The demise of Mercury will have little impact on the brand's already weak used-vehicle values in the near or long term, used-vehicle price experts predict.
"Our analysis is still in progress, but our expectation is that the impact on future residual values will be minimal," says Eric Ibara, director of residual value consulting at Kelley Blue Book.
In May, before Ford Motor Co. said Mercury will be discontinued, Automotive Lease Guide projected that 2010 Mercury cars and trucks would hold 40.8 percent of their sticker prices after 36 months. That tied it with Dodge trucks; only Chrysler and Pontiac residual values were lower.
Kelley, which updates its residual projections every two months, also predicts for its July-August time frame that 2010 Mercury vehicles will hold almost 41 percent of their sticker prices after 36 months.
That is 7.5 percentage points higher than projected in July-August 2009 for 2009s. Residual values for all brands increased an average of 4.3 percentage points, from July-August 2009, Ibara says.
Banks says that unlike Pontiac and Saturn, which were dropped recently by General Motors, Mercury has neither unique characteristics nor unique products. Saturn, he says, had an intangible premium for its dealership experience, and Pontiac had an identity as GM's excitement brand.
The premium for used Mercurys relative to used Ford-brand vehicles had been slipping for about 10 years. NADA guide had placed the values all used Mercurys, except for the Grand Marquis sedan, at parity with used Fords.
Used Grand Marquis sedans enjoyed a 3 to 5 percent premium amounting to about $300 to $500 over used Ford Crown Victoria sedans, Banks says. But shortly after Ford Motor Co. said the Mercury brand would go away, NADA guide lowered the Grand Marquis' used price in line with the Crown Victoria's.
"They have no premium over Ford when you consider content," Banks says. "It's purely Ford with different badging."