Chrysler Resale Values Increase

Chrysler managed to get its inventory down from a 114-day supply when it entered bankruptcy to just a 71-day supply at the end of June (an ideal number is about 60). Detroit inventory lots where Chrysler stores its unsold cars are emptying out for the first time in years, and the company is no longer bullying dealers into taking more cars than they can sell.

As a result, the company’s prices have stabilized at an average transaction price of $25,200. With 25% fewer dealers, the average price will likely grow, given the dealer network — which in some cases was competing against itself — has been cut into leaner form.

This has led ALG to raise the resale value (a vehicle’s estimated value after completing a lease) for Chrysler vehicles. ALG increased the residual pricing for Chrysler vehicles from 28.8% in June to 32.5% of original sale price for leases ending in July or August. Dodge residuals bumped up from 31.3% to 34.8%, while Jeep bounced from 32.4% to 37.4%.

Considering Chrysler stopped leasing altogether last year because it cost the company so much money, this is welcome news. Still, don’t expect Chrysler to get back to leasing any time soon.

Even so, it seems Chrysler’s decisions to stop manufacturing for two months and slim down its dealer networks has had one very positive result.

Chrysler Resale Value Increases (Detroit Free Press)