Toyota resale values rising, Kelley Blue Book says

DETROIT

Resale values of Toyota-brand vehicles will rise at a rate below the industry average but outperform some top brands despite a spate of safety-related recalls, according to a Kelley Blue Book forecast.

In its May-June residual value guide, Kelley Blue Book predicts Toyota's three-year resale values will rise 4.2 percentage points over the same period last year.

That's below the industry average of 6.2 percentage points, but it's a reversal from February, when Kelley Blue Book lowered its outlook on current used Toyota vehicle values by 1 percent to 3 percent noting the recalls.

Toyota grew at a faster rate than its own Scion brand, as well as the Honda, Mini and Porsche brands. It also bested Pontiac and Saturn, two brands being phased out by General Motors Co.

Toyota offered big incentives such as zero percent financing and lease deals in early March in an effort to bring consumers back to the brand. Eric Ibara, director of residual value consulting for Kelley Blue Book, said in a statement that attractive lease payments can cause a larger volume of lease returns for banks and harm resale values.

"What remains to be seen is the larger volume of leases Toyota's incentives create, as the volume is what will have a detrimental impact on future residual values," Ibara said.

The incentives are driving a rebound in consideration of the Toyota brand on the Kelley Blue Book Web site, http://www.kbb.com, the company said. Consideration is higher than before the spate of recalls, the statement said.

"Toyota may finally be turning the corner," said James Bell, Kelley Blue Book's executive market analyst.

U.S. shares of Toyota were up 37 cents, or 0.5 percent, to $79.93 in afternoon trading.