Autoblog

You're right, Harry. I'll explain for those who never seem to understand real world dollars versus 'resale value'.

Hypothetically, using pricing from edmunds.com:
A Camry SE V6 stickers for $25475, and sells for $23,981. 65.7% of MSRP is $16,373.

An Impala LT has an MSRP of $22,310 with average transaction price of $19,991. 3 years later, retaining 58.2% of its MSRP, the Impala is worth $13,096.

In other words- the Camry has lost $7,608 from its' transaction price and the Impala has lost $6,895. Add in the interest acrued on the additional $3,990 paid for the Camry and the difference becomes even greater.

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They use the value of what the car is now over the transaction price (not MSRP) three years ago to determine retained value. In other words, if the Camry was purchased for $23,981 (as EnvironBob mentioned), then after 3 years it will lose $8,225 of its value. If the Impala was purchased for $19,991, then after 3 years it will lose $8,356 of its value.

Now if you want to compare apples to apples, then a $23,981 Chevy will lose $10,024 of its value compared to a $8,225 loss for the Toyota.

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So in other words, the lower residual value creates more depreciation, in this case, the Impala depreciates $151 more than the Camry when basically equally equipped. Due to the fact that the Toyota costs more to begin with, the depreciation is more than offset when counting the interest accrued (an additional $312 @ 5% / 36 mos.) on the $3990 difference between the two. That doesn't include the additional sales tax ($309 here) paid on the $3990 that the customer gets hit with.

For consumers, an apples to apples (equally priced) scenario doesn't really apply, as rebates, incentives and dealers willing to sell closer to invoice will maintain the price advantage of comparably equipped Chevies. This is why Edmunds has a lower 'True Cost To Own' on the Impala than the Camry.

Moral of the story, when you see a three year old Impala selling for $11635 and the same year Camry selling for $15756, the Impala hasn't actually lost nearly $4000 more than the Camry. The original owner on the Camry, however, did spend over $600 more during their three years of ownership than did the Impala owner.

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Actually, no. You need to compare apples to apples because the transaction cost is what people perceived the car to be WORTH. A customer pays for the higher transaction price (transaction, tax, interest, etc.) for the Camry because they perceive the car to worth that much more than an Impala. There's a reason why the Impala has such a lower transaction cost. People aren't willing to compare this particular Impala to the $23981 Camry, else the Impala would have a market price similar to the Camry (including all other fees). Since the car is perceived to be a lesser car there is no direct comparison. It's falsely implying that the Impala holds its value more...kinda like saying a Hyundai Accent holds its value more than an Impala because it depreciates less dollar-wise. If everyone would be following that rule then BMW/Mecedes will be out of business.

Also, you are assuming that the customer is putting no money down or trade-in. On the other end of the spectrum you can assume someone pays the full amount for the car and your financing cost difference would be moot. Moral of the story: You need to compare apples to apples.

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The Impala is a direct competitor to the Camry, as are the Accord, Altima, Sonata, etc.

Perception allows a manufacturer to charge more for the product because people believe it to be better, whether or not it is. A good example of this is bottled water. People will pay $6 / gal for Aquafina and tell you that it is better than tap water because it is nicely packaged and marketed. It is, however, "water from a municipal source" a.k.a., tap water. Aquafina demands a much higher price than tap water, but that doesn't make it a better product.

When it comes to actual out of pocket expenses, the Camry is more expensive to own than an Impala- in actual dollars. That doesn't mean that the Impala retains more of its value than the Camry, it means that the Impala will transport people from them point A to point B with roughly the same room, features and MPG for less money. Just because one perceives the Camry to be worth $4G more, doesn't mean they don't have to actually part with the extra $4G- and pay tax and interest on that $4G.

Automobiles are an emotional purchase and thus people will justify reasons for purchasing a certain vehicle. If one believes the Camry to be a better car, they will justify spending the additional money, just as some people will pay yet more for a Lexus ES, eventhough it shares platform and drivetrain with the Camry.

Even when you buy apples, some are shinier, some are more round, some are smoother around the stem. However, they are still all apples. One's perception will decide which apples they select out of the produce bin.

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Ted Kennedy: While I agree with just about everything you said there...we were using the term "apples to apples" as meaning "equally priced". While many would agree with you that the Impala is a direct competitor to the Camry, I'm not sure how many would agree that this trim is. A 3.5L Impala LT has only 211hp and 214lbs-ft of torque. The Camry 3.5L V6 has 268hp and 248lbs-ft. A more direct comparison may be the 3.9L Impala LT2 (which unfortunately still has only 233hp and 240lbs-ft, awful mileage, and starts out at over $25k MSRP).

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Awful mileage with the 3.9? It's rated 20/29 while the Camry is rated 22/31. And that doesn't account for hte fact that the real world hwy mileage of the 3.9 is much better than that courtesy of the D-O-D. We recently drove an Impala LTZ and averaged 32.65 rolling along I-57 through Illinois with three people and luggage in the car. GM also under-advertises the horsepower of their engines, by the way. The Toyota does have more power, just not as much as the advertised numbers would lead one to believe.

When comparing an Impala LT 3.9 to the Camry SE V6, you have to add some options to the Camry that are standard on the Impala, such as spoiler, cargo nets, floor mats, security system, remote start and navigation system to offset the Impala's standard On-Star, as well as XM radio.The Camry also offers a 4 way power passenger seat, while the Impala gas a 6 way.

There are some items that are available only each respective model, such as the overhead console, braking assist and side curtain airbags on the Camry. The Impala has the aforemention D-O-D and On-Star.

Then you get into dimensional differences, such as the Impala's trunk being 4.1 cu. ft. bigger than the Camry's, not mention more head, shoulder and hip room in the Impala.

By the time you option the Camry SE V6 with the items that are standard on the Impala, it has an MSRP of $30,061 and an average transaction price (according to Edmunds) of $28,019.

An Imapala LT2 has an MSRP of $25,030 with an average transaction price of $22,683.

This makes the vehicles as close to equal as possible. That said, a retained value of 65.7% of the Camry's transaction price of $28,019 equals $18,408. A retained value of 58.2% for the Impala's transaction price of $22,683 equals $13,202. The Camry cost $5336 more new and is worth $5206 more three years later.

Once again, there are some features / options that are not available on both models, but that is what the free market is for. The great thing for the consumer is that they have very good options to choose from. The Camry is quicker (1 sec faster 0 - 60) and better handling, but the Impala offers more interior room and a lot bigger trunk. Customers are obviously pleased with both models, as the consumer ratings on edmunds.com are almost identical- 8.5 for the Camry SE V6 and 8.7 for the Impala LT 3.9.

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The "18/29" that you stated is for the 211hp 3.5L. The 3.9L with 233hp is 17/25. I've averaged over 30mpg on a Sonata V6 with 4 people (it actually was over 40mpg for a little while), but that was on a pure highway trip too.

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XJ,
Where are you getting the 17/25 figures from? For '07, the EPA rated the Impala 3.5 V6 at 21/31, the 3.9 V6 at 20/29 and the 303 HP 5.3 V8 at 18/27.

Here's the numbers for 2008 with the revised EPA testing method.

Camry 2.4 I-4 21/31 3.5 V6 19/28
Impala 3.5 V6 19/28 3.9 V6 18/28 5.3 V8 16/24
Sonata 2.4 I-4 21/31 3.3 V6 19/28

V6 for V6, there's basically no difference in gas mileage between the Camry and Impala- or the Sonata. You do have the option of burning E-85 in the Impala 3.9, though.

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Of course a used car buyer wants a low resale value. However, the list of highest resale values is useful for new car buyers who want their vehicles to retain value. By looking at this list, I see the most reliable, desirable used cars on here. Personally, I would rather pay 68% of the original price of a (three year old) 2004 Honda Civic than 58.2% of the original price of a 2004 Chevrolet Cavalier. Why? Because the Cavalier is ruddy boring, unsafe, and generally awful, while the Civic is fun, safe, and, with a manual transmission, pretty sporting. I'm no import fanboy, but I see most of the companies that put out the best products on that top ten list.

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People who buy new, based on high resale value claiming to be fiscally responsible and then turn around a dump their car in 3 years or so are really being fiscally irresponsible. I drive my cars into the ground with hundreds of thousands of miles on them, so resale is essentially meaningless.

Many people pay more for the higher resale value car to begin with and then pay finance charges on top of that, making resale a really meaningless figure.

For those who care about resale, you should also look at resale value in your geographic area. A Toyota will have much better resale in say California than in Michigan where domestics still have 85% market share. The opposite would be true for say a Chevy.

Some of the cars holding their resale aren't necessarily the longest lasting cars either. Nissan in the top 10? Mini? These cars are quite problematic when compared to other cars without good resale.

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"..while the Civic is fun, safe, and, with a manual transmission, pretty sporting."

Fun? it's an underpowered. cramped econobox

Safe? Take a look at the accident stats sometime, it's a tinny little accordian, a widomaker.

Sporting, oh yeah, the whole fart can & clear tail light lens thing.

No, it's junk, a disposable car with sheetmetal so thin it ripples (like almost all Japanese cars) under the pressurized spray from a self-service car wash, with lots of unpainted metal surfaces where most don't look (under the trunk lid, etc).

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To the above post; Wow. Just wow. This is pretty ignorant for someone to say. Considering that the Civic is more sporting, fun and better looking compared to its domestic competitors, i wouldn't say much. Also, the Civic has more standard airbags and standard ABS than its domestic competitors. The car itself may crumple but its the safest in its class with 5/4 star crash ratings across the board. Thinner sheetmetal allows for lighter weight which means better fuel efficency and performance, but the Japanese have also maintained or exceeded its competitors in safety. Just because a car has heavy sheet metal doesn't mean its safer.

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aerith, the Civic is safer against a vehicule of the same size but what about a slightly bigger vehicule? I spotted on Youtube, a video of the Mazda 3 vs the Euro Civic hatchback and a older test of a 92 Civic vs a 4x4 Mitsubishi
http://www.youtube.com/watch?v=LNxOUs-6tTo
http://www.youtube.com/watch?v=m_86RuYXoJA

then in Quebec, Canada the Civic is in the top 10 of the most stolen vehicules which means a bigger insurances rates

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