Residual Value Honors Give Dealers Competitive Edge

Lexus and Honda topped the U.S. ALG (Automotive Lease Guide) Residual Value Awards again this year. While consumers may not want to dig into the details of what makes for a high residual value, dealers can use the information to market models to consumers looking for a car that holds its long-term value.

“A vehicle that wins an award is most likely going to have an advantage over other vehicles,” Danny Battaglia, managing director of ALG customer success at J.D. Power, tells WardsAuto. “In that segment, you're going to depreciate less, and your monthly payments are going to be lower, and that would drive demand and sales.”

The U.S. ALG Residual Value Awards recognize vehicles projected to hold the highest percentage of their manufacturer’s suggested retail price after three years of ownership.

For model year 2025, 311 models were evaluated by analyzing used-vehicle performance, brand outlook and product competitiveness. This year, 16 brands received awards in 33 model-level segments.

Lexus received five model-level awards, Toyota received four and GMC, Honda, and Subaru received three each.

Synonymous with Good Quality

Hyundai Motor America put out a press release touting its Kona electric SUV’s winning of the J.D. Power 2025 Best-in-Class Residual Value Award in the program's newly introduced Mainstream EV SUV segment. The automaker also touted the Hyundai Santa Fe’s and Ioniq 6’s second-place honors in their respective segments.

The residual value award is more of an industry-level award, says Battaglia, but “from a dealer perspective, having marketing aspects at the dealership showing an award could help drive sales.”

Valley High Toyota in Victorville, CA, advertises the brand’s 2024 Residual Value Award wins on its website and explains the award's meaning.

Toyota has few purchase incentives for its models, yet sales are still strong, says Battaglia.

Winning a Residual Value Award connotes vehicle quality, he says. Good product and discipline on the part of the manufacturer — not building too many vehicles are the hallmarks of a model with high residual value, and in those areas, “Toyota does a good job.”

Promoting What Resonates with Consumers

Marketing a high residual value can work with a subset of consumers who understand financial concepts and can use those factors to determine the best overall value, Mark Osmers, executive director of marketing at the Rusnak Auto Group, tells WardsAuto.

Based in Southern California, Rusnak includes Audi, Porsche, Bentley, Rolls-Royce, Volvo, Sprinter, Ineos Grenadier, Land Rover, BMW, Mercedes-Benz, Genesis and Hyundai franchises.

“When considering the total cost of ownership, ALG Residual Values become relevant. Cost of ownership includes payment, insurance, fuel, maintenance and depreciation,” says Osmers.  “A higher residual value translates to less depreciation.”