07′ Toyota Tundra Resale Value Jumps 17%

According to a recent press release issued by Edmunds.com, used car values are climbing. The reason? A lack of new vehicle production in 2008 and 2009 has led to an artificially shallow pool of used vehicles to choose from. This is good news for late-model vehicle owners everywhere…it’s been estimated that used car values will continue to climb for the next year or two.

Tundra resale value continues to lead the truck industry

What’s particularly interesting is that Edmunds.com found 07′ Tundra resale value jumped 17% between September 2009 and September 2010. This increase is significantly higher than the rest of the large truck segment – which only increased 9%.

Why did Tundra resale values increase? Probably for the same reasons that Tundra resale value has always been excellent: consumers trust Toyota quality and reliability, and because Toyota doesn’t issue massive cash rebates to help sell trucks like Ford, GM, and Chrysler-Fiat.

Rebates Kill Resale Value

Let’s say we’re at a Ford dealeship, it’s August 2010, and that they have a nice little 2009 Extended Cab F15o XLT with 12k miles. Every August Ford has their annual “Ford Truck Month” sale, during which the manufacturer offers some incredible rebates on brand new 2010 trucks…as much as $7500 this year. If we’re considering buying a used 09′ F150, our expectation is that we’ll get a nice discount compared to a new truck. If the new ones are going for $25k after rebate, what’s a used one worth?

Now let’s pretend we bought that 2009 model without a massive cash rebate (a lot of Ford owners do). How much money do we lose?

While there are a lot of “what if’s” here, the point is clear: big cash rebates (be they from Ford,GM, or Chrysler-Fiat) hurt resale value a lot on late model used trucks.

What Toyota Does Differently To Get Better Resale Value

First, Toyota refrains from huge cash rebates. While there were definitely some exceptions to that rule in 2008 and 2009 (when every manufacturer was desperate), Toyota typically emphasizes free financing instead of cash rebates. 0% financing is expensive – more so than large rebates – but it helps preserve resale value.

Second, Toyota matches production to demand. While Ford and GM compete to see who can sell the most trucks, Toyota worries about building the right amount of trucks to keep from having to “dump” vehicles on the public at the end of the model year. Toyota isn’t chasing any sales crowns, so they don’t have to give away trucks to try and hit some quota.

Finally, Toyota isn’t nearly as dependent on fleet business as Ford and GM are to sell their half-tons. In the October 4th edition of Automotive News, it was reported that 34% of Ford’s business through September 2010 was fleet business. GM was just behind at 31%, and Chrylser-Fiat led the pack with 39% fleet sales. Fleet sales hurt resale value because most “fleet” business is rental car companies…and they dump hundreds of low miles trucks onto the used vehicle market every month.

At Least Three Great Reasons to Buy A Tundra

1. Resale value. Even if you plan on keeping your truck forever, resale value is important. God forbid, but somehow your truck could be totaled, or something could happen and you might have to sell it. You want a truck with resale.

2. Safety. The IIHS rates the Tundra as a top pick. The only other truck to get this rating is the F150.

3. It meets or beats all competitors in most respects. The Tundra has equivalent power, same or lower up-front costs, towing and hauling capacity, luxury features, etc. Toss in great reliability, Toyota’s commitment to honest tow ratings, and free maintenance for 2 years, and the Tundra is really a pretty obvious choice.

If this sounds like a Tundra commercial, I’m sorry. It’s just obvious to me that the Tundra is a smart choice, if for no other reason than the industry-leading resale value.

Comments? I mean no offense to other truck owners…just saying that the smartest buy is the Tundra in many cases.