GM Joins Ford Worrying About Declining Used-Car Prices
- Values drop faster than anticipated, including on crossovers
- Used-car prices in GM Financial portfolio to drop 7% this year
General Motors Co. world headquarters stands in Detroit, Michigan, U.S., on Wednesday, Aug. 18, 2010. General Motors Co. may sell preferred stock alongside its initial public offering of common shares, according to a draft of its regulatory filing and two people briefed on the plan.
Photographer: Jeff Kowalsky/BloombergGeneral Motors Co. said a glut of used cars will return to market after their leases expire and drag on its finance unit this year, following similar warnings by peer Ford Motor Co. and lenders such as Ally Financial Inc.
The prices of used cars in GM Financial’s leasing portfolio will decline about 7 percent this year, GM Chief Financial Officer Chuck Stevens said on a conference call with analysts Thursday. The value of used GM vehicles have depreciated faster than expected in the first quarter, particularly with crossovers, and prices will fall as much as 3 percent next year.