Top 3 Car Brands to Buy or Lease with Best Residual Value
Top 3 Car Brands to Buy or Lease with Best Residual Value / Resale Price in India
We are in the year 2021 and the last year has been a year full of nuisances and restrictions – thanks to Covid-19. Social distancing has become a new normal and seems to remain a part of our daily routine. That puts a big question mark on the mode of transport we use to commute to our offices and workplaces. There is a big contention about sanitization and again, social distancing. Personal transport comes out as a great option in today’s age but that too comes with its disadvantages – servicing, insurance, EMIs, tax impositions, fuel costs to name a few.
A car’s residual value i.e. the estimated future value considering the depreciation of the car after an assumed years of usage is important to consider at the time of car purchase or leasing, because it helps you to determine the actual cost of ownership or monthly rental.
It is important to choose a car which will hold its value so that it can be sold at a higher price in the used car market after 4-5 years of use. Depreciation is the single costliest aspect of car ownership.
Some of the key factors that affect the Residual Value or Resale Price of a Car are
Long Term Reliability - Everyone wants a car that has fewer breakdowns and low maintenance & repair costs. Car brands and models that are likely to break down often and develop serious issues after 3-4 years of ownership (once the manufacturer’s warranty has expired) have a lower demand in the used car market and hence have low residual value.
Quality - Cars with better built quality last longer and hence commands a higher residual value as it is worth more for the second hand car buyers
Market Demand - Incase a car model or brand is popular, it will have a higher resale price in the used car market even after 4-5 years of use as compared to a similar price new car which is not very popular.
We tell you the top 3 car brands who’s cars generally have higher residual value based on their good reliability, quality and demand in the Indian Market.
Maruti Suzuki India Limited
Maruti Suzuki India Limited (MSIL) is the most popular carmaker in the Indian market. Even today, the Japanese carmaker covers over 50% of Indian car sales every year with some hot-selling models like the Alto, Swift, Baleno and Dzire. One thing which remains common with all the Maruti Suzuki products is reliability, hassle-free experience and cheap maintenance costs. As MSIL is the biggest carmaker in India, it’s evident to have a ton of options in the car leasing space as well. You get options from the base Alto to the premium offerings like Ciaz and S-Cross. The residual value of all the Maruti Suzuki cars is compelling in the pre-owned car world but we still recommend you stick with the popular nameplates.
You can go with the Swift petrol eyes closed as it offers a fuel-efficient and refined petrol engine, cheap running costs, segment-best fuel economy and zippy handling. The Swift is one of the most popular choices in the pre-owned market and you can get good residual value too. Same goes for the Maruti Suzuki Baleno, Ciaz, Vitara Brezza and Dzire. If you choose any of the aforementioned cars, you can enjoy lesser depreciation rates than their respective rivals and more fuel efficiency along with cheaper servicing costs.
Hyundai Motor India Limited (HMIL)
Hyundai Motor India Limited (HMIL) is the second biggest car maker in the Indian market after the market leader - MSIL. Hyundai Motor India Limited (HMIL) started its innings in India with the Santro and that helped the Korean brand to gain good traction. The Santro turned out to be a workhorse and secured good residual value in the market. That is continued with other offerings from the brand as well. New age cars like the Grand i10, Grand i10 Nios, all-new i20, Creta, and Verna secure good market share in their respective segments. You can go with any of the aforementioned cars – whether new or leased.
While the Grand i10, Elite i20 are now discontinued, they still hold a considerable share in the leased and used car space. You can get great residual value with the Hyundai Creta diesel, Elite i20 P/D, Grand i10 P and Verna 1.6 Diesel. The maintenance of Hyundai Cars is in line with the Maruti Suzuki cars and also comes out cheaper for some specific models. However, Hyundai cars are still a notch down than the Maruti Suzuki cars when it comes to the residual value.
Honda Cars India
Honda Cars India is the most renowned car maker – not in India – but around the globe when it comes to petrol engines. They have a huge fan following for the V-TEC engine range and we got the chance to taste that in India too. Honda Car India offers some good quality products, but the crown is taken by the Honda City. A mid-size sedan for the average Indian customer; offering comfort, space and economy in one great package. The fourth-gen City has been around for a long time and Honda recently launched the 2020 Honda City. The new Honda City comes with both i-VTEC and i-DTEC engine options whereas the petrol also comes with a 7-step CVT. Even today, the third-gen and fourth-gen City hold great residual value in the used car market thanks to the bulletproof reliability and quality. As we stated earlier, Honda engines are known for their refinement, fuel efficiency and cheap maintenance.
Honda Amaze which is a Dzire-rivaling sub-compact sedan is also a great option to consider. The new Amaze sets a benchmark when it comes to the hassle-free driving experience, comfort and reliability. Another highlight of the Honda Amaze is the option for the diesel CVT which is not only the first in the segment but also the most sensible choice. If you are considering any Honda car, we would highly recommend you to go with the petrol offerings as that’s the forte of the Japanese carmaker. Honda Car India has been facing some tough competition from its rivals and the market share has dropped drastically. Things for Honda are expected to improve with the new City and the upcoming HR-V and sub-compact SUV. The new HR-V will sport a technologically-advanced hybrid powertrain and we will also get to see the same powertrain with the City Hybrid too.
So there you have it, Maruti Suzuki, Hyundai and Honda Cars India have succeeded the test of time to become the most dependable car brands in the Indian market. As they say, it’s not the name but the product which decides the fate of the brand in the Indian market. It is also worth mentioning that our homegrown carmakers like Tata Motors and Mahindra & Mahindra are also on the right path with a great line of products. However, both the homegrown carmakers are yet to reach the reliability and quality levels of the top 3 car brands mentioned above.
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