High residuals on small automatics - why?

crocro

went looking for a small 2nd hand auto for a friend who can't drive manual. seems that small autos list for a large premium over their manual brethern. most options on a car seem to depreciate like stones but the auto option holds its own. why?

eg

yaris '04
manual starts from about 5k
auto starts from about 6.5k

golf '05 1.9 dsl
manual from 9.5k
auto from 11k

what's going on here?
auto option on a new yaris is 700 quid extra.

TwoShedsJackson

Because they might find some eejit who'll pay that much extra for the auto. Make a realistic offer, no-one's expecting 'list price' anyway.

TomMc

Elderly drivers. VW Golf may be more out of relative rarity on what is a popular car. On any mid size car, autos will not only lose the extra grand paid out new but a whole lot more as well. Try selling one and you will find out. And it use to be much worse before the roads became more congested and a small few started to open their minds to the world of the automatic.

TomMc

Supply and demand has to be taken into consideration as well. Small city cars (autos) will always have more potential buyers then mid sized family saloons. If they are relatively scarce this will help values to hold up as against ubiquitous manuals of the same model. Same story at the premium end of the market - auto best. Everywhere else manuals are probably up to ten times more popular and therefore saleable. Residuals directly reflect which group each falls into.

It could also be a case in the examples you are comparing, that the auto is of much lower mileage than the manual, which is quite the norm (for autos).

lifer_sean

+1 for the elderly drivers.

What do you do in a few years time when your mum has burnt out the clutch in her car for the second time in 12 months, and she is giving you an earful about it ? Answer - you buy her a small automatic that's going to be so reliable that you will never have another headache - an automatic Yaris for example. She's not going to be worried about bland styling or handling, just that it will start and get her to the shops.

VolvoMan

I think it's the other way around. Automatic transmission in small cars is a lot less desirable than it is in bigger cars.

JHMEG

Really the question is who do small cc autos appeal to. Answers would be those who aren't licensed to drive a manual, elderly people, disabled etc.

The demand is small, as is the supply. This ratio ultimately dictates the price.

frag4

there is a big demand for small auto's .My mum drives one and every few years when she is selling the phone is hopping.
1 or 2 old lady owners, low milage, mint conditon. not joking but but 50+ calls in 2 week for a auto micra is somthing else.
Also there's an add in the wanted section in the buy and sell thats been running for years looking for small auto's . He say's it for the disabled but it smell's like a dealer.

galwaytt

VolvoMan wrote: »

I think it's the other way around. Automatic transmission in small cars is a lot less desirable than it is in bigger cars.

No, it's not - it's the opposite. The reason is simple: so few people buy new small automatics, that the market for used ones (a.k.a. smaller budgets), is always under-supplied.

Another reason therefore, why a new small auto is a good choice to buy - better, and more competitive, resale market, purely based on limited supply.

I know someone with a disability (limb), who could only buy, used, and it took damn near a year iirc, to get a good small auto. They'd always be sold before they could arrange to get there.

mle1324

crocro wrote: »

went looking for a small 2nd hand auto for a friend who can't drive manual. seems that small autos list for a large premium over their manual brethern. most options on a car seem to depreciate like stones but the auto option holds its own. why?

eg

yaris '04
manual starts from about 5k
auto starts from about 6.5k

golf '05 1.9 dsl
manual from 9.5k
auto from 11k

what's going on here?
auto option on a new yaris is 700 quid extra.

reason for that there mate is because there isent many small autos in the country e.g the fiat punto auto is a very rare car so it will hold its value unlike the manual:)

colm_mcm

On Yaris's it's down to rarity, and the fact that they come in 1.0

mle1324

colm_mcm wrote: »

On Yaris's it's down to rarity, and the fact that they come in 1.0

the good thing about owning a small automatic is that they are easy to sell depending on its appearence

unkel

JHMEG wrote: »

The demand is small, as is the supply. This ratio ultimately dictates the price.

frag4 wrote: »

there is a big demand for small auto's

The demand is small, but the supply is even smaller. Hence the bonus you pay for a small car with auto transmission compared to the same car with manual transmission

As JHMEG says, the equilibrium between demand and supply dictates the price.

VolvoMan

galwaytt wrote: »

No, it's not - it's the opposite. The reason is simple: so few people buy new small automatics, that the market for used ones (a.k.a. smaller budgets), is always under-supplied.

Another reason therefore, why a new small auto is a good choice to buy - better, and more competitive, resale market, purely based on limited supply.

I know someone with a disability (limb), who could only buy, used, and it took damn near a year iirc, to get a good small auto. They'd always be sold before they could arrange to get there.

The people who would be buying a supermini with auto transmission would most likely be buying brand new. You find the majority of the market for used small cars that are a few years old is usually people who are learning to drive and therefore are wanting a manual.

You will find it hard to sell any executive car, or even a bigger engined 3 Series, if it doesn't have auto.

galwaytt

VolvoMan wrote: »

The people who would be buying a supermini with auto transmission would most likely be buying brand new. You find the majority of the market for used small cars that are a few years old is usually people who are learning to drive and therefore are wanting a manual.

I don't agree - I think they buy new because of the lack of supply of used ones !

As for the 'test/learner' thing - what's going to happen when people start doing their test(s) in Priiiiiii etc.........and as more and more cars go like that - what about stop/start systems - will they restrict you to 'auto-only' licences....???

You will find it hard to sell any executive car, or even a bigger engined 3 Series, if it doesn't have auto.

True. And too right !

TomMc

VolvoMan wrote: »

The people who would be buying a supermini with auto transmission would most likely be buying brand new. You find the majority of the market for used small cars that are a few years old is usually people who are learning to drive and therefore are wanting a manual.

You will find it hard to sell any executive car, or even a bigger engined 3 Series, if it doesn't have auto.

You will find that elderly people are more frugal with their money and would buy a used auto if they were readily available over a brand new one. Although since the NCT came out, alot of people have been duped into buying new cars every three or four years, if they can afford it. SIMI and co creating this sense that an NCT test is something you do not want the hassle of going through and best avoided at all cost. People will wise up now with the way things are. It is not the necessary evil that it is made out to be.

Anyway, I remember years ago a local dealer who had a long list of disabled and elderly clients who could/would only drive an auto. The disabled person would buy the car new, the elderly person would buy it when they traded in. And when the elderly person traded in, he had someone else with a limited budget and an auto only license or simply couldn't drive manuals to snap it up (third hand). This went on for decades. When one person traded in, he telephoned the others and subsequent deals were done. In effect he had customers lined up and cars sold before they were even had gotten round to giving the vehicles the pdi treatment.

unkel

TomMc wrote: »

I remember years ago a local dealer who had a long list of disabled and elderly clients who could/would only drive an auto. The disabled person would buy the car new, the elderly person would buy it when they traded in. And when the elderly person traded in, he had someone else with a limited budget and an auto only license or simply couldn't drive manuals to snap it up (third hand). This went on for decades. When one person traded in, he telephoned the others and subsequent deals were done. In effect he had customers lined up and cars sold before they were even had gotten round to giving the vehicles the pdi treatment.

This makes perfect sense. A disabled person can buy a modest new car VAT and VRT free. They can do this every other year. So if they trade in their car after 2 years, they get at least what they paid for it back. Customer happy. Dealer happy because he can do a profitable deal with the least amount of fuss. Elderly person happy because they get a guaranteed nearly new car a lot cheaper than a new one lists for.