Hyundai and Nissan Residual Values Could Drop Due to Increased Fleet Sales

For a long time, fleet sales had been dominated by GM, Chrysler and Ford. (Fleet sales are those made to government and commercial enterprises such as rental car companies).

Fleet sales tend to hurt residual values because cars sold to fleets usually end up on the auction block as used vehicles after a short period of time.

Since there's a lot of these cars coming up for sale, it drives down the prices.

Car buyers who purchase vehicles that are sold heavily to fleets can expect the value of their car to drop very fast, as has been the case with many Chrysler and GM cars that are mainly used as rental cars. This has hurt GM and Chrysler and so they've been cutting back on sales to fleets.

The largest seller of fleet vehicles is now Hyundai followed closely by Nissan. The percentage of cars sold to fleets is 34% for Hyundai and 29% for Nissan. As a comparison, only 15% of GM vehicles are now sold to fleets.

This will probably hurt residual values so it's a good idea to keep this in mind if you're considering buying a Hyundai or Nissan (and you don't plan on keeping the car for more than 5 years).

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