• May 14, 2009
Tipping after Chrysler LLC filed for bankruptcy, the automaker's Dodge, Chrysler, and Jeep branded vehicles are facing rapidly dwindling resale values according to a research group. In a report by the Automotive Leasing Guide, secondary values are down an average of 6% across the board for most three-year-old Chrysler vehicles.

As an example, before the bankruptcy filing, a three-year old Jeep was worth 38.4. Dodge values went from 37.3 post filing, while Chrysler values, the lowest of the three initially (and nothing to really brag about anyway), dropped from 34.8. In case you were wondering, three-year old Toyotas sell for about 45.5% of their original price.

[Source: UPI]


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  • 38 Comments
      • 5 Years Ago
      I would think resale values would be hurt anyway. After Chrysler re-emerges from bankruptcy, it will be a different company, essentially. Now with a partner, Fiat-Chrysler won't be making the same vehicles in the near-future...for the better. If I were in the market for a new Chrys/Dodge/Jeep, I'd be waiting to see what coming before making another purchase. And they'll be making (better) vehicles on different platforms, why would I get the crap they're selling now?
      • 5 Years Ago
      Ok, so in the linked article you see both 'sales price' and 'original price', implying that's what people are actually paying right now. That's pretty misleading considering the original article states it much differently.

      "in terms of the 36-month percentage residual values (dollar residual value as a percentage of typically equipped MSRP) "

      Original article:
      https://www.alg.com/FreeRVRNewsletterSpecial

      So we're basically seeing a magnified effect of what we've witnessed over the last few years. Massive up front rebates on cars affect the resale value, which is based on MSRP, not out the door price.


        • 5 Years Ago
        So what your saying is that the 28% residual for a Sebring is reflective of it's MSRP and NOT it's actuall selling price? That means the real residual for a Sebring vx it's actual selling price is probably in the 30% plus range.

        I guess the opposite would be true. If you bought a formerly "hot" car, like a Toyota Prius and paid $3000 over MSRP, then you would not get 45% of that price but 45% of the MSRP. Meaning that your actual residual compared to your actual buying price would be lower than 45%.

      • 5 Years Ago
      All those early Challenger buyers must be wishing that they had bought Camaros instead.
      • 5 Years Ago
      I feel bad for those trying to trade in those Chrysler's, bummer!

      I just recently placed an order for a 2010 fusion, and was very happy with the trade in value of my 2004 mazda 3 s sedan.

      The car msrp was $22,975 - they gave me $10,000 for trade in.

      That's 44% of MSRP, or 47% for the price i paid on a 2004 model!

      My car has low miles and is in great shape, so i was definitely pleased being able to fully put that towards the new fusion.
      • 5 Years Ago
      so if a brand new camry was $20,000 in 2006 then I can buy one now for $9,000?
        • 5 Years Ago
        Yeah, something about those numbers doesn't really make sense. A quick glance at autotrader shows lots of Jeeps listed for a lot more than 35-40% of their original price.
        • 5 Years Ago
        ALG residual calculations are for the predicted wholesale value. As in what the car will sell for at an auction to dealers or what you can expect for a trade-in value to a dealer. This is not an estimate of the RETAIL value which is what you pay as a consumer. Auctions are only open to dealers and not the general public.
        • 5 Years Ago
        "secondary values are down an average of 6%"

        value != price

        The article doesn't specifically state it but I suspect "value" in this context is what is pad at a private dealer auction (or similar non-retail channel) which is not what consumers pay in the real world.
      • 5 Years Ago
      I was going to say that now is a good time to pick up a used Chrysler Co vheicle on the thrift, but i'm pretty sure there isn't a single one i would want.
        • 5 Years Ago
        You probably said the same thing in th 90's.
      • 5 Years Ago
      Chrysler has always had low resale value.. except the Wrangler has the highest resale value of any body on frame SUV..which autoblog failed to mention. surprise. anyways, if you want your precious money then buy your germans/japanese cars..however I don't care about a few thousand dollars that will hit me in a few years. I'd rather have a 300c over an avalon anyday no matter how big of a hit I take. Money is important but I guess unlike you guys, I actually buy what I want... not what will hold it's value the most in 3 years. c'mon
        • 5 Years Ago
        Yeah - buying on emotion is such a better strategy than basing a purchase on facts and empirical data. I kid, but seriously -

        There is a value proposition for everything. There is nothing wrong with spending more for what you want but if consumers looked at the Total Cost of Ownership for those wants, many would adjust to someplace in the middle.

        Balance between rational decision making and emotional decision making is important.
        • 5 Years Ago
        True.. but I guess im the kind of person that keeps people like Chrysler in business lol. I really have high hopes for them.. freaking Diamler ugh. Our 07 Pacifcia Limited is a nice car..the only nice that came from Diamler. We also have a 08 300c awd which is nice and i'm considering trading in my 08 Tundra for the new ram. especially with the discounts right now.
      • 5 Years Ago
      My name is Randy Lioz, and I'm a consulting project manager at Automotive Lease Guide. I'd like to clear the air a bit on how these adjustments are being covered. I'd like to thank a few of you for helping to do so as well, especially TD, who first addressed the misconception, and Kumar, who posted the link the our original press release.

      It seems that the press is wrongly implying that there has been an immediate 6 percentage point of drop in Chrysler's resale values, when the reality is that our numbers are a forecast of wholesale auction values after a 3-year time period. Our numbers also reflect the percentage of value retained of the original typically equipped MSRP of the vehicle, which helps dealers and banks create a lease payment calculation that is standardized for each model.

      While our percentages may not reflect the exact resale a seller will experience for his or her used car, the directional trends in the residual percentages are certainly correlated with resale values. Hopefully this clears things up a bit.
      • 5 Years Ago
      That isn't 6%, because a 3-year-old car isn't at 100%.

      With the baseline value being in the 30s, it's more like 20% of the current value disappeared overnight.

      That is, a car that you might have been able to sell for $17+k pre-BK might fetch less than $14k today.

      So, while that $3k might have been 6% of the original sticker, it's 20% of the current value.
      • 5 Years Ago
      Sign me up to buy another one! I have a Dodge Ram 2500 lease that expires in 4 months and the dealership is desperate to get me into a new one. Once they get down to 50% of MSRP I'll consider it.

      The salesman actually said to me several months back when I was looking at trucks, well in 2 years they lose 60% of their value that's why we don't lease anymore.... um okay, that's why I don't buy Dodge's anymore then.
        • 5 Years Ago
        So the bottom line is: if you are going to buy a new car and want to sell it later or trade it in buy a Toyota. If you are looking for a used car that you want to keep till the wheels fall off buy a Chrysler. Either will maximize your dollars. Conversly if you want to waste the most money buy a new Chrysler or a used Toyota. (Of course since this is based on MSRP and not the actual negotiated price the percentages don't mean anything)
        • 5 Years Ago
        Lease rates are higher for vehicles with low resale value as the residual is inturn lower. Leasing a Crysler (if even still possible) is not a good idea. Purchasing a new Chrysler is also not a good idea due to the very poor resale, unless you plan on keeping it forever. TCO is much higher on a Chrysler than a vehicle with a high resale. Resale is a VERY important finacial point to consider when you purchse. The initial purchase price may be competitive but you should consider the total cost before when determining value.
      • 5 Years Ago
      So what your saying is that the 28% residual for a Sebring is reflective of it's MSRP and NOT it's actuall selling price? That means the real residual for a Sebring vx it's actual selling price is probably in the 30% plus range.

      I guess the opposite would be true. If you bought a formerly "hot" car, like a Toyota Prius and paid $3000 over MSRP, then you would not get 45% of that price but 45% of the MSRP. Meaning that your actual residual compared to your actual buying price would be lower than 45%.
      • 5 Years Ago
      Wonderful. Now that makes buying a used Chrysler a much better bargain that paying a premium for a over-rated Toyota...

      The difference in "quality" has shrunk from 400 versus 700 defects per 100 vehicles in the 1970s, to 110 versus 120 defects per vehicle, today. That is statistically almost meaningless. When you add the effect of Toyota producing cars in Japan for a year before the models show up in the US with "first year bugs" worked out, the true "quality" difference dwindles to insignificance.

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