The Bailout Effect?
The Automotive Lease Guide is slashing projected residuals for 2009 GM and Chrysler vehicles, reports Automotive News [sub]. ALG says that their new 36-month projections reflect the brands’ “uncertainty,” heralding the arrival of yet another dire consequence of bankruptcy that the bailout was supposed to prevent. Oh well, what’s a few billion among friends? Now let’s take a look at the nitty-gritty.
For GM, residual projection cuts are focused on the dead brands walking: Saturn, Saab, Hummer and Pontiac. ALG projects that Hummer products will be worth 38.6 percent of their retail value in three years, down a staggering nine percent from their 2008 projection of 47.7 percent. Saturn and Saab residual projections are down about seven percent each to 41.3 percent and a dismal 36.1 percent respectively. Pontiac values are expected to drop nearly five percent to 39.1 percent of the retail value.
At Chrysler, everything is dead brand walking. Well-founded fears that Auburn Hills is weeks away from going Tango Uniform have savaged their projected resale values, say ALG. In 2008, Chrysler-branded vehicles were projected to be worth about 43 percent of their value in three years. 2009 Chryslers are looking at 36.4 percent residual value. Dodge projections dropped from 42.7 percent to 38.7 percent, while Jeep fell from 47.8 percent to 41.3 percent.
More by Edward Niedermeyer
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Yeah I doubt any Patriots or Calibers are going to be collector items. The only recent Mopars that stand out as possible collector items to me are the Magnum SRT-8, Grand Cherokee SRT-8, and the Neon SRT-4. Maybe the high end Chargers and 300's (Daytonas, SRT-8, Walter P. Chrysler), also. Or maybe a Durango/Aspen Hybrid :P
axel: I picked Dodge Caliber out of my hat. Feel free to substitute any comparable POS. My point is that there will be someone out there someday who will consider it collectible for personal reasons. Maybe their father had one. Maybe they learned to drive in one. Remember, all kinds of ugly stuff from the 70s is already being collected (yuck). Duesenberg, Pierce-Arrow, Packard, etc. are collected because they are both fine and rare. Obviously the Caliber is not fine, but if any survive they will be rare.
Lease or buy a North American POS, and you will get SFA as resale value in 2-5 years from now. Keep it clean for 25 years, and you might earn 5-7% per year as a collector's item... about the same as a shitty mutual fund minus storage costs. The only people who should be buying the Big 2.8 right now are those who plan to drive the crap out of them and live in the sticks where there are no mechanics under the age of 50 to keep them running.
Excellent news for us used-car buyers! There are true bargains out there. Three-year-old Grand Cherokees for $9k. C6 Vettes for $25k. Near detroit, you can buy an '06 Deville for $12k with 40k miles on it. If you're into a car like that, the price is dirt cheap. What kind of 3-year-old Japanese car can you buy for $10-12k? You can barely touch a Civic for that. As long as you aren't the sucker that's buying one of these cars new...