May 11, 2009
Resale values fall 6% for Chrysler vehicles
The resale value of Chrysler LLC's cars and trucks isn't what it used to be.
Three-year-old Chrysler, Jeep and Dodge vehicles saw their resale values fall 6 percentage points in the week after the Auburn Hills automaker filed for Chapter 11 bankruptcy protection, according to Automotive Leasing Guide, a California market research firm.
Resale, or residual, values are important in determining the monthly payment on auto leases. Because Chrysler Financial stopped underwriting leases last August, the leasing guide's findings likely will delay any increase in leasing by GMAC, which soon will become the main source of lending for Chrysler dealers and consumers.
Before the bankruptcy filing, Jeep and Dodge had 36-month resale values of 38.4% and 37.3% of their vehicles' original sales price. That was slightly better than Chevrolet and GMC, but below Toyota's 45.5% and Hyundai's 40.9%.
In the last week, Jeep dropped to 32.4%, Dodge slipped to 31.2% and Chrysler fell from 34.8% to 28.8%.
Another likely consequence is that consumers trading in a Chrysler vehicle will get a lower trade-in offer when they turn in a Chrysler product for a new vehicle.
Some independent banks could ask for a larger down payment from anyone buying a new Chrysler, Jeep or Dodge to cover what they see as faster depreciation, suggested Jesse Toprak, an auto analyst with the consumer automotive Web site Edmunds.com.
Last week, Edmunds.com reported a 15% increase in the number of visitors to its Web site seeking information on Chrysler models. By comparison, GM's shopping consideration dropped 6% since April 30 and Ford's was up 7%
LINK:Resale values fall 6% for Chrysler vehicles | Freep.com | Detroit Free Press