You may have heard the term ‘residual value’ when talking to our novated leasing specialists about your new car, or even read it on your novated lease quote.
What is the residual value?
The residual value or RV is how much your vehicle is worth after a certain amount of time and depreciation has set in.
To calculate what your cars residual value will be, our novated leasing consultants will use your annual estimated kilometers per year and the lease term, in years, to determine what the vehicle’s depreciation will be during your contract.
When driving a car on a novated lease, the period lease payments are determined by the residual value.
It’s important to stick to your agreed upon kilometer limit per year as exceeding this will affect the residual value of your car.
When choosing what car for a novated lease, choosing a car retains its value will result in lower lease payments. Typically, more reliable, and popular cars like the Toyota Landcruiser, Jeep Grand Cherokee, and Isuzu MU-X.
Depreciation is one of the biggest expenses when owning a vehicle, often costing more than fuel, servicing, and insurance!
Depreciation doesn’t remain constant over the life of a car. Your new car will lose the largest portion of its value at the beginning of its life or first few years
Click here for our top five ways to minimise your cars depreciation!
The top 10 cars that hold their value, based on the first three-years and 45,000km of ownership in Australia based on Redbook are:
- Toyota Landcruiser
- RAM 1500
- Tesla Model 3
- Jeep Grand Cherokee
- Land Rover Defender
- Kia Stinger
- Isuzu MU-X
- Subaru WRX
- Jaguar E-Pace
- Jeep Wrangler
With the current semi-conductor chip shortages causing lengthy wait times for new cars, used car values are soaring. This too has an impact on your cars residual value and estimated lease repayments.
If you’re interested in leasing a new or used car, especially one of the models listed above, request a quote and talk to our novated leasing specialists today to receive your free quote!