Used Car Prices Tend to Show Consumers Accept NHTSA Recalls

In the wake of the NHTSA recall of Gen­er­al Motors vehi­cles with poten­tial igni­tion switch prob­lems, GM may have to wor­ry more about – the pub­lic image of its new CEO Mary Bar­ra, sales of new vehi­cles being affect­ed, and leg­is­la­tors accus­ing the automak­er of a dark and ugly cov­er up – than on its resale val­ues.

Here’s the lat­est on what observers are see­ing in the used car mar­ket:

  • MY 2003-07 small cars in the GM recall are val­ued at $2,000 to $5,000 each in the whole­sale mar­ket; there’s already lit­tle room for them to fall, says NADA Used Car Guide’s Lar­ry Dixon.
  • Dixon thinks the recall is unlike­ly to affect whole­sale prices as the recalled vehi­cles are “light years” away from what’s being made by GM today in qual­i­ty and tech­nol­o­gy.
  • Black Book’s Ricky Beg­gs hasn’t seen a neg­a­tive effect on the mar­ket­place.
  • Beg­gs thinks the­ses recalled cars are ide­al for the buy here pay here mar­ket, as these con­sumers tend to use their tax refunds as down pay­ments at this time of year.
  • Kel­ley Blue Book hasn’t seen any resale val­ue changes either. Affect­ed cars are doing alright; for exam­ple, a 2006 Chevro­let Cobalt sells now for about the same amount it did dur­ing the last week of Jan­u­ary when the recall began, accord­ing to KBB’s Tim Flem­ing. The same is true for the 2003 and 2004 Sat­urn Ions and 2006 and 2007 Pon­ti­ac Sol­stices.
  • GM’s expe­ri­ence is sim­i­lar to what Toy­ota has gone through in recent years with its Toy­ota and Lexus brands stay­ing strong (and win­ning Kel­ley Blue Book Resale Val­ue of the Year awards). Con­sumers may very well feel con­fi­dent in the NHTSA recall process and that it fix­es the prob­lem that was ini­tial­ly dis­cov­ered in the car.


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