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.