Why is residual value thousands lower on Honda than Hyundai

[speeddyy]

I have a 2017 6 speed Civic Touring hatchback and am looking at getting an SI when my lease is up in April.
I just helped my niece lease a 2020 Hyundai Kona Ultimate. Just as fast as the SI (of course it doesn't handle
the same but it's fun.) It was around 2 grand more than the SI but the residual value was 20,000 and the SI
residual value is around $16,000 in Canada. The payment was around $75 less on the Kona. Looks like we
are getting screwed on the value of the honda which is supposed to be one of the best vehicles to hold value.
Hyundai's are looking much more inviting now.

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[redstang]

I have a 2017 6 speed Civic Touring hatchback and am looking at getting an SI when my lease is up in April.
I just helped my niece lease a 2020 Hyundai Kona Ultimate. Just as fast as the SI (of course it doesn't handle
the same but it's fun.) It was around 2 grand more than the SI but the residual value was 20,000 and the SI
residual value is around $16,000 in Canada. The payment was around $75 less on the Kona. Looks like we
are getting screwed on the value of the honda which is supposed to be one of the best vehicles to hold value.
Hyundai's are looking much more inviting now.

There's a whole bunch of info missing here. The residual value isn't fixed. It depends on how much the down payment is, how much the monthly payment is and how long the lease is. The residual value on a lease that is 36 months is going to be less than a 24 month lease.

 

[speeddyy]

There's a whole bunch of info missing here. The residual value isn't fixed. It depends on how much the down payment is, how much the monthly payment is and how long the lease is. The residual value on a lease that is 36 months is going to be less than a 24 month lease.

 

[speeddyy]

It's a 36 month lease with nothing down.

 

[SDAlexander8]

Look at the kbb value on a similarly priced 2017 Elantra vs a 2016 civic.
Hyundais hold no value over time.

hyundai releases their new elantras in like February of the previous year. Total scam

 

[Shred]

I have a 2017 6 speed Civic Touring hatchback and am looking at getting an SI when my lease is up in April.
I just helped my niece lease a 2020 Hyundai Kona Ultimate. Just as fast as the SI (of course it doesn't handle
the same but it's fun.) It was around 2 grand more than the SI but the residual value was 20,000 and the SI
residual value is around $16,000 in Canada. The payment was around $75 less on the Kona. Looks like we
are getting screwed on the value of the honda which is supposed to be one of the best vehicles to hold value.
Hyundai's are looking much more inviting now.

If the payment is less, then that explains why the residual is more. You've paid less against the car. Honda could give Civics away at $50 a month if they wanted, but you better believe the residual value would be sky high.

The residual isn't always market value either. You need to compare and make a smart decision, but if you drive the full limit of your lease it is usually smarter financially for you to get something newer, by conventional logic anyway, and they can sell the car as a preowned to double dip. Now, if you drive less, fall in the love with the car, don't want to pay a new lease/loan but can buy the car cash now etc etc then it makes sense to buy. Most of the time what you paid per month totaled up + the residual = the MSRP give or take.

Also cash down/trade ins don't affect the residual. That gets applied vs your monthly payment. If it got applied towards the residual, but you never bought the car, what good would that do you? You would have paid the higher monthly rate, and then basically given them free money on top of that. You can be sure that when the car goes to the preowned inventory, as long as the car is good shape it gets listed for similar value if you put $5k down at lease or $0. A 24 month lease is going to be more than 36 because the car has deprecated less.

 

[jgreen16]

There's a whole bunch of info missing here. The residual value isn't fixed. It depends on how much the down payment is, how much the monthly payment is and how long the lease is. The residual value on a lease that is 36 months is going to be less than a 24 month lease.

Wrong. The residual value is fixed, and is a percentage of the sticker price of the car. The down payment has no bearing on the residual value. The residual percentage is determined by the manufacturer.

What is correct, is that the residual is a higher percentage on a shorter term lease, since the depreciation is less on a shorter time period. Manufacturers will sometimes set the residual percentage artificially higher as a mechanism to have lower payments. They know fully well that the car will not be worth that much at the end of the lease. This is why it isn't a good deal to buy the car at the end of the lease when the manufacturer has set the residual high like that.

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