2014 Cadillac CTS assigned with 48-percent residual value

Article by Anita Panait, on October 11, 2013

General Motors is hoping that the relatively strong residual value of its 2014 Cadillac CTS would help it sell more of the redesigned luxury sedan. The ALG research firm assigned last week an average forecasted residual of 48 percent after 36 months to the CTS – stronger than the average residual value of its peers (46 percent) and the residual value of the 2013 CTS (41 percent).

The 2014 CTS models are expected to cost between $6,000 and $16,000 more than comparable 2013 models. Eric Lyman, ALG's vice president of residual value solutions, remarked that, typically, nameplates whose prices have significantly surged do not retain their resale values well. He remarked that the residual value of the CTS didn’t go down despite higher prices thanks to the improvements made on the new generation.

Lyman, however, said that he is unsure whether Cadillac will be able to command those prices without resorting to incentives that may damage the brand's value.

He, however, said their concern is that “a CTS customer looking to trade in or whose lease is up might not know how much better the performance is.“ Residual values are typically used by lenders to set monthly lease payments. If a vehicle has a higher residual, it will be worth more when the lease is up. This allows a lender to set a lower monthly payment.  

Cadillac spokesman David Caldwell has said that for 2013, leases accounted for 40 to 50 percent of Cadillac's sales. Cadillac, however, is still is finalizing its CTS lease program, which according to Caldwell, will be “competitive with the big players in the segment." Dealers quipped that a competitive lease program will be crucial for strong sales of the 2014 CTS due to the big price hike.

The new Cadillac CTS sedan is inspired mainly by the highly-successful ATS sport sedan and its rear-drive high-performing platform. Through this latest offering, the brand will now be able to enter the prestigious midsize luxury sedan segment. Since it is projected to be the lightest model in the segment, it will allow this class to have a vehicle that will deliver the most agile of driving dynamics.

Performance meanwhile is highlighted by the wide array of power-dense powertrains like the twin-turbo engine and the automatic eight-speed transmission paired to it. The third generation of the brand’s landmark sedan reveals lower and longer proportions and one that has a more athletic appearance. Cadillac disclosed that the new CTS also shows an evolution of the brand’s very own Art & Science design principle.

Both the overall length and wheelbase have been extended with the former having an additional 5 inches (127 mm) and the latter an extra 1.2 inches (30 mm). However, the roofline was lowered by 1 inch. The cowl, which is the windshield’s base, is also lower by the same amount. Overall the new dimensions are able to complement the fact that the exterior of the new CTS is longer and thus highlight the lean visuals.

Global Cadillac Vice-President Bob Ferguson said that the new 2014 Cadillac CTS is equipped with the most advanced technology, displays crafted design, and deliver exciting performance. He added that this model has long been the centerpiece of the brand and is able to both literally and figuratively change the best models in the world. Ferguson continued by saying that the ever-increasing product credibility has allowed the brand to grow globally and with the CTS, Cadillac will be able to bring itself to a whole new level.

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