Every time we see someone in a Chevy Cobalt, we resist the urge to ask them if they've made plans to sell it. As it turns out, those folks might still receive a decent return, as owners of these recalled cars—and many other models with highly publicized problems—aren't dumping them en masse.
According to a report from Black Book, a trade publication that estimates residual values, some Cobalts actually increased in value after General Motors initially recalled 2005–2007 models for faulty ignition switches in February and expanded the problem to all Cobalts and many others at the end of March. From January through June 1, the average value of a 2005 Cobalt increased by 1.4 percent; the 2006 Cobalt went up 1.1 percent. While the 2010 Cobalt took a significant price hit between January 1 and March 1—at which point it hadn't yet been included in the recall—all other models ended June 1 fairly flat, according to Black Book. (Disclosure: Black Book is owned by Hearst, which also owns Car and Driver.)
Ford has recalled the 2013 Escape 10 times since its late 2012 debut, half of those for major engine failures involving fires and fuel leaks on its 1.6-liter EcoBoost. Yet Black Book found that the 2013 model "followed normal seasonal patterns" despite a sharp 3.0-percent month-over-month drop in May, the same month that Ford recalled more than 625,000 Escapes for airbag problems and sticky door handles. The 2013 models also followed depreciation rates of the previous-generation 2010–2012 Escape, even after Ford recalled 140,000 for overheating cylinder heads that led to engine-compartment fires.
What about Ford's Firestone debacle, where tires suddenly blew out and caused SUVs to lose control and flip? Aside from lawsuits, Ford and other financing lenders made out just fine. Looking at the 2000 Explorer, sales actually increased (versus a year earlier) when the recall began in August 2000, and residual values jumped in November when Ford added three higher trim lines. It was a similar story for the 2008–2009 Toyota Camry, which still outperformed its class average for monthly depreciation by the end of February 2010, when Toyota's unintended-acceleration recalls had reached critical mass. According to Black Book, 2008 Camrys had a 3.0-percent depreciation rate (compared with 3.5 percent among its segment peers) and 2009 Camrys showed a 3.6-percent rate (versus 3.9 percent).
- NHTSA Launches VIN Look-up Tool for Uncompleted Recall Repairs
- Recalls Explained: How the Government Forces Automakers to Fix Things
- These Automakers Have Issued the Most Recalls in the Past 30 Years
Of course, these are specific examples at specific dates and times, and auto sales and the data they churn out are cyclical, highly volatile beasts. But in general, Black Book said that while the "psychology" of a recall may make the cars appear to be at risk, "historical collateral data trends have shown that recalls typically do not adversely impact normal retention patterns of a vehicle, immediately after the recall is initiated as well as into the future." Even so, if you're looking at a used car, we'd still recommend using NHTSA's new VIN look-up tool to find out whether it's been recalled and, if so, if it has had the repairs completed.
from Car and Driver Blog http://ift.tt/nSHy27
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