Group says Chrysler resale value slips 6% in week following bankruptcy filing
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% of its original sales price. After the announcement, Jeep values dropped to 32.4%. Dodge values went from 37.3% to 31.2% post filing, while Chrysler values, the lowest of the three initially (and nothing to really brag about anyway), dropped from 34.8% to a dismal 28.8%. In case you were wondering, three-year old Toyotas sell for about 45.5% of their original price.
[Source: UPI]
Reader Comments (Page 1 of 3)
Toolz 9:47AM (5/14/2009)
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.
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Epyx 9:59AM (5/14/2009)
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.
Frank 12:09PM (5/14/2009)
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)
yakapo 9:48AM (5/14/2009)
so if a brand new camry was $20,000 in 2006 then I can buy one now for $9,000?
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huisj203 10:05AM (5/14/2009)
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.
notYou 10:54AM (5/14/2009)
"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.
TD 10:56AM (5/14/2009)
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.
Alex 9:56AM (5/14/2009)
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.
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Frank 11:52AM (5/14/2009)
You probably said the same thing in th 90's.
Greg Aryous 10:01AM (5/14/2009)
Buying anything made by Chrysler is like throwing your money down the drain!
Don't you think the auction market and KBB are aware of the erosion in residual value of these products and the auction/used prices will reflect that - no bargains here, just very depressed values. If you own a Chrysler product, go to KBB.com and lookup your new lower trade-in values, they are falling like a rock!
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tuxchown 11:50AM (5/14/2009)
No car is an investment unless it is collectable. I keep my cars for several years and I drive them 200,000 miles or more. I wouldn't have any problem buying a Chrysler because loss in value is irrelevant.
Sea Urchin 10:01AM (5/14/2009)
Wow, this is a great time to get Rubicon Unlimited Wrangler, or a used Caravan or a used 300C or Charger with V8. If i was on the market i'd buy a Chrysler, because the deals are AMAZING.
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Kumar 10:14AM (5/14/2009)
Yeah, except there are so few cars, if any, that I would want, and coming from a long time ex-Chrysler owner/driver.
The 4 door Wrangler is really tempting, as always, but that's one of the few that's probably in demand still so....less ca$h off.
Epyx 10:29AM (5/14/2009)
Are you not the same person harping all day long about fuel efficiency? Now you propose purchasing the antithesis of your rants just because they are cheap.
Hypocrisy thy name is Sea Urine.
That being said, I agree with you. Anyone in the market for a Jeep or Ram should be able to get a great new car deal steal on a used car. I would go for the used car as the resale will hurt you on the new car unless you keep it forever.
Sea Urchin 11:32AM (5/14/2009)
MPGs are very very important, however if one doesn't care much about planet and clean air, one may as well buy a Chrysler and save TONS
Alan 12:43PM (5/14/2009)
This isnt right. I have been looking at Wranglers lately. According to this I should be able to find a 2006 Rubicon for under 10 grand. Not happening. Most I have seen are around 16 grand. I know that is the asking price and sales are slow but I dont think you are talking them down from 16 to 10.
daveg28 10:03AM (5/14/2009)
I feel the pain here. I currently drive a 2005 Sebring Coupe Limited. The car is loaded and sticker new for about $28,000. I've visited a few dealers lately, and I've been offered a mere $7000 for in trade. Four years old, and worth 25% of it's original value. That's a crime.
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Wobbly_ears 10:14AM (5/14/2009)
Is it 25% of the MSRP or 25% of what you paid?
If you did pay MSRP for a Chrysler, then I've got a big statue in NYC I want to sell you for cheap.
Yes, there was a crime committed: You bought a Chrysler.
Kumar 10:18AM (5/14/2009)
Hey Wobbly, check out the link in my post below. I found the original press release from the Automotive Leasing Guide, where they specifically spell out that it's based off of MSRP.
I did some of the math and, while probably real sales figures close the gap, the imports still (and have been for a while) have higher values.
It will be interesting to see what the end of major leasing operations does to resale values, as it will disrupt the 3-year turnover that was reliable for the last 15-20 years.
daveg28 10:28AM (5/14/2009)
Wobbly...You made a good point. That was 25% of the original MSRP, which was NOT what I paid for it. I bought it a year old for substantially less. I THOUGHT I was getting a hell of a deal at the time.