When you’re looking to lease a car, a key factor to consider is the vehicle’s residual value, or what it will be worth at the end of your lease term.
As you compare models, you may wonder what the 2016 Hyundai Accent’s residual value will be when your lease ends. Will the Accent hold its value well, or will a competing vehicle like the 2016 Honda Fit offer greater residual value?
Why Residual Value Matters
Simply put, when a consumer leases a vehicle, the amount of money the car is worth at the conclusion of the lease term is its residual value, or the value it has retained since the lease began.
Residual value directly affects a driver’s monthly lease payments, and the residual value is also the price the driver may buy the car for when the lease ends.
To illustrate, if a consumer leases a car that is worth $25,000 brand new, and it is anticipated that the vehicle will be worth $15,000 at the end of the lease term, that $15,000 of retained value is the car’s residual value.
Continuing the example, the $10,000 in value lost during the lease term is essentially what the driver pays for over the course of the lease. When the lease payments are calculated, that projected value loss is used to determine what the monthly payment will be. For a car that will lose approximately $10,000 in value during a 36-month lease, the monthly payment is calculated by dividing $10,000 by 36 months, which equals out to $277 per month, plus associated interest, taxes, and fees.
If a driver so chooses, he or she can typically purchase the car at the end of the lease for the residual value amount—in this case, $15,000.
In terms of residual value, the Fit far exceeds the Accent.
In comparing the residual value of the Fit and the Accent at the base model level, the Fit is expected to retain 56% of its value following a 36-month lease, according to data from ALG. By contrast, the Accent is anticipated to retain only 43% of its residual value after 36 months.
For a 60-month lease, the Fit is projected to retain 42% of its value after 60 months, compared to only 27% value retention for the Accent.
Enjoy High Value Onboard the Fit
Drivers can learn more about the 2016 Honda Fit at any West Michigan Honda Dealers location.
Visit any of our affiliated dealerships today to get an up-close look at this impressive model and take it for a test drive.