Anyone looking to park the Cadillac CT6 luxury sedan in their driveway can find brand-new units still available on dealer lots. However, customers interested in a Cadillac CT6 lease will need to pay a bit more, as CT6 residual values fell several percentage points this month.
According to a recent report from our sister publication, Cadillac Society, a 24-month / 10,000-mile-per-year lease on a 2020 Cadillac CT6 Premium Luxury 400 carried a 73-percent residual value in April, but slipped to 67 percent in May. The residual values are both from Cadillac’s captive finance arm, GM Financial.
That means that Cadillac CT6 lease deals will be more expensive for customers, which will make the large luxury sedan more difficult to sell for dealers.
For those who may be unaware, an automotive residual value is the vehicle’s estimated value after the end of a given lease. When a customer enters a lease agreement, they must pay the difference between the vehicle purchase price and the residual, as divided by the number of months in the lease, plus a few other factors.
A higher residual value means the vehicle will be worth more at the end of the lease, thus lowering the payment for the customer. A lower residual value means the vehicle will be worth less, and thus the payment is higher.
It’s unclear why CT6 residual values fell so precipitously, but it’s likely that the ongoing COVID-19 pandemic is at least partly to blame. Automakers are expected to provide massive discounts and incentives to help move units, and new car purchases are expected to tumble 50 percent this month in the U.S.
All this will undoubtedly effect Cadillac CT6 lease offers. Critically, the 73 percent residual on a CT6 Premium Luxury was higher than the 69 percent residual for a base-model CT6 Luxury, the latter of which is lower in the trim level hierarchy and carries a lower starting MSRP. That means customers were able to lease the more expensive Premium Luxury model for less than the Luxury trim.
It’s also worth pointing out that CT6 residual values originally improved over the course of the vehicle’s lifecycle, rising from 46 percent for a 36-month / 10,000-miles-per-year lease at launch in 2016, to 63 percent in April. The same vehicle has a 58 percent residual today.
For now, customers seeking a Cadillac CT6 lease will find healthy inventory, although North American production of the sedan ended in February. Although Cadillac says that a direct successor is currently not in the works, a high-end all-electric four-door most likely is.
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This post was created in collaboration with our sister publication, Cadillac Society.
Comments
Cadillac’s CT6 may even more expensive than this article suggests because there’s a possibility that China will not live up to their obligations under the deal they made with the Trump Administration which means Trump can order 10-15 percent tariffs on the CT6 this summer.
??????
Silliest post I’ve read in a while and that’s saying something.
First the CT6 is discontinued in rhe US.
Second, what does an agreement with China have to do with the resale value of a vehicle built in the US for the US market? GM does not import the CT6 from China.
Here’s my experience. In May of 19 I bought a 2018 ct6 premium luxury that had a list of 83k. I paid 52k for it with 20k miles which was about 63% of the list after 1 year. God help you if you buy these things new (or maybe God already helped you and that’s why you don’t care about 30k.)
While the CT6 Prem Lux residual dropped, from 73 to 67, that is still a pretty good residual.
That good residual seems to indicate there is a lot of profit in CT6 and limited quantities
should help it retain value.
A 2 year residual on other Cadillac models is probably in the 47-50% area.
@Art
How do you figure? How does value falling off a cliff equate to profit?
My guess is that the residual value declined because the car is out-of-production with no replacement coming. It’s a dead nameplate; the “last ever CT6!”. Buyers generally view products in this conundrum as being poor investments and thus their value, both today and projected into the future, declines as exemplified here. If it were all the fault of COVID-19, I think we’d see universal residual declines for all models and all makes.
As much as I think the CT6 is the best Cadillac in 40 years and the end of an era, especially in Blackwing form, I wouldn’t buy one at this point for the reasons mentioned above. I view it as a very poor investment as even it’s maker no longer believes in it or is willing to put money into it. If GM won’t put money into the product anymore, why would I? Why would anyone?
Before it’s all over, I would expect GM and it’s dealers to offer substantial discounts to move these magnificent but ill-fated cars.
You described the CT6 as a poor investment, but should people really be looking as cars as in investments. They’re not supposed to appreciate in value like real estate right? I think very few people consider the resale value of a new Playstation 4 or a new refrigerator when they buy them true?
You hit the bulls eye. As GM has abandoned the finest product they’ve made in decades, they need to unload them. They need to help dealers end this era by with very large incentive’s, even at a loss to get them off the lots. There needs to be no more bad press it just needs to end.
Except GM wont do that so you’ll see CT6’s on lots in 2 years… this company is completely lost..
I don’t understand this line of thinking.
Who cares if it’s not being made anymore — I want one just for that reason!
My car will be more of a standout — especially in Blackwing trim.
I guess you could make the argument that replacement parts will be more expensive but it’s not like parts for the cars will cease immediately.
Maybe I’m just too much of a contrarian to care that the CT6 is no longer being made.
That’s a plus IMO.
while I agree its a great platform,unless you plan to keep it till it dies, there will be no resale market for a dead vehicle….
Wrong.
There are lots of “Dead cars” that hold their value. CTS V Wagons for one.
The CT6 has poor resale value 2nd hand because it had little value to the market when new. Not long after it came out the subsidized “Special Lease” deals started to surface. $550 mo. Etc. That is a sign of retail weakness. A heavily discounted new car ALWAYS results in a low value used car.
The 2018 CT 6 had more options as standard than the updated CT 6 I leased a 2020 CT 6 and was shocked at the difference in the Ride, the omitted standard options, also the Navigation screen lacks Contrast, The software is painfully slow. Seat kidney side support does not keep you from sliding around. What happened to this luxury car that turned it into name only luxury The Toyota Avalon makes this car appear to be much less value.