Does cash incentives on new vehicles affect used car Market?

[indca]

Hello guys, and this question concerns the cash incentives given out on new Chrysler, and GM vehicles, as I see that there is around $10,000 cash rebate on Chrysler 300, so when this car comes for sale in used market will the buyer be able to see this discounted price?

Or will I only be able to go by manufacturer MSRP when buying a used car maybe 1 or 2 years from now?

[Tortelvis Himself]

It will affect prices on last year's model the most, and the effect would decrease with older cars. There would not be much affect in the long term as long as prices return to there previous levels.

I just sold a 7 year old car, and I don't think the current incentives had any effect on the value of my car.

[TodayHello]

Hello guys, and this question concerns the cash incentives given out on new Chrysler, and GM vehicles, as I see that there is around $10,000 cash rebate on Chrysler 300, so when this car comes for sale in used market will the buyer be able to see this discounted price?

Or will I only be able to go by manufacturer MSRP when buying a used car maybe 1 or 2 years from now?


Is there a correlation? Absolutely. As to the strength of that correlation... we'll let one of our RFD MBA's work it out ;)

Looking at a 2009 Chrysler 300C (24T), MSRP: 47,645
- $12,250 Consumer Discounts
= $35,395 (MSRP)

The guy who paid full pop for a 2008 unit 1year ago at the same price (assuming MSRP was similar on the same model 1yr ago) and wants to get rid of his has to take the $12,250 Hit ON TOP of regular depreciation (which is higher on this particular unit being a Domestic and a Chrysler product).

Doing a quick Search on autotrader.ca... the highest priced 2008 300C in Ontario is listing for $31,888 with 24Km on it.

[KawaiiTentacleBeast]

Yes, but you assume that the guy paid full MSRP last year, which probably isn't the case for a 300C as they have already been incentivising it fairly heavily.

A better example is the Civic Si. Last year people were still paying list price for them at $30+k. Today you can get a fully loaded 08 Si for $24k OTD, so why would anyone pay more than $15k for a 1 or 2 year old one? The Civic Si from 1 or 2 years ago must have one of the worst resale values of any car.

Same thing for the 08 Subarus - People were probably paying full retail for it as it was the first year of the body style, and the very next year, Subaru comes out with a revised model with more HP. That together with the engine-blowing-up issue they had with the turbo motors, a 08 Subaru WRX is probably worth nothing on the used market.