Fusion Residual Value

[Momentum1]

Hi, I'm pretty much a lurker here, but thoroughly enjoy the posts and info on this site. I leased a 2006 Fusion SE I4 in the summer of 2006. Frankly, I love the car, but my lifestyle has changed, and I find I'm not driving this car much at all.

 

So, I called my Ford Dealership where I have leased Fords since 2000, and said "Hey, my Fusion is sitting in my garage, basically unused, and only has a tad over 5,000 KMs on it (Yep, Canadian here)". I enquired about changing the lease from a Fusion to something a bit more 'sexy' - a Mustang perhaps.

 

What I was told is that my Fusion - leased less than two years ago for over $24K and which I still have $19K owing, is only worth $11K now!!!! It still smells new inside!!! I know domestic cars lose their value quickly, but this was a real eye opener for me. I have decided to hold onto my Fusion until the lease is up in 2010 and then take a look at what else is available out there.

 

Anyway, I just thought I would pass along that little tid bit.

Edited July 24, 2008 by Momentum1

[theoldwizard]

Hi, I'm pretty much a lurker here, but thoroughly enjoy the posts and info on this site. I leased a 2006 Fusion SE I4 in the summer of 2006. Frankly, I love the car, but my lifestyle has changed, and I find I'm not driving this car much at all.

 

So, I called my Ford Dealership where I have leased Fords since 2000, and said "Hey, my Fusion is sitting in my garage, basically unused, and only has a tad over 5,000 KMs on it (Yep, Canadian here)". I enquired about changing the lease from a Fusion to something a bit more 'sexy' - a Mustang perhaps.

 

What I was told is that my Fusion - leased less than two years ago for over $24K and which I still have $19K owing, is only worth $11K now!!!! It still smells new inside!!! I know domestic cars lose their value quickly, but this was a real eye opener for me. I have decided to hold onto my Fusion until the lease is up in 2010 and then take a look at what else is available out there.

Actually that is the Blue Book value for a trade in of that car !

 

I don't know where exactly you live, but around SE MI, anything with a 4 cyl is selling for a lot. I doubt that you could get $19K for it, but $14-15K for sure.

[jaydez]

I know how you feel. I bought my loaded 06 SEL for $23k at the end of 06 after reading that the residual value was expected to be high on this case becasue of the quality and whatnot.

 

I'm actually pissed now because Its worth $16k and I still owe almost $19k on it. I should have gone with something that would have cost a little more but still worth something.

[NLPRacing]

Hi, I'm pretty much a lurker here, but thoroughly enjoy the posts and info on this site. I leased a 2006 Fusion SE I4 in the summer of 2006. Frankly, I love the car, but my lifestyle has changed, and I find I'm not driving this car much at all.

 

So, I called my Ford Dealership where I have leased Fords since 2000, and said "Hey, my Fusion is sitting in my garage, basically unused, and only has a tad over 5,000 KMs on it (Yep, Canadian here)". I enquired about changing the lease from a Fusion to something a bit more 'sexy' - a Mustang perhaps.

 

What I was told is that my Fusion - leased less than two years ago for over $24K and which I still have $19K owing, is only worth $11K now!!!! It still smells new inside!!! I know domestic cars lose their value quickly, but this was a real eye opener for me. I have decided to hold onto my Fusion until the lease is up in 2010 and then take a look at what else is available out there.

 

Anyway, I just thought I would pass along that little tid bit.

 

I wouldn't take one dealers word, take it to a few dealers, maybe a few non-Ford dealers and shop it around. My sister traded her 2005 Fusion I-4 for a 2008 Jeep Wrangler 4 Door and they got over $17K for it, and the tires were worn out, had door dings all over it (they lived in an apartment), had over 50,000 miles and they smoked in it! I wouldn't give up after one call.

[saintlaz1]

I wouldn't take one dealers word, take it to a few dealers, maybe a few non-Ford dealers and shop it around. My sister traded her 2005 Fusion I-4 for a 2008 Jeep Wrangler 4 Door and they got over $17K for it, and the tires were worn out, had door dings all over it (they lived in an apartment), had over 50,000 miles and they smoked in it! I wouldn't give up after one call.

 

I mean I hate to say it but american cars are the worst when it comes to trade ins.

[NickF1011]

I mean I hate to say it but american cars are the worst when it comes to trade ins.

 

Haven't checked residuals on Korean cars, have you? Really though, it all completely depends on the particilar model.

[NLPRacing]

I mean I hate to say it but American cars are the worst when it comes to trade ins.

 

Fords seem to have the worst trade in value at Ford dealers. I don't know why, but they do. When I bought the 07 Expy, I tried trading in my 01 Expy. The Ford dealer offered me $4500. I took it to Carmax and they offered $6500. I took the Carmax estimate back to the dealer, and they said sell it to Carmax and bring the check back to them. This is a dealer that I have purchased 2 cars from personally and 3 cars for the place I work. I told them no thanks and then took it to another Ford dealer. They matched the Carmax offer. My point is, I know many people that traded their Fords in on other makes due to other dealers offering them more then the Ford dealer. Why can't Ford dealers treat heir Ford customers right?

[akirby]

Fords seem to have the worst trade in value at Ford dealers. I don't know why, but they do. When I bought the 07 Expy, I tried trading in my 01 Expy. The Ford dealer offered me $4500. I took it to Carmax and they offered $6500. I took the Carmax estimate back to the dealer, and they said sell it to Carmax and bring the check back to them. This is a dealer that I have purchased 2 cars from personally and 3 cars for the place I work. I told them no thanks and then took it to another Ford dealer. They matched the Carmax offer. My point is, I know many people that traded their Fords in on other makes due to other dealers offering them more then the Ford dealer. Why can't Ford dealers treat heir Ford customers right?

 

Maybe the first dealer already had 12 used ones in stock? If a dealer takes your trade-in they either have to put it on their used car lot and sell it or sell it at the auction.

 

e.g. If I was a dealer and had 10 used explorers that weren't selling, I don't want another one. I'd have to wholesale it at the auction and that's risky, so I'd probably lowball the trade-in just to be safe. If someone else wanted it or was willing to risk a higher value then let them do it.

 

In the end it's just a business decision and some make better decisions than others.

 

BTW - you said Ford dealers are worst but you got the same value from a Ford dealer in the end. So it's not all of them.

[saintlaz1]

Haven't checked residuals on Korean cars, have you? Really though, it all completely depends on the particilar model.

 

I have but I dont really care since I would never buy them, but you have to admit the residuals with American Cars.

 

I certainly wouldnt expect a Kia to bring in more money than my Mercury.

[FLLMTR]

I leased a 2006 Fusion SE I4 in the summer of 2006.

 

What I was told is that my Fusion - leased less than two years ago for over $24K and... is only worth $11K now!!!!

 

That does sound bad, but here is the rub. It really doesn't matter that you owned the vehicle for 2 years. It is now 3 model years old now. The Fusion's styling is now pretty bland compared to the Honda Accord. It is not just my opinion, Honda sold over 300% more Accords than Ford sold Fusions last month.

 

I feel your pain, because I nearly bought a Fusion in 2006 before buying a Mountaineer. I paid over $33K for the Mountaineer, and it is now worth less than $10,000 on trade-in... if they will even take it at all.

 

I seriously doubt I will buy another Ford since the residual values don't hold. The Q2 record quarterly loss is proof of that.

[FLLMTR]

I leased a 2006 Fusion SE I4 in the summer of 2006.

 

What I was told is that my Fusion - leased less than two years ago for over $24K and... is only worth $11K now!!!!

 

That does sound bad, but here is the rub. It really doesn't matter that you owned the vehicle for 2 years. It is now 3 model years old now. The Fusion's styling is now pretty bland compared to the Honda Accord. It is not just my opinion, Honda sold 269% more Accords than Ford sold Fusions last month.

 

I feel your pain, because I nearly bought a Fusion in 2006 before buying a Mountaineer. I paid over $33K for the Mountaineer, and it is now worth less than $10,000 on trade-in... if they will even take it at all.

 

I seriously doubt I will buy another Ford since the residual values don't hold. The Q2 record quarterly loss is proof of that.

[suv_guy_19]

That does sound bad, but here is the rub. It really doesn't matter that you owned the vehicle for 2 years. It is now 3 model years old now. The Fusion's styling is now pretty bland compared to the Honda Accord. It is not just my opinion, Honda sold over 300% more Accords than Ford sold Fusions last month.

 

I feel your pain, because I nearly bought a Fusion in 2006 before buying a Mountaineer. I paid over $33K for the Mountaineer, and it is now worth less than $10,000 on trade-in... if they will even take it at all.

 

I seriously doubt I will buy another Ford since the residual values don't hold. The Q2 record quarterly loss is proof of that.

 

 

There are so many things wrong with this post it isn't even funny.

[NLPRacing]

Maybe the first dealer already had 12 used ones in stock? If a dealer takes your trade-in they either have to put it on their used car lot and sell it or sell it at the auction.

 

e.g. If I was a dealer and had 10 used explorers that weren't selling, I don't want another one. I'd have to wholesale it at the auction and that's risky, so I'd probably lowball the trade-in just to be safe. If someone else wanted it or was willing to risk a higher value then let them do it.

 

In the end it's just a business decision and some make better decisions than others.

 

BTW - you said Ford dealers are worst but you got the same value from a Ford dealer in the end. So it's not all of them.

 

I definitely see your point and don't fault them, but it will hurt their business in the long run. Most Ford dealers are owned by big "Automotive Groups" that operate several different dealerships with several different brands. If they have too many of whatever, transfer them to the used car lots of the other dealers.

 

BTW - The Ford dealer that matched Carmax initially offered less then the first Ford dealer, but then only offered more after I showed the estimate from Carmax. They didn't have to, they did it to make a $40,000+ sale. Unfortunately, that first Ford dealer has probably lost my business for good. I nearly bought a used EL from Carmax, but is was black and I really hate black big vehicles (Texas summers are just too hot).

[mettech]

I did a quick compairison for used cars on KBB, NADA and Edmunds..

 

 

It appears that Ford does lose more in resale/trade value each year then GM, Honda and Toyota. At least in this area.

 

Why is that?

[Roadrunner]

Thank goodness I buy cars to last until they die. It's kind of the smart way to go.

 

I expect a ten to 12 year lifespan for my Fusion, or 170,000 miles, whichever comes first. I will wreak hell if anyone wrecks into me, though, as that screws up the plan! :fire:

 

My only reason to trade would be if this I4 Fusion really can't tow, but I almost could see a Crown Vic cop car in my future if that really goes that way. I mean, two grand for a used CV that won't be my daily driver? Sounds okay to me.

[suv_guy_19]

I did a quick compairison for used cars on KBB, NADA and Edmunds..

 

 

It appears that Ford does lose more in resale/trade value each year then GM, Honda and Toyota. At least in this area.

 

Why is that?

 

 

That's a good question actually, especially when it comes to GM.

[efy]

I wouldn't take one dealers word, take it to a few dealers, maybe a few non-Ford dealers and shop it around. My sister traded her 2005 Fusion I-4 for a 2008 Jeep Wrangler 4 Door and they got over $17K for it, and the tires were worn out, had door dings all over it (they lived in an apartment), had over 50,000 miles and they smoked in it! I wouldn't give up after one call.

Did you mean 2006 Fusion? There were no 2005 Fusions.

Edited July 27, 2008 by efy

[efy]

Thank goodness I buy cars to last until they die. It's kind of the smart way to go.

 

I expect a ten to 12 year lifespan for my Fusion, or 170,000 miles, whichever comes first. I will wreak hell if anyone wrecks into me, though, as that screws up the plan! :fire:

 

My only reason to trade would be if this I4 Fusion really can't tow, but I almost could see a Crown Vic cop car in my future if that really goes that way. I mean, two grand for a used CV that won't be my daily driver? Sounds okay to me.

A Fusion will definately last more that 170,000 miles. Heck, my dad has a '99 Escort with almost 200,000 miles on it and it's still running as strong as it was when he bought it.

[NLPRacing]

Did you mean 2006 Fusion? There were no 2005 Fusions.

 

You're right, it was a 2006, she bought it in 2005...

[stephenhawkings]

any one that buys a new car should know that they are going to experience the largest drop in value as soon as they drive it off the lot. This is true for all models, makes brands, or countries of orgin. if you want a good deal on a car buy some old granmas car, or a lease trade in, or form some one who is broke and needs the money. or september when they are clearing out the old models.

[630land]

I totally agree, welcome to the real world kids. And never pay MSRP.

[focus05]

Residuals are often driven by perception. So, here's how the cycle works:

 

An estimated price is set on the car at the start of production so that auction houses have a place to start. Some initial Fusions are purchased by dealers. If the dealers move them off the lot, they buy more, if they don't, they stop buying and auction price (residual) drops. That's why fleet dumping is a problem. If there is a glut of supply, then you have to price much lower to build demand. That's also why deep discounts are a problem. If your new models are selling for $18k, you can't sell a used one for $18k.

 

So, the Fusion was never fleeted that much, and there were some discounts here and there, but nothing drastic. So the questions is: why would demand for used Fusions not be higher? The answer: product recognition. There is almost no data on the Fusion's reliability still. It will be another year before we get any (and it will be good). Penetration of the Fusion name among mid-size car shoppers is STILL around 50% if I remember correctly. Everyone still thinks Taurus. Then there is Ford's general quality baggage that will deal with for at least 3-5 more years before seeing a real breakthrough.

 

How are things (in the U.S.) now that gas prices are higher? Good, actually. The Fusion's discounts on retail units is running less than last year. Used Fusion prices around where I am are up about $1,000 since the spring. Why? People want a sedan. They think Camcord, find that a slightly used one is the same price as a new Fusion and $4k-$5k more than a used one, and many of them choose to save the money (especially given used cars' less favorable financing terms). Demand for used Fusions (especially 4-cyl models) goes up. Prices follow as dealers return to auction looking for thos models.

 

In a couple years, I have no doubt that the Fusion's quality numbers and reputation will drive higher resale value out of the gate. But with penetration still low, reputation unknown and used supply still decent if not ample, residuals were going to start out low - especially given Ford's reputation.

 

As for the Mountaineer, about half of that depreciation is Ford - the rest is the market. Similar 2006 4Runners are only running about $1-1.5k more at auction than Moutaineers around here. Wholesale prices have just taken a beating and dealers don't want any of them in stock.

[WC-MAN]

When I ran a 2006 SE V-6 vs a Malibu LT v-6, and the chevy was worth less. Your gonna take it in the pants on any new car you try to sell. Also in the equation is the fact that, when you are buying a new car, the margins are often tighter. Carmax may not have offered as much if they were selling new cars.

 

The truth is, right now is a great time to be in the market for a large vehicle, but a piss poor time to be trying to trade a big vehicle for a smaller one.

[Hebitchmanslapper]

I did a quick compairison for used cars on KBB, NADA and Edmunds..

 

 

It appears that Ford does lose more in resale/trade value each year then GM, Honda and Toyota. At least in this area.

 

Why is that?

 

There are a lot of factors that come to mind. The most understated one is that Ford in the past and hopefully not to much more in the future has relied on fleet vehicle sales. This in turn throws off your supply and demand. If you sell thirty thousand fusions to the rental car companies, where do you think those babies are gonna be in twelve to eighteen months. I don't think ford can survive completely with out fleet car sales but they should try to restrict them to smaller quantities. Ford could learn a lesson from Honda. They only sell vehicles to private individuals. Being the biggest producer of a type of vehicle or vehicles is not always a good thing. Look at GM. They are history and so might Ford be if they don't get the big picture soon...... Even Toyota is feeling the "high volume related" woes...

[FordBuyer]

That does sound bad, but here is the rub. It really doesn't matter that you owned the vehicle for 2 years. It is now 3 model years old now. The Fusion's styling is now pretty bland compared to the Honda Accord. It is not just my opinion, Honda sold over 300% more Accords than Ford sold Fusions last month.

 

I feel your pain, because I nearly bought a Fusion in 2006 before buying a Mountaineer. I paid over $33K for the Mountaineer, and it is now worth less than $10,000 on trade-in... if they will even take it at all.

 

I seriously doubt I will buy another Ford since the residual values don't hold. The Q2 record quarterly loss is proof of that.

 

Moral of this story....Never trade-in your vehicle for new one unless you get real good deal on new one or trade-in vehicle. I have never traded-in a vehicle in my life and have always sold it privately for much more money than trade-in offer. Sell your vehicle first privately, and then bank the money and look for newer or new model with your wad of cash. Also, always pay off your present vehicle free and clear with no liens and you will never be upside down as so many are and then you are at the mercy of dealer. No wonder so many are losing their homes and vehicles as they are upside down with their mortgage and their vehicle.

 

My vehicle has been paid off for two years, and if and when I decide to replace it I will sell it privately first and then figure out how much money I have to put downpayment down on new vehicle. I have better things to do than be insulted by a dealer trying to make money on the front end and back end of a new vehicle purchase. Most dealers are greedy and aim for making money on both ends of deal.