How 5G connectivity will drive value of cars post-sale

Nearly all cars sold in the US, Europe and China now come equipped with 5G connectivity which allows automakers to preserve or enhance the value of vehicles post-sale in a manner that will alter the calculation of residual vehicle values, according to a study. 

Once all cars are equipped with 5G, the report says that automakers will be able to tap into $40 billion in annual warranty cost avoidance; consumers will see $32 billion in annual lease/loan savings; and dealers will see a $24 billion annual enhancement in revenue at the point of sale. 

The savings are above and beyond the societal gains expected from reductions in collisions and emissions, which will also be in the billions of dollars globally, according to a new study conducted by market research firm Strategy Analytics. 

The 5G connectivity in cars will directly assist and support the development of advanced driver assist systems capable of helping cars avoid collisions while facilitating self-driving vehicle operation. 

Over time, 5G connected cars will capture an increasing share of unit volume with an even faster capture of sales revenue. 

"This, in turn, will influence the economics of leasing and the market value of both new and used cars," said Roger Lanctot, Director of Connected Mobility at Strategy Analytics. 

Over time, 5G connected cars will capture an increasing share of unit volume with an even faster capture of sales revenue. 

"Until now, car connectivity was a take it or leave it value proposition for consumers," said Roger Lanctot, Director of Connected Mobility for Strategy Analytics. "5G will change all that."