Toyota and Lexus are so desirable on the Used Car Market

 

There are plenty of automakers that can build a fast car, a luxurious SUV and a vehicle packed with the latest technology. But building a vehicle that remains dependable after 10, 15, or even 20 years after being driven for hundreds of thousands of miles is a completely different challenge. This is the challenge that Toyota has been tackling head-on since they first started making cars.

 

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Toyota has a legendary quality reputation that few other automakers can match. Their vehicles may not always be the most exciting, the fastest, or the first to adopt the latest automotive technology, but there is a reason so many buyers continue to seek them out on the used-car market.

 

Toyota and its luxury brand, Lexus, have become almost synonymous with longevity and reliability. That is partially attributed to the brands’ willingness to move cautiously into new technologies and prioritizing quality above innovation. Toyota has historically been willing to let other manufacturers introduce new technologies first, observe how they perform in the real world, and then refine its own approach. While this philosophy can make Toyota seem slow to change, the fact of the matter is this is the same reason why these vehicles stand the test of time, unlike most other cars sold by competitors. The brand prioritizes being right and building something that lasts using proven techniques and processes with quality materials.

 

Toyota's Reputation Was Built Over Decades

 

As a kid I once asked the mechanic what makes Toyota so expensive on the used car market. Why don’t these cars depreciate at the same rate as most of the others? I wanted to know. He had a very interesting reply; he said that Toyota builds a car with superior materials and cost-cutting optimization does not take a front seat to engineering. He pointed out that even on advanced Lexus luxury models they have been using the same quality screws, bolts and fasteners as they have been doing for decades on cheaper Toyotas. I guess this goes to prove that the “if it isn’t broke don’t fix it” mentality really pays off over the long run.

 

However, Toyota did not develop its reputation for reliability overnight. It was built through decades of manufacturing, engineering, quality control and a corporate philosophy centered around continuous improvement. One of the ideas closely associated with Toyota is “Kaizen”, or continuous improvement. Rather than assuming that a process is already perfect, the philosophy encourages finding ways to make it better, even if the improvements are relatively small.

 

Another important concept is often referred to as "Genchi Genbutsu," which roughly translates to "go and see for yourself." The idea is that problems should be understood by observing what is actually happening rather than relying exclusively on reports or assumptions. These philosophies have had an enormous influence on Toyota's manufacturing culture.

 

Toyota is also closely associated with the Toyota Production System, which emphasizes efficiency, waste reduction, quality control, and identifying problems early. Concepts such as Just-in-Time manufacturing and jidoka, which involves stopping a process when a problem is detected, became important parts of the company's production philosophy.

 

While these manufacturing concepts may sound distant from the experience of someone shopping for a used Camry or Lexus RX, they ultimately contribute to the reason these vehicles have developed such a strong reputation. The philosophy is relatively simple: build quality into the process rather than trying to find quality after the vehicle has already been built.

 

Being fast does not always pay off in the long run

 

One criticism frequently directed at Toyota is that the company can be slow to adopt new technology. Quite frankly, I am of the opinion that Toyota is one of the very few companies that puts product engineering and long-term quality above-per unit-profit driven optimization.

 

Their conservative approach to risk-taking has stood the test of time and while other manufacturers are busy introducing new engines, transmissions and electronics, Toyota is busy working on fine-tuning and improving current technologies. While competitors may rush to market with the newest feature, Toyota has historically been more willing to wait and see how new technologies perform.

 

There is an obvious downside to Toyota’s approach. Toyotas aren’t always the most technologically impressive vehicles in their class. The interior features and infotainment systems might not be as flashy. The engine may not produce class-leading horsepower or fuel economy. The transmission might prioritize efficiency and smoothness rather than aggressive performance. Toyota knows that every new technology introduces another potential failure point. A complicated system can provide impressive performance when it works correctly, but it can also become difficult and expensive to repair as the vehicle ages. Toyota's conservative approach can therefore have an advantage for long-term ownership and is usually more desirable on the used car market.

 

That doesn't mean Toyota never introduces new technology or that everything it produces is bulletproof. Just like any car manufacturer Toyota has had its share of stumbles. Just recently the company had to issue a recall for major engine damage that may occur due to machining debris being left in the engine during the manufacturing process. This could cause significant engine damage and affect a lot of variants of the new V35A-FTS 3.4-liter turbocharged V6. While this type of manufacturing fault is uncharacteristic of the brand and what it stands for it does occur. Just like other companies, Toyota has defects and does stumble from time to time; however, this company has historically placed a high value on engineering refinement and durability above being the first to innovate and extreme cost cutting. This helped solidify the brand’s reputation as building reliable cars that can stand the test of time.

 

Toyota's willingness to invest heavily in hybrid technology is another example of its long-term approach. When Toyota introduced the Prius in 1997, hybrid technology was far from mainstream. The company spent years refining this technology while competitors took different approaches. Now Toyota and Lexus offer hybrid versions across a large portion of their lineups.

 

One of the reasons Toyota's hybrid technologies has developed such a strong reputation is that the company has had decades to refine what they started in the late 90s. This is a good example of the difference between being first and being experienced. While new technology can be impressive, proven technology can be reassuring.

 

The Used-Car Market Paints a Clear Picture

 

A vehicle’s true desirability is often revealed on the used car market as its buyers determine what the vehicle is truly worth. Let’s use a 3-year-old Toyota 4Runner TRD Pro as an example. Currently a used 2023 Toyota TRD Pro sell for anywhere between 48,000 and $52,000. The price will vary based on mileage driven, condition and options. The astonishing part comes when you realize that in 2023 the original MSRP of this car was only $54,600. This means that this specific vehicle has depreciated on average around 10% over a period of 3 years.

 

This high used value isn’t just reserved for the 4Runner; look at comparable used vehicles from different manufacturers and you will often notice that Toyota models command strong prices even when they are several years old. A used Toyota Camry, Corolla, Tacoma, 4Runner, RAV4, or Highlander can often cost noticeably more than a comparable vehicle from another manufacturer. The same phenomenon is found with Lexus. A used Lexus RX, ES, GX, or IS can retain considerable value compared with competing luxury vehicles of similar age.

 

The reason why Toyota and Lexus vehicles demand a higher price on the used car market is tied into the brands’ overall philosophy. Buyers know that a Toyota is built to last and do not shy away from buying 10,15, or even 20-year-old Toyota or Lexus models. Consumers know that even older Toyotas can still have plenty of useful life left. Keep in mind someone shopping for a used vehicle isn't necessarily interested in what the car costs when it was new. They're interested in what it is worth today and how much useful life remains. If buyers believe that a particular vehicle can comfortably reach 200,000 miles or more with proper maintenance, they may be willing to pay more for it.

 

Most Toyota and Lexus models are stuck in what can only be described as a demand feedback loop. Strong reliability creates strong demand. Strong demand supports higher used-car prices. Higher resale values reinforce the perception that the vehicle is a good long-term investment.

 

Low Cost of Ownership Drives Sales

 

Reliability isn't just about avoiding a breakdown on the side of the road. It is also about cost of ownership and helping owners avoid headaches related to unexpected repairs. Most consumers are aware of the fact that a vehicle that rarely requires major repairs can save its owner thousands of dollars over the years. Routine maintenance still costs money, of course, but there is a significant difference between replacing fluids, brakes, belts, and suspension components and facing repeated major engine, transmission, or electrical repairs.

 

Another thing that makes this brand more appealing is part availability and large aftermarket support. Toyota has sold enormous numbers of vehicles; this volume is what ensures that replacement parts are plentiful. Many Toyota models are also relatively straightforward to work on compared with increasingly complex modern vehicles. A lot of independent repair shops generally like working on these vehicles because they are considered pleasant to work on with a lower demand for unnecessary disassembly and reassembly of various systems and components needed to access to make necessary repairs. Additionally, many shops are very familiar with these vehicles, and technicians have extensive experience working on common Toyota and Lexus powertrains. This tends to make repairs less intimidating for owners and may save them money on lower billable repair time and part costs as a vehicle gets older.

 

Of course, Toyota isn't immune to the trend toward greater complexity. It is true that newer Toyota and Lexus vehicles are becoming increasingly sophisticated as well. Hybrid systems, advanced driver-assistance technology, turbocharged engines, sophisticated electronics, and complex emissions systems are now common throughout the industry. But its reputation was built during decades when many of its vehicles were relatively simple, durable machines, and that legacy continues to influence consumer perception.

 

Toyota Doesn't Always Chase Horsepower & MPG Ratings

 

Another characteristic of Toyota's approach is that the company has rarely made horsepower and miles per gallon ratings its only priority. Toyota doesn't necessarily need to be the fastest sedan in its class. Toyota SUVs don’t need to get the best MPG. This mentality is what allowed this car manufacturer to focus on balancing performance with fuel economy, reliability, practicality, and manufacturing cost.

 

While impressive performance numbers and MPG ratings can help sell cars, the brand understands that most drivers aren't taking their car to the racetrack. Consumers overwhelmingly demand something reliable, something that starts every morning, gets reasonable fuel economy, carries their family, doesn't constantly require repairs, and remains affordable to maintain. Toyota has been remarkably successful at building vehicles around those requirements.

 

In fact, some Toyota and Lexus models do not even look good on paper. For example, the 2023 Lexus GX 460. It does not have the best 0 to 60 mph time. In fact, even with the massive V8 engine, it can be described as somewhat sluggish at times. Neither does it get a stellar fuel economy, in ideal conditions you can expect about 15 MPG in the city and 19 MPG on the highway. None of these figures make the car remarkable in any way; however, this car has a significant fan base and not just in the off-roading community. This SUV is beloved by families, people with an active lifestyle, people that do a lot of towing and the off-roading community.

 

Toyota and Lexus Aren't Perfect

 

It is important not to turn Toyota's reputation into a myth. Let’s dispel the notion that any Toyota you buy is going to be a good car long-term. Toyota’s can still have problems. Certain model years have experienced engine issues, transmission problems, oil consumption, excessive corrosion, electronics failures, recalls, and other defects. Lexus vehicles can have problems as well.

 

Let’s not overlook ownership, as the condition and longevity of a used car will depend highly on its history. One thing that factors into that is ownership history. A Toyota with 180,000 miles owned by a person that neglected the vehicle and did not perform regular maintenance shouldn't automatically be considered a better purchase than a Chevrolet with 100,000 miles owned by an individual that performed all regular maintenance and services. How a vehicle was stored, driven and maintained has a massive influence on the vehicle’s long-term performance and reliability.

 

If you are in the market for a pre-owned vehicle, regardless of the make and model you choose, it is vital to determine how the vehicle was used, whether fluids were changed, recalls were performed and how previous owners treated the vehicle. These factors can have an enormous impact on the vehicle’s future and overall value.

 

This is particularly important when buying a used Toyota or Lexus simply because of its reputation. A reputation for reliability does not eliminate the need for a pre-purchase inspection or vehicle history report.

 

Confidence has real monetary value

 

Confidence in the brand is why a used Toyota often commands a premium over a similarly equipped competitor. It is why a high-mileage Lexus can still attract buyers who would hesitate to purchase another luxury vehicle with comparable mileage. And it is why certain Toyota models can retain remarkable resale value long after their original warranty has expired.

 

Companies that do not inspire long-term confidence offer good warranties as an incentive to purchase a new or certified pre-owned Kia or Hyundai. While this strategy helps other car companies push cars out the door, Toyota relies on its tried-and-true philosophy and reputation of making vehicles that people can depend on. In an industry where vehicles are becoming increasingly expensive and complicated to repair, that philosophy may be more valuable than ever.

 

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