A Merger of (Depreciation) Equals

Edward Niedermeyer
by Edward Niedermeyer

Does this headline seem familiar? We noted a while back that British reliability records showed Chrysler and Fiat sharing space at the bottom of the rankings. Now, Glass’s Guide (via Autocar) has ranked British resale values by model, and Fiat’s Alfa 166 sedan takes dead last place. Not that this is entirely surprising; after all, reliability and resale tend to go hand-in-hand. The troubling part is that abominable resale values are already a major drag on Chrysler’s viability. How on earth is Fiat going to improve this desperate shortcoming for Chrysler, when it can’t beat the resale bug with its own products?

Here comes the weirdest part: though Chrysler ranked just worse than Fiat in the What Car? reliability ratings, Chrysler models are nowhere to be seen in this latest resale ranking. Fiat’s 166 is in dead last place, followed by several Rovers (courtesy of China’s SAIC), a Proton, Alfa’s 156, the Renault Laguna and Cadillac CTS. Despite reports of two-fer deals on British Avengers (leave Emma Peel out of this), not a single Chrysler product makes the UK’s worst depreciation list. Which means either the transaction prices are so low there’s nowhere for them to depreciate to, or Alfa sedans (et al.) just lose that much value. Either way, it’s not a great harbinger for the future of the Fiat-Chrysler marriage.

Edward Niedermeyer
Edward Niedermeyer

More by Edward Niedermeyer

Join the conversation
4 of 11 comments
  • Jmo Jmo on Aug 26, 2009
    When making your case, please don’t rely on just an obscurely small sample of the entire market. VW isn't Koenigsegg - enough VW's are sold, both new and used, to make a significantly valid sample size.
  • Argentla Argentla on Aug 26, 2009

    The British resale market is very different than that in the U.S., though. Company-leased vehicles as perks for employees are more common than here, I think because they are an additional benefit for employees that can be counted as a depreciable asset for the company, rather than taxable cash compensation. The result is that there are a lot of low-mileage, two- and three-year-old off-lease executive cars relative to the size of the car-buying population. Only certain of those models have much appeal to private buyers, so if it's a particularly big, thirsty, or unreliable car to boot, resale values plummet. Some things that have very good resale value in the U.S. have terrible depreciation in the UK. The Toyota Camry, for instance -- a Camry here is a pretty low depreciator, but in the UK, a V6 Camry can lose close to 70% of its value in three years. It's big and fuelish by British standards, and it's not German, which means that its desirability second-hand is low. Not so in America. The depreciation is not directly comparable.

  • Djn Djn on Aug 26, 2009

    @fiatjim +1 I too am waiting for the 36 month lease returns. A used Alfa is an amazing car in the right hands.

  • Morea Morea on Aug 27, 2009

    Alfa #2 on the 2009 JD Power Vehicle Owner Satisfaction Survey of cars owners in Germany: http://img.autonet.com.tw/news/img/2009/6/ba90606932.jpg On the other hand Fiat is third from last. Unclear what any of these factoids really mean tho'.