Back in late 2008, auto executives from General Motors and Chrysler warned of dire consequences in the event that one of their companies was forced into bankruptcy proceedings. With the help of the federal government, little of that doom and gloom materialized, at least when it comes to used car residuals.
Back in May, Automotive Lease Guide used impending bankruptcy as reason to slash the 36 month residuals of all Chrysler-branded products by a substantial 6% off the original retail price. That dropped the residual value of a Chrysler vehicle to an average of 28.8%, while Dodge and Jeep were at 31.3% and 32.5%, respectively.
Just one month later, with Chrysler's bankruptcy in the rearview mirror, and residuals are nearly back at April levels. Chrysler has climbed nearly four points to 32.5%, Dodge is at 34.8%, and Jeep is now at 37.4%. ALM admits that bankruptcy didn't effect residual values like the company thought it would, and as a result, resale values for GM-branded vehicles won't be downwardly adjusted.
Kelly Blue Book reportedly told Automotive News that some of the bounce-back in residuals is due to the fact that relatively low gas prices are making used trucks and SUVs a bit more appealing to customers. With new car sales in the tank, we suspect used vehicles have been in higher demand as well, helping to boost up residuals.
[Source: Automotive News, sub. req'd]