Why Used Toyotas And Hondas Are So Expensive

Summary

Toyota and Honda, often viewed as producing 'boring' cars, excel in retaining value due to their focus on quality, reliability, and strategic production practices. Both brands have low incentive spending, minimal fleet sales, and limited leasing, contributing to higher resale values. Despite facing challenges with the transition to electric vehicles and recent recalls, their reputations for durability and customer loyalty remain strong. However, with emerging competition and shifting consumer preferences, they must adapt to maintain their positions in a rapidly evolving automotive landscape.

Takeaways

• 😀 Toyota and Honda are known for reliability but often labeled as boring compared to flashier brands.
• 🚗 Toyota has consistently topped resale value rankings, thanks to its strong demand and controlled supply.
• 🏆 Lexus and Toyota have won multiple awards for resale value and dependability, outperforming competitors.
• 💡 Both automakers prioritize customer satisfaction and durability, avoiding excessive incentives and fleet sales.
• 📉 Toyota's low inventory levels contribute to higher resale values by creating a supply-demand balance.
• 🔧 Toyota's Production System emphasizes quality control and efficiency, allowing it to maintain high standards.
• ⚡ Both brands are adapting to the EV market but face challenges in transitioning quickly compared to competitors.
• 👥 Customer loyalty is high for both Toyota and Honda, despite some recent blemishes in reputation due to recalls.
• 🌱 Toyota and Honda lead the hybrid market, benefiting from strong consumer interest and resale values.
• 🛠️ The automotive landscape is evolving rapidly, with new competitors and technologies threatening established players.

Q & A

What common perception do Toyota and Honda face regarding their vehicles?

Toyota and Honda are often perceived as making boring cars, which has frustrated their leadership, particularly at Toyota.

How do Toyota and Honda perform in terms of vehicle resale value?

Toyota consistently ranks at the top of Kelley Blue Book's best resale value list, while Honda also performs well, with both brands maintaining high resale values compared to competitors.

What factors contribute to the strong resale values of Toyota and Honda vehicles?

Their vehicles hold value due to high demand exceeding supply, low incentive spending, and minimal reliance on fleet sales, which generally dilute resale values.

How do Toyota's and Honda's inventory strategies differ from other automakers?

Toyota and Honda avoid excessive incentives, fleet sales, and leasing, which can lower resale values, focusing instead on maintaining a balance in their inventory.

What is the significance of the Toyota Production System?

The Toyota Production System emphasizes efficiency and waste reduction through just-in-time production, allowing Toyota to meet demand without overproducing.

In what ways have Toyota and Honda been criticized?

Both companies have faced criticism for their slow transition to electric vehicles and have been involved in recent safety data scandals and recalls.

How do Toyota and Honda's reputations for quality impact consumer behavior?

Consumers are willing to pay more for Toyota and Honda vehicles due to their strong reputations for reliability, durability, and quality.

What challenges do Toyota and Honda face in the current automotive market?

They face competition from upstart brands and evolving technologies, particularly in the electric vehicle sector, where they have been slow to adapt.

How do resale values of hybrid vehicles compare to traditional gas vehicles?

Hybrids tend to have better resale values than traditional gas vehicles, holding approximately 72% of their value compared to 65% for gas cars.

What unique challenges do automakers face when attempting to increase vehicle sales?

Automakers need to balance production with demand, as overproduction can lead to diminished resale values and excess inventory costs.