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Major price drops for cars affected by GM recalls
Major price drops for cars affected by GM recalls-October 2024
2023-12-14 EST 02:30:58

Woburn, Mass. - The General Motors cars recalled for the faulty ignition switch in February have experienced a price drop that is more than double the average across all similar cars, according to a new study by iSeeCars.com.

The search engine that helps consumers find the best deal on a used car assessed the six GM cars affected by the ignition switch recall and found that the average price of all the recalled vehicles dropped by 14 percent from March through June 2014, compared to March through June 2013 and adjusted for inflation. By comparison the average for all similar cars was 6.7 percent over the same time period. "We surmise that the recalls are playing a role in motivating sellers to sell their used cars and at a lower price point that they otherwise would," says Phong Ly, iSeeCars.com CEO.

While the GM recalled cars dropped by 14 percent on average over the March-June 2014 time frame, iSeeCars.com's analysis also found that there was actually a decline from month to month, as shown in this graphic:

GMRecallsStudy_Month-To_Month_Graph_iSeeCars_071515

Among the recalled cars, the Chevrolet HHR, Saturn Sky and Pontiac Solstice dropped less than the Chevrolet Cobalt, Pontiac G5 and Saturn Ion. "The HHR as well as sibling convertibles Sky and Solstice are definitely more unique than the other cars in the recall. Their unique designs likely contributed to their desirability and helped them hold their value a bit better," says Ly. The average price drop for the Chevy Cobalt, Pontiac G5 and the Saturn Ion were at least two times greater than the average among all similar cars. This table illustrates the average price changes for the recalled cars compared to similar vehicles and GM cars as a whole.

Recalled GM Vehicles

Average % Price Change 2013-2014

Compared to Average

2005-2007  Chevrolet Cobalt

-13.7%

2.1X greater price drop than average

2007 Pontiac G5

-13.7%

2.1X greater price drop than average

2003-2007 Saturn Ion

-13.6%

2.0X greater price drop than average

2006-2007 Chevrolet HHR

-11.5%

1.7X greater price drop than average

2006-2007 Saturn Sky

-10.6%

1.6X greater price drop than average

2006-2007 Pontiac Solstice

-9.7%

1.4X greater price drop than average

Average price change across all similar cars

-6.7%

Average for all GM recalled vehicles in Feb. 2014

-14.0%

Average for  GM vehicles excluding the recalled cars

-7.0%

While used car sales as a whole increased in the March-June 2014 timeframe compared to the same timeframe last year, the availability of used GM vehicles fell by about one percent, possibly indicating seller reluctance to put their General Motors-branded cars up for sale when the company has been in the throes of numerous recalls, likely because sellers were waiting to get the recall repairs complete before listing them for sale. "Sellers of GM vehicles that were not recalled probably don't need to be worried," says Ly, "since our data indicates that the average price drop for the non-recalled GM cars during that timeframe is 7 percent—just slightly above the average of all cars."

GMRecallsStudy_Graph_iSeeCars_071515

Methodology of the Study:

iSeeCars.com analyzed over 11 million used cars for sale by dealers from March to June 2013 and March to June 2014. Average price changes were calculated for each General Motors car recalled for a faulty ignition switch in February 2014, as well as all similar vehicles and then all GM vehicles. 2013 prices were adjusted to 2014 using inflation data from the U.S. Bureau of Labor Statistics.

About iSeeCars.com:

iSeeCars.com is a data-driven car search and research company that helps shoppers find the best car deals by providing key insights and valuable resources, including the iSeeCars VIN Check report and Best Cars Rankings. iSeeCars has saved users over $406 million so far by applying big data analytics powered by over 25 billion (and growing) data points and using proprietary algorithms to objectively analyze, score and rank millions of new cars and used cars.

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