1. JD Power says 1/3 of US car buyers were upside w/ trade-ins in 2005
2. Mitsubishi, Isuzu, Suzuki, Kia see about 1/2 of buyers w/ negative equity trade-ins
3. Upside-down buyers lean toward those brands; looking for inexpensive vehicles
4. Suzuki had lowest average transaction price of any company at $16,390
5. Low residuals also hurt; Kia, Isuzu, Suzuki hold 34% or less of value after 3 years
6. Typical value of all brands in 2005 was 44%
Significant Points
1. Reasons for negative equity include no money down, trade-ins w/ poor resale value
2. Customers w/ highest negative equity generally own most expensive vehicles
3. Negative equity doesn't necessarily reflect customer's credit worthiness
4. Dealers, finance companies also suffer when customers are upside down
5. Dealers see customers applying rebates to reduce negative equity
Click Here for Full Digest and Source Article:
http://www.automotivedigest.com/view_art.asp?articlesID=18935
Sourced From: Automotive News, April 17, 2006
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