How to Determine the Residual Value of Your Car

Posted: Thursday, August 9th, 2018

Residual value is determined by multiplying the MSRP by the estimated depreciation value. For example if your car is originally valued at $20,000 and the depreciation is 50%, then the residual value would be $10,000.

When Leasing

It is especially important to know your a car’s residual value when leasing. If the car has a low depreciation rate your monthly payments will be lower and at the end of the lease the residual value will be higher. This is important to know if you are considering purchasing the vehicle at the end of the lease.

When Owning

If you own the car, determining residual value will help you better estimate the resale value. Of course, when it comes to resale value there are other factors to consider, such as the vehicle’s condition and the current market price. Independent companies such as Kelley Blue Book are a good source for finding out about depreciation and resale value. Taking good care of your car will increase both its resale price and trade in value.
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Whether you intend to purchase or lease your next car Green Light Auto Credit is here to help you make an informed decision. Our auto finance experts can assist you in securing the financing that suits your needs, no matter what kind of credit you may have. Call us at (800) 200-5551 if you have any questions or apply for financing online.