Do American-Braned Cars Retain Their Value Better Than Japanese-Braned Cars in the USA?
When it comes to purchasing a used car in the United States, one common belief is that American-branded cars have worse resale value compared to their Japanese counterparts. This perception is often rooted in the reputation and market positioning of these vehicles. However, the actual resale value story is a bit more nuanced than it seems at first glance.
Initial Perception: American Cars as Lower Value
American cars are generally available at lower purchase prices when compared to Japanese cars, especially as used vehicles. This is often the first point of comparison that many consumers consider. However, this lower purchase price does not necessarily translate to worse resale value.
For instance, a 2017 Ford Focus can be purchased for approximately $3500 less than a Toyota Corolla. Despite this, there are instances where the resale value of these vehicles is comparable, if not similar. This is because American-made cars are often produced for lower initial costs as well, meaning the cost disparity in resale value may not be as pronounced as it seems.
Reputation and Market Perception
The reputation of American-made cars is often cited as a reason for their potentially lower resale value. Many consumers believe that smaller American cars suffer from a stigma that affects their resale value. However, this reputation is not limited to used cars. It also influences the initial purchase price, leading to lower upfront costs for buyers. This disparity in initial purchase and resale can often be narrowed when compared side-by-side.
Market Share and Brand Recognition
Despite the reputation issue, statistics show that some American car brands, such as Toyota, Honda, Nissan, and Subaru, often have the best resale value. These companies are known for producing reliable and durable vehicles that are not only well-rated by consumers but also maintain a strong resale value. It is important to note that many of these brands are actually American or part of larger American companies, such as Toyota and Honda, with significant American manufacturing presence. Furthermore, 46% of all cars sold in the USA are from these brands.
For most Americans, these Japanese-branded cars are recognized and appreciated as American vehicles. This recognition is driven by the strong manufacturing and distribution networks in the USA, which contribute to the comparable resale value of their vehicles.
According to a car value website, a comparison of 2015 models such as the Chevy Cruz, Honda Civic, and Toyota Corolla shows that the Civic is priced at $750 more than the Corolla, and the Corolla is priced at $3363 more than the Cruze. This price discrepancy is largely due to the reputation and brand recognition of the vehicles. Despite the higher initial cost, the Japanese brands generally retain their value better, which is well deserved and acknowledged in the market.
Conclusion
While it is true that American cars are often available at lower initial purchase prices, the actual resale value is not as much of a disadvantage as the reputation might suggest. Brands like Toyota, Honda, Nissan, and Subaru, which are often considered Japanese, actually have a strong presence in American manufacturing and are highly regarded for their resiliency and reliability. Therefore, when choosing between a American-branded and a Japanese-branded car, resale value should not be the sole deciding factor, as it often is comparable or even better with the latter.