hugely popular when we sold them here and it was a real disappointment for everyone, including us, when we couldn't make the business case work any more."

She points out Ford is about to release a new Ranger. "We think this will go some way to filling the void left when F-Series stopped coming to Australia," she says.

Gympie-based right-hand-drive conversion company Performax International is hoping to import F trucks for conversion. Marketing manager Maike Thiessen says they are currently "holding meetings in Canberra trying to get a licence to import them". "Our major seller here is the Chevy Silverado pick-up which is in that area. We sell mostly diesel," she says. "We are also bringing in the Toyota Tundra in petrol and diesel."

Top resale performers
Ford F 4x4 trucks 102% after 3 years
Toyota LandCruiser (4x4) 80% after 3 years Toyota Prado (4x4) 79% after 3 years Lotus Elise 76% after 5 years Ford FPV GT Cobra BF MkII sedan 76% after 3 years

RESALE PERFORMANCE

Light cars
1 year: 72.2%-76%
2 years: 72.5%-74.5%
3 years: 65.1%-69.5%
4 years: 55.6%-57.8%
5 years: 49%-50.7%

Small cars
1 year: 72.1%-73.9%
2 years: 69.6%-73.2%
3 years: 65.1%-66%
4 years: 59.8%-61.3%
5 years: 53.4%-56.5%

Medium cars
1 year: 77.5%-79.8%
2 years: 72.2%-73.6%
3 years: 60.5%-66.4%
4 years: 52.1%-54.5%
5 years: 46.6 %-49.3%

Large cars
1 year: 73.1%-81.2%
2 years: 65.6%-78.8%
3 years: 56.6%-76.2%
4 years: 47.9%-50.9%
5 years: 42.2%-43.1%

People movers
1 year: 66.8%-69.1%
2 years: 61.1%-64%
3 years: 54%-57.4%
4 years: 49.5%-52.8%
5 years: 42.3%-45.7%

Sports cars
1 year: 77.4%-80%
2 years: 71.4%-76.8%
3 years: 64.8%-76.4%
4 years: 57.3%-69.5%
5 years: 54.2%-75.9%

Upper large cars
1 year: 70.9%-73.1%
2 years: 64.1%-67.7%
3 years: 55.6%-57.9%
4 years: 49%-52.2%
5 years: 40.4%-46%

SUV compact
1 year: 78.3%-83%
2 years: 73.6%-75.4%
3 years: 65.9%-70.2%
4 years: 55.7%-61.7%
5 years: 45.6%-50.7%

SUV medium
1 year: 81.4%-82.8%
2 years: 76.4%-81.2%
3 years: 74.1%-79.4%
4 years: 63.8%-69%
5 years: 56.1%-62.8%

SUV large
1 year: 79.4%-79.7%
2 years: 81.8%-83.6%
3 years: 78.7%-80.6%
4 years: 64%-68.8%
5 years: 61.1%-66.8%

SUV luxury
1 year: 80.4%-82.1%
2 years: 74.1%-76.4%
3 years: 68.3%-74%
4 years: 58.3%-64.1%
5 years: 50.3%-51.8%

Pickup & Cab Chassis 4 x 2
1 year: 78.2%-81.4%
2 years: 72.7%-92.5%
3 years: 63.4%-93.1%
4 years: 54.9%-87.1%
5 years: 49.2%-77.5%

Pickup & Cab Chassis 4 x 4
1 year: 81.7%-82.6%
2 years: 74%-78.2%
3 years: 64.5%-101.9%
4 years: 57.9%-95.7%
5 years: 54.7%-80.9%

Vans
1 year: 75.2%-76.2%
2 years: 69.2%-72.3%
3 years: 62.8%-66.5%
4 years: 52.5%-66.1%
5 years: 46.5%-49.4%