The news on General Motors recalls is relentless. This week, the company announced another six of them, making a total of 60 and 29 million vehicles needing a fix.
Regardless of whether CEO Mary Barra gets a handle on this PR disaster and rights the listing ship, you can benefit! Take a look at the chart below.
As you can see, the price drops on affected GM models as used cars climbed to more than 15 percent in June. According to ISeeCars.com, the cuts have averaged 14 percent from May to now. The declines are more than double the 6.7 percent average of other, similar cars.
The bargains are best on plain-jane cars like the Chevy Cobalt, Pontiac G5 (a descendant of the car Oprah gave away in 2004) and the Saturn Ion. More stable are prices on the Chevy HHR (down 11.5 percent) and the stylish and sporty Saturn Sky/Pontiac Solstice twins (down 10.6 and 9.7 percent respectively). The latter were styled by Tesla guru Franz von Holzhausen, so maybe stardust is rubbing off.
GM cars that were not recalled have had a much better time of it, with just a 7 percent decline. This sure makes sense — I can understand the reluctance to buy a Cobalt, after all the horrific images of fatal crashes involving them. And then there’s the fact that Consumer Reports called the 2005-2010 Cobalt “lackluster.”
The Pontiac Solstice has seen used-car price drops, but not as precipitous as the Cobalt. (Photo: Pontiac)
Bad GM news could make the bargains better. Earlier this week, the company reported lower-than-expected second quarter profits of $190 million, or 11 cents per share. It doesn’t sound too horrible, but it compares to $1.2 billion, or 75 cents a share, last year. GM has been doing remarkably well since it was reorganized, but the pain is starting to be felt.
According to Jack Nerad, executive market analyst at Kelley Blue Book:
GM is paying for past sins in terms of the bottom line. In what has been a buoyant car market this year in the United States, GM’s results would have been far more robust without the heavy burden of recall expenses. The good news is that those expenses are occurring in relatively flush times for the industry and for GM in particular. Its situation would be precarious if the market were less bullish.
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