VW leads in resale value; hybrids don't make top 10

L.A. Times Archives

Nov. 14, 2007 12 AM PT

Times Staff Writer

Fuel-sipping hybrids get a lot of hype these days, but when it comes to resale value, one study says they take a back seat to more prosaic vehicles such as the Volkswagen Rabbit and Toyota Corolla.

Not a single hybrid is among the top 10 models selected by Kelley Blue Book in its latest survey of projected resale values for cars, sport utility vehicles and pickup trucks, which is due to be released today.

German automaker Volkswagen, which doesn’t sell a hybrid model in the U.S., came out tops in the annual ranking by the Irvine-based auto data firm. VW, with three vehicles in the top 10 resale rankings, displaces Honda, which comes in second this year.

Some hybrid models such as the Toyota Prius continue to be strong sellers, even in a year when overall U.S. auto sales are down.

At the same time, the rapid proliferation of hybrids has taken away some of the “scarcity premium” the cars once enjoyed on the used-car market.

“There continues to be strong interest in new and used hybrid vehicles,” said Jack Nerad, a Kelley analyst. “But as more hybrid models come into the marketplace and more hybrids are available as used vehicles, we expect the market to soften some.”

In addition, many of the hybrids being introduced are pickups and SUVs that provide better mileage than their regular versions but nowhere near the 40-plus miles per gallon the Prius and Honda Civic hybrid can deliver.

Chrysler, for example, is unveiling two hybrid SUVs -- the Chrysler Aspen and Dodge Durango -- at this year’s L.A. Auto Show, which opens to the public Friday. General Motors Corp. is debuting a hybrid version of its Chevy Silverado pickup.

On average, most cars retain 30% to 35% of their original value after five years, said Robyn Eckard, a spokeswoman for Kelley. Hybrid resale values are typically above that, she said, but have been slipping.

Kelley projects in this year’s study that the Prius will retain about 42% of its original sale value after five years. That’s down from about 47% in last year’s study, Eckard said.

Used Prius and Civic hybrids that have California carpool lane stickers have been selling for a premium, though that could stop if the law authorizing the stickers isn’t renewed before they expire on Jan. 1, 2011.

Batteries are also an issue. The first Priuses were sold in the U.S. seven years ago and some are nearing or past the 10-year or 150,000-mile factory warranty on their expensive battery packs. Buying a used hybrid and then having to spend $3,000 to $3,500 to replace the battery pack could be painful, although that hasn’t persuaded Prius owner Annie Folger of Mountain View, Calif., to consider a trade-in.

“My Prius has been absolutely trouble free since I got it in January 2002,” she wrote in an e-mail. “I just drove to San Francisco yesterday and got 49.2 mpg. Replacing the battery pack is a small price to pay for such a great car. I’m keeping it!”

Both Toyota and Honda, which began selling its Insight hybrid in the U.S. in December 1999, say that battery pack failure hasn’t been a problem. And a spokesman for Toyota said resale values for Priuses, after softening this year, rebounded as gas prices soared back above $3 a gallon and stayed there.

Data from Edmunds.com show a similar trend, with price discounts on many hybrid models, including the Prius, shrinking last month after rising in the spring.

Volkswagen took the crown for best overall resale value even though some of its cars have received poor reliability ratings from Consumer Reports.

“What this shows is that enthusiasm for a particular model can trump fears about reliability,” said Kelley’s Nerad.

The top of the best-resale-value rankings is dominated by imports. The Chevrolet Corvette is the only domestic model to crack the top 10.

martin.zimmerman @latimes.com

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Keeping their worth

These vehicles, listed in alphabetical order, are projected by Kelley Blue Book to have the best resale values five years from now.

* Chevrolet Corvette

* Honda Civic

* Infiniti G37

* Mini Cooper

* Scion tC