There's no doubt that used Mercury values will be affected by the brand's closing. As I mentioned in my Mercury closing blog posting, the closing affects you in different ways depending on what you plan to do with a used Mercury.
If you own a used Mercury and plan to run it into the ground, you have nothing to worry about. You are still going to be able to get your Mercury worked on at a Ford or Lincoln dealership. The repair center is the fiscal heart of any dealership. There will be no shortage of parts or people to work on Mercurys for years to come. There is no reason to sell your used Mercury if you plan to run it into the ground.
Also, as I pointed out in my blog, the drop in value of your used Mercury is also going to mean lower property taxes (if you live in a place like I do where you pay property taxes on used cars).
It's still good to be a used Mercury buyer because you're going to find good deals on Ford's stepsister brand. As Automotive Leasing Guide reports, as of June 28, 2010, "While Mercury's used brand value had been on an upswing since 2008, minimal differences between competing Ford models with similar equipment and styling, coupled with unexplained price discrepancies, resulted in sales figures and demand that have declined swiftly over the last few years. Currently, Mercury's used brand value is 12% below the industry average, and ALG has forecasted it to decline an additional 5.5ppts by 2013."
Do you own a used Mercury that you plan to sell or trade in? Well, there's some bad news. My estimate would be its value will drop 10% right away and stay depressed when compared to similar Ford products.
For example, on June 3, 2010, the day after the announcement, a 2006 Mercury Grand Marquis had a trade-in value of $9418. Sites like Edmunds typically update their values once a week. By July, I would expect that value, all things being equal, to be down around $8500.
The private party value as of June 3, 2010 was $10,943. That price, too, should drop 10% to around $9800. So, to get trade-in value for your used Mercury, you're actually going to have to sell it yourself.
UPDATE: I was too conservative in my estimates. As of June 29, 2010, the trade-in value of a 2006 Mercury Grand Marquis wsa $8046. Used Mercurys are just getting beaten up at dealerships. Private party values have held up a little better. The value there has dropped to $10,215, which is better than the $9800 I predicted.
Are you planning to buy a used Mercury? Well, just like trade-ins, your purchase should cost you less. The best time to buy a used Mercury is now while the news of Mercury closing is fresh in the collective mindset.
Expect to see savings on a certified pre-owned Mercury as the closing of Mercury dealers commences. Ford is going to pump money into Mercury dealerships to help rid them of inventory in the form of incentives and cash back for new cars and certified pre-owned Mercurys.
The big problem, though, is there may be little cost difference between a new Mercury and certified pre-owned Mercury by the time financing is thrown in. It's painful to say this on a used car website, but if the difference between a new Mercury and used Mercury is less than 5%, you strongly have to consider the new model - especially if you plan to keep your Mercury for a long time.
Here are some of the highlights with regards to Mercury, according to a Ford press announcement:
- Ford will end production of Mercury vehicles in the fourth quarter of this year to fully devote its financial, product development, production and marketing, sales and service resources toward further growing its core Ford brand while enhancing Lincoln
- Existing Mercury owners to receive continued access to parts and service support at Ford and Lincoln dealers; current Mercury vehicle warranties and Extended Service Plans will be honored; special offers available on new Mercury vehicles through the summer
- Affected dealers to receive specialized support during the transition, as the company continues its transformation to a more profitable dealer network.
