Recent new-vehicle incentives are having less of an impact on predicted residuals and used-vehicle prices than in the past.
Typically, industry analysts have warned that a dollar in new-vehicle incentives can knock a dollar off used-vehicle values for the same model.
"I've been one that has spent a lot of time telling people about the impact new-vehicle incentives have on used-vehicle transaction prices, and for it not to happen is a bit of an enigma," says Tom Kontos, executive vice president for ADESA Auctions.
Toyota is the best example of a brand that largely is getting away with an increase in new-vehicle incentives without a correspondingly large impact on its used-vehicle values or residuals, says Matt Traylen, chief economist for Automotive Lease Guide.
Across the industry, incentives are moderating.
According to Edmunds.com, the average incentive in March for the whole industry was $2,742. That was down 13 percent from a record $3,165 in March 2009. The March level was an average increase of $100 from February, but General Motors Co., Ford Motor Co. and Chrysler Group incentives were all below year-ago levels.
"Incentives are not skyrocketing, even if they're up here and there. Incentives are not all-pervasive," says Kontos.
The other big reason that used-vehicle values haven't been hurt by new-vehicle incentives as much as in the past is that inventories of new and used vehicles are smaller, analysts say.