Post-Bankruptcy: Are Chrysler And GM Vehicles Worth More?

Since the new Chrysler (or Chrysler Group) has emerged in partnership with Fiat, the American Leasing Guide, now says all three of the American brands (Chrysler, Dodge, Jeep) are now worth significantly more than they were before bankruptcy. This is good news to customers who are either trading in their vehicles or for the few who had plans on leasing a vehicle. For leases, higher residuals values typically result in lower car payments, which means less money coming out of your pocket in this tight economy.

For the months of July and August (post-bankruptcy), the 36-month residual values set by the American Leasing Guide are 32.5% for Chrysler, 34.8% for Dodge and 37.4% for Jeep. Jeep's value increased 5% from May and June (pre-bankruptcy), Chrysler’s rose 3.7% and Dodge’s rose 3.5%. While these residuals values are still lower than the industry average, the new Chrysler (or Chrysler Group) is making progress with aged products. The only newly designed vehicles in the companies portfolio are the Dodge Challenger and the Dodge Ram.

Like the Chrysler Group, now that GM is out of bankruptcy, they too, should benefit from increase residual values with their vehicles. Unlike the Chrysler Group, GM has a slew of newly designed products debuting over the next 12 months. Just maybe the government bailout wasn't a bad thing. If both GM and Chrysler pay back their loans, this should quiet all of the critics who were adamantly against the bailout.

Two Pontiacs Remain for 2010, Former Toyota Executive Takes on CEO Role

Although GM has decided to eliminate the Pontiac brand, as part of its new reorganization plan, the embattled automaker will continue to produce its only joint venture vehicle with Toyota, the Pontiac Matrix, and keep the American made G6 in its portfolio for the 2010 model year.

As a side note, GM has selected a former telephone company executive to become the new Chairman for the automaker, while Chrysler, under its new approved reorganization with Fiat, has promoted Jim Press, the first American executive to serve on the board while at Toyota, to deputy CEO. I believe this is a good move. Many critics believe Press should have been appointed to that position initially, as opposed to Bob Nardelli, who drove Home Depot into the ground as CEO of the world's largest home improvement company, before he was forced to leave.

GM Has Buyers for Saturn and Hummer

After filing bankruptcy this week, GM has found buyers for its Hummer and Saturn brands. A manufacturing company based in China plans to take over the Hummer brand, while the billionaire dealer and former race car driver, Roger Penske, plans on acquiring the Saturn brand.

The great news is that this could keep thousands of workers who build and sell the brands from being put on the streets in these tough economic times. Moreover, maybe the resale value of the two brands will stabilize too - knowing that Saturn and Hummer will be given a second chance to survive.

ABC News Reports Firesale at Chrysler Dealers

ABC News confirms what we've been saying. Yes, its an awesome time to buy a vehicle from a Chrysler (Dodge and Jeep) dealership, if you're in the market for a new vehicle. However, you've got to make sure its the right Chrysler dealership, basically one that's being forced to close by June 9. And don't forget to shop around at all of the Chrysler stores in your area (those that are scheduled to close and those that will remain in business) to ensure you're getting the best deal possible. To check out the ABC news story, click here.

Also stay tuned into the news this weekend. If GM goes into bankruptcy on Monday, as everyone expects, some of its stores may be forced to close sooner than later. What could this mean to you as a consumer? It means more good deals could be ahead.

D-Day: 10 Black Chrysler Dealers to Lose Stores, Consumers Win in the End

On June 9, Chrysler will have 10 fewer black dealers selling its vehicles. According to our reliable industry sources, 9 men and 1 woman will be officially out of business, leaving 37 in business after the dust settles: 2 females and 35 males. While Chrysler plans to eliminate 789 dealers over the next month, both the minority and black dealer population for the automaker will still maintain the same market share prior to the cuts, 5 percent and 1.5 percent respectively. Obviously Chrysler executives put a lot of thought into its dealer hit list before making the announcement - avoiding any potentional headaches with the civil rights community and other minority dealer advocates over having acceptable representation. Many critics were expecting Chrysler - since they're currently privately-owned - to slice more minority dealers.

For consumers, this restructuring means that the dealers on Chrysler's targeted list must clear out their new-car and parts inventory by the June 9 deadline in order to take advantage of any factory rebates and incentives. Thus, consumers should be able to work some good deals over the next few weeks as those dealers become desperate to eliminate their inventory.

After the deadline, the targeted dealers will no longer be apart of the Chrysler franchise system. What does this mean to you? It means any new vehicles remaining in inventory will not qualify for any factory incentives. Also unless you're paying cash for one of Chrysler's new vehicles, while the company is in bankruptcy, you may find you'll have to cough up a larger down-payment to secure financing from some of the major financial institutions - since the residual values have dropped and auto loan delinquencies are at an all-time high, according to the American Bankers Association. In fact, over 3.53 percent of new-car loans in the last quarter of 2008 were late 30 days or more, as compared to 1.35 percent of new-car loans in the last quarter of 2004.

And across the street at GM, the bankruptcy word continues to loom. Just like Chrysler, GM is also eliminating dealers - roughly 1,200 over the next 18 months. Unlike Chrysler's dealers, GM will have more time to wind down their business as long as the company can avoid bankruptcy. However, if GM is forced into bankruptcy like Chrysler, they will face a similar accelerated path of eliminating dealers. As of now, we haven't been able to determine how many minority dealers are on GM hit list.

Although we hate to see any dealer close shop, these tough economic times will cause the remaining dealers to increase their level of customer service in order to stay in the game. Thus, this means that consumers are back in the driver's seat again - getting good deals and improved customer service!