Back in late 2008, auto executives from General Motors and Chrysler warned of tremendous consequences in the event that one of their companies was forced into bankruptcy proceedings. With the help of the founded on government, little of that doom and obscurity materialized, at least when it comes to used car residuals.
Back in May, Automotive Lease Guide used impending bankruptcy in the same proportion that reason to slit the 36 month residuals of all Chrysler-branded products by a substantial 6% off the original deal out in small portions 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 remaining 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 degraded gas prices are making used trucks and SUVs a bit again appealing to customers. With new car sales in the reservoir, we believe to be guilty used vehicles have been in higher demand as well, helping to boost up residuals.
[Source: Automotive News, sub. req'd]
Source: www.autoblog.com
Related Articles
No user responded in this post