If you’re looking to lease a car, “residual value” is a term you should get familiar with in a hurry, as residual value directly impacts the terms of your lease, such as your monthly payment.
Residual Value Rundown
In simple terms, residual value is the amount of value that is left over. In the case of an automotive lease, residual value is how much value a car will retain at the end of a lease term.
If, for example, you lease a new car with a sticker price of $30,000, and it is estimated that the car will lose approximately $10,000 of its value by the conclusion of a 60-month lease, then the $20,000 of value that remains at the end of the lease is the residual value.
Residual value is used to calculate your monthly lease payments. Continuing the example, if the car you’re leasing will lose $10,000 of value over the course of your 60-month lease, then you will essentially be paying for that lost value.
Residual value also plays a part in the final purchase price of a leased vehicle. If, at the end of the lease term, you decide you’d like to keep the car you’ve been leasing, the final purchase price is typically the residual value amount—$20,000 in the case of our example—plus taxes, fees, etc.
Honda Fit vs. the Competition
Now that you have a basic idea of what residual value is and how it impacts your lease, let’s examine how a popular model like the Honda Fit fares in the realm of residual value against its rivals.
ALG estimates that the 2016 Fit will retain an impressive 57% of its original value following a 36-month lease and 43% of its value at the conclusion of a 60-month lease.
In comparison, here is how some of the Fit’s top competitors weigh in:
- 2016 Hyundai Accent GS hatchback: 43% residual value after 36 months, 28% after 60 months
- 2016 Ford Fiesta S Hatchback: 43% residual value after 36 months, 30% after 60 months
- 2016 Kia Rio LX hatchback: 43% residual value after 36 months, 30% after 60 months
- 2016 Nissan Versa Note S: 46% residual value after 36 months, 30% after 60 months
- 2016 Volkswagen Golf TSI: 46% residual value after 36 months, 31% after 60 months
- Toyota Yaris L 5-door: 49% residual value after 36 months, 36% after 60 months
- 2016 Kia Soul: 49% residual value after 36 months, 37% after 60 months
- 2016 Mazda3 i Sport hatchback: 52% residual value after 36 months, 36% after 60 months
Check Out the Fit for Yourself
Drivers can explore the outstanding 2016 Honda Fit and see how much more it has to offer over its impressive residual value by visiting any Hampton Roads Honda Dealer. Get behind the wheel for a test drive, and we think you’ll be as impressed by this small but mighty hatchback as we are. Stop in and see us or contact us today!