Wholesale prices of General Motors vehicles with faulty ignition switches are unscathed by the highly publicized recall of the vehicles, analysts say.
That's because the recalled 1.6 million 2003-07 small cars are valued at about $2,000 to $5,000 each in the wholesale market so there is little room for the prices to fall, says Larry Dixon, an analyst with NADA Used Car Guide.
But Dixon also cautions against reading too much into a big percentage change in older vehicles' prices. After all, a $100 change on a $2,000 car equates to a 5 percent swing. For a $15,000 used car, a 5 percent change would mean a $750 shift.
"They can't fall to zero," he says of the vehicle prices. "If they do fall as a result of the recall, the degree of the fall will be dictated by the amount of media scrutiny. The greater the press firestorm, the more it will negatively affect the prices of those vehicles."
Dixon says he doubts the recalled vehicles' wholesale prices will impact GM vehicles' general residual values because the recalled units are "light-years" from the vehicles the company builds today in terms of quality and technology.
Since the recall was announced in February, wholesale auction prices of the recalled vehicles have held up better than those of their peers.