03vsariant..you are seeing the main problem with a Dodge purchase. Dodge/Chrysler/Jeep products have been notorious for not holding their resale value, and it apparently hasn't changed even with the glowing reviews on the new RAMs. It also doesn't bode well for Dodge that dealers are knocking 7-8000 dollars off the stickers to move these trucks. I have my own company, and my trucks are up for lease.Dodge is basically selling their mom out to try and move a few trucks. I don't see this with Chevy or Ford. I don't care about resale since I lease, but the common thread out there with people in the auto industry is do NOT buy a Dodge product..only lease it. Maybe that will change over time..who knows? That being said..I am leasing 3 of the Dodge Ram 1500's..fully loaded, SLT's with sport package, 4X4, chrome wheels, hemi motor..for 285.00 each per month for 36 months with 5000 down. The dealer (and 4 others I went to) knocked anywhere between 6 and 8500 dollars off the sticker to try and make the deal. Chevy and Ford dealers just shook their heads, as GM and Ford aren't factory subsidizing the dealers to move their trucks..they don't have to. Irregardless, the Dodge deal is too good of a deal to pass up.
First, I think the statement about Dodge truck resale being so poor is too broad and needs some qualification.
Poor resale value is not associated with the Dakota series. And in the Rochester, New York area, there are quite a few purchased fleet Dakotas. Frontier Telephone and Rochester Gas & Electric are just two major purchasers of Dakotas. My neighbor was the fleet asset manager for the Frontier Telephone vehicles until Global Crossing sold Frontier off. He told me that they were an exceptionally solid truck with the lowest maintenance and repair cost each year they've had them, and had better "resale value".
If you look at nationally published raw numbers the Dodge RAM will be less than a Chevy or Ford, that's true. But those figures by themselves are misleading. The true "value" of any automotive model is determined by the delta between the actual fair market value and what was paid for the same vehicle when new.
If you look at industry sales analysis you'll find that that the mean average sale price of the GM or Ford truck when new is higher than the Dodge. This means that, despite the manufacturers retail price (sticker price), the average Dodge truck owner gets a higher percentage off of the purchase price. Hence the actual value is the difference between price paid and fair market value and generally an advantage for the Dodge owner.
Secondly, GM and Ford both have entrenched market share and a higher loyalty factor than Dodge. Market rules will always dictate value. The fact that the name on a truck is "Dodge," "Ford," or Chevrolet" is not what influences used value by itself. It's determined by the local market. The average price paid for GM or Ford trucks is higher because they have a larger population of loyal prospective buyers that will pay the extra price because that's the only truck they'll own, and dealers know this.
In addition, fair market values are not geographically universal. There are some parts of the country where Dodge trucks recover a higher percentage of their original purchase price than competetive makes. In western New York State, Dodge returns value at a better than national rate. You'll find this pattern with GM and Ford trucks as well (Ford is tradionally very strong in the southeast).
As I look at the latest issue of my local Auto Trader I notice that there are 135 Chevrolets, 84 Fords, and only 11 used Dodge RAMs. This is a typical "supply-and-demand" market. And the prices advertised seem to reflect that. Despite the "Dodge factor," the advertised prices are right in with the GM and actually appear slightly higher than the Ford prices, year-for-year, equipment-for-equipment comparisons.
Despite what any dealer will offer you, check out your area Auto Trader (or equivilent publication)of advertised prices and do the comparison yourself. You might be surprised.
Dusty- According to my sources, the ENTIRE Dodge line is known for their poor resale value.
I have family, and close friends who are in the car biz..some are wholesalers, some own million dollar dealerships, and some are auctionhouse owners. I made a few calls before buying the Rams, and all verbally read me, or faxed me what the Dodge trucks are bringing thru either an auction house, or in the latest "black book". They were low when compared line for line on a comparable Ford or Chevy.
The most accurate resale prices are based on a nationwide system of dealers, wholesalers, insurance co, banks, and auction houses. These are logged into databases such as those from NADA, Dealership Black Books, Auctionhouse Sale Log, etc. These results are then updated bi-weekly to give an accurate rolling data on any given make or model.
Edmunds, NADA (consumer version) and Kelly are just general guidelines for buying and selling your car or truck. The NADA consumer publication seldom jives with the dealer only editions, or Black book editions that only dealers or wholesalers have access to.
Irregardless, no sense in arguing a fluid market place. I have taken the Dodge plunge, and will see how it turns out.
If your Chevy and Ford dealers aren't discounting their trucks at the same level as the Dodges, they have an ego problem. Right now, all the manufacturers are offering $3,000-$4,000 rebates (from the factory) across the line for the most part. Any of these vehicles should be bought for no more then $500 over invoice. I paid $8,200 less than sticker for my Tahoe last fall. A month ago I bought an '03 Ram 3500 and priced/compared the Chevy and Ford 1-tons as well. They were all +/- $1,000 even though Ford wasn't offering as big of a rebate on the 6.0L Diesel.
I deal in fleet leasing (mainly heavy equipment) and have access to residual rates for motor vehicles. Resale value of the big three are generally +/- 1%-2% between brands. That is very minimal at best. Some models have better-than-average resale (like Tahoe, Suburban, etc) but generall the trucks are about the same. Edmunds has a feature in their new vehicle research that shows "true-cost to own". In that is depreciation estimates based on historical values. If you compare percentages they're very close to actual residual values calculated for leasing. In every year (1st - 5th) the depreciation is within 1% between brands on similar trucks.
If you want to argue a Toyota will hold it's value better, no complaints from me. The Toyota has much less depreciation, particularly in the first three years. If you keep it long-term then there isn't as big of a gap.
Resale value is the main calculation in leasing so you should be very concerned about it. Assuming you can get similar up-front prices and identical interest rates, the vehicle with the best resale value should be the cheapest to lease.
Maybe you just have some funky dealers in your area. The local Chevy/Jeep/Chrysler/Dodge dealer is a dope. He trys to sell with small discounts and won't even negotiate anywhere near invoice. I drive 30 miles west and the Chevy, Jeep, and Dodge dealers will sell at/around invoice all day long. Their service departments are far superior and worth the 1/2 hour drive.
I have a May 16th printout here on 3 year lease residuals @ 12,000 miles. Ext Cab Chevy Silverado at 52%, Extended Cab Ford F150 at 51%, and Dodge Ram 1500 at 48%. All are fully loaded. The big kicker is at 15,000 miles the Chevy and Ford drop to 51% and 50% and the Dodge drops to 45%. That is unacceptable IMO, and shows that even the factory knows it can't recoup its money from the Dodge Ram. The one exception I do have on the Ford is the Harley-Davidson model at 48%, 3 years 12,000 miles. Of course, it is a special edition model and Ford probably doesn't want to lease it- same as with their SVT line.
Actually..resale value has nothing to do with the leasing formula..the residuals do. The residual is not the resale value, its what the FACTORY thinks the vehicle will be worth at the end of the lease, not what the marketplace says it will be worth. Many times the vehicle isn't worth the projected number, which makes all this even more confusing. The lease payment calculation is done off the residual, capitalized cost, and money factor. The factories do a fair job in estimating out what they think the vehicle will be worth in 3 or 4 years. Of course, resale value is important to them, as that is what they base the residuals off of- what the vehicle actually brings in the marketplace at 3 years of age, vs. what they thought it was worth. Too many years of overrated residuals vs real world market prices can put a company under quick. Just ask Toyota. Again, the residuals show what the marketplace has done in previous months or years. The Dodge residuals show my point on future resale value. They don't hold up to those of Chevy and Ford.
Resale values are only important to an individual if you plan to buy the vehicle out at the end of the lease term. Thats the beauty in leasing..if the vehicle is not worth the buyout, you can walk away and re-lease. If the buyout is less than what the vehicle is worth, then you can buy it out, and make some money back on it.
As I stated before..its really all insignificant to me- as a corporation, my down payments and lease payments are 100% deductible from the bottom line. But if I was buying/leasing as an individual, I certainly would do some serious homework on both the lease and buying ends of a transaction.
I'm kept my terminology extra simple by saying resale value. Technically, you're right that residual is the correct term although outside a factory lease package, historical resale directly effects residual. Factory residuals are not always a "fair estimate" of what the vehicle will be worth in three or four years. In many cases, the factories will use residuals and money factors as tools for making a vehicle deal more attractive. Same way they use 0% financing. The fact that the SVT and HD trucks having less resale value (on paper) than the other trucks tells you something right away. They know they can make more money on them so they're adjusting the residual. According to my commercial rates, a typical GM, Ford, or Dodge truck are all +/- 1% on residuals based on msrp.
You must look at residuals posted by commercial lending institutions if you want to be closer to resale value. They are much less likely to "inflate" the residual in order to sell the financing. Manufacturers also have a more direct route to resell a vehicle that's turned in on a lease and higher profit potential which is beyond a typical wholesale figure. Many commercial lenders have gotten away from leasing cars/pickups because of this somewhat unfair advantage the manufacturers have.
I believe you are quoting the manufacturers residual buy-out for commercial lease program. If so, you must understand that manufacturers are motivated to inflate the residual to entice sales. If they buy it back they've already made money on the original sale. Their turn-around program will take less of a margin, but they'll still make money.
In leases enough leasees buy out that it makes the inflated resiual price worth it, bottom line.
But....there still is the basic question of how much did you pay for a similarly equiped Dodge, GM, or Ford? Those prices are never the same -- at least in my experience -- and the delta ends up most often being a complete wash since you can more often buy the Dodge for less.
Hi Dusty- Nope, those are not commercial terms..these are basic individual lease rates. The commercial rates while lower, are basically the same percentage points apart across the board.
Its not a point of what I paid, or will pay for the Dodge..its just my point that the RAM doesn't hold its value like a Ford or Chevy (or Toyota). Which brings me back to my other point of that its of no huge consequence to me, since I don't buyout my leases, I turn them back in, write off the down payment, and go from there. I'm just simply looking from the point of the Average Joe, and have been there from the individual leasing standpoint.
And since the Toyota leasing debacle a few years back- I know of no manufacturer "over-inflating" their residuals. Toyota took a huge, huge loss, almost to the point of bankruptcy, on tens of thousands of leases that had inflated residuals.
Consumers and commercial customers found out the vehicles were not worth what Toyota had guaranteed them to be worth and turned them in en-masse prompting Toyota to overhaul their entire leasing program. Their residuals now are more in line with the Big 3, and other import manufacturers.
Do you guys have any comments on how the new RAM will fair with situations like mine? I really like the truck..although the front end sucks, the interior is much improved, and the ride seems to be more "solid" then my 2001 Silverado I'm leasing now. Not as many creature comforts (I love the Onstar and Satellite radio features in the Chevys)..but the Dodge gets points for its engine and sport package option, and I love the 20" wheels, too. It seems like it should fit the bill.
Do you guys have any comments on how the new RAM will fair with situations like mine?
I don't think we know anything about your situation beyond the following:
1. You're leasing a couple Dodges
2. Chevy & Ford dealers in your area are apparently not discounting their trucks
3. You believe Dodges have low resale value
4. You like creature comforts, 20" rims, and the dodge interiors
We've addressed your concerns about resale value. I'm not sure why the Chevy and Ford dealers in my area have $6,000-$9,000 discounts but yours are selling at a premium. What other situation would you like us to address?
I don't know about the GM dealers, but Ford dealers in this area are discounting trucks very heavily. Ford truck sales are way down around here, and I've heard of $7500 discounts on F150s. The used car market is being flooded right now with Explorers and GM pick-ups which have hurt resale values on those two models. In the case of GMs, it appears that the piston slap problem is is also an issue for '99-'02s GM pick ups.
The resale rates are based on MSRP though so you have to take into account what people actually pay. My Ram had a MSRP of $31,500 and is a pretty loaded Hemi Quad cab 2wd with sport package and 20" wheels, but I only paid $25,500 for it. Now a few years down the road maybe it will only be worth $14,175 or 45% of MSRP while a $31,500 Chevy may be worth $16,380 or 52% of it's MSRP. That's is $2,200 more but then again I couldn't find anything close to 4 full size doors, 20" wheels, and 345 HP in the Chevy line for anything resembling $25,500. The closest thing to my truck is the Harley Davision Ford and it is much much more then $25,500. The Chevy SS is similar to my truck in the 4x4 Laramie trim which would have cost me $5000 more, so under $31,000 yet the SS is almost $40,000. This resale really goes out the window when comparing something like a Grand Caravan to an Honda minivan. Their MSRPs may be similar but Honda limits supplies artificially increasing demand and never offers rebates. The Same Dodge will sell for $6000 under MSRP. So down the road when the Honda is worth even as much as $6000 more technically it's true resale value (based on what somebody really paid not MSRP) is less. Now if you are out there buying Dodges at MSRP then you are just crazy, there are to many dealers that will sell near invoice or lower and just wait a year after a new release and there will be rebates. Even my Hemi which had only been out 2 months in the 1500 series had $3000 in rebates.
I don't know what the story is really. I priced an F-350 and a Ram 3500 when I was shopping a few months back. I also vaguely priced the GMC 3500 but due to option packaging I couldn't get one with a six-speed the way I wanted it.
Anyway, back to pricing. The GMC dealer told me they would sell for $300 over invoice plus I get any and all rebates/incentives. That would have made the GMC about $3,000 less than the Dodge but without leather and some other options. The deal the Ford dealer worked up was $40,700 plus a $1,000 rebate. The Dodge was $40,100 plus a $1500 rebate, plus I had an "owner reward" rebate of $500 plus a $500 farm bureau rebate. The Dodge worked out to be $2200 cheaper. Considering the Ford Crew-cab is larger and I had $1,000 in extra rebate money, it doesn't seem like a significant price difference to me. If I had walked in off the street, the Ford would have been $1200 more for a slightly larger truck.
Seems like the heavy trucks are fairly similar in price. Are the Dodge 1/2 tons that much cheaper than the other brands? I can't imagine as our local Ford dealer is constantly running full-page ads and the F-150's seem to be dirt-cheap to me. The one this morning says a reg. cab 2wd XLT, loaded, V8, auto for $19,010.
I think my point may have gotten lost in the mud, but Hersbird touched on it.
Based on industry analysis I've seen in the past, the average Dodge buyer purchased her/his vehicle at a greater discounted price from the MSRP than did Ford or GM buyers. So, when figuring the amount of money lost in depreciation ("resale value") on similarly equiped trucks, the reference point is not the factory invoice price, but the actual amount paid for the vehicle.
And of course the MSRP makes a difference, too. I compared a RAM to a F150, and regardless of trim line and optional equipment, the F150 always came out more expensive. I don't remember the exact amounts, but I believe that they all were more than the 48-52% delta ($1200) that spraywizard made reference to.
In addition, the longer one keeps a vehicle, the less "resale value" becomes. At ten years old -- the age of the last three vehicles I've owned at trade-in time -- the difference between a $1000 Dodge and a $1250 GM is not big money, IMO.
Another thing is actual trade-in value at time of transfer. There is statistical data on this particular feature, and again, the last time I saw that the average price given to a seller of a GM truck was lower than the national book values. A lot has to do with condition, and GM trucks are the first to suffer from corrosion around here. Despite the belief in the "GM factor," if the doors, rear cab sills, front and rear wheel lips, and body mounts are rusted through (typical for GM trucks in this area), it's not going to be worth as much as a Dodge or a Ford in otherwise solid condition.
Well you can get a regular cab, 2wd, ST Dodge, very basic, but with the all important Hemi for $17,000! That even has the automatic and 4 wheel ABS which is required for the Hemi. Now do you really mean the Ford is "loaded" or just "loaded" in the dealer sense of the word? Because you can get an SLT Ram with a regular V-8 and Auto that a regular dealer would consider 'loaded' for advertising purposes for $18,500, the Hemi would be about $19,500. Then if you really want "loaded" like swede leather interior, dual zone climate controls, big 20" chrome wheels, and every power convenience ever made then it might be another $5000. Also up until yesterday I think the rebates on the 2500 and 3500 series Dodges were less then 1/2 that of the 1500 series so the Dodge would compare even better today. To get a Ford optioned similarly to mine (well actually I'd have to settle for 100 less HP and little 16" wheels, but as similarly as I can get w/o getting the Harley version) it would have been $26,000 after and invoice deal and rebates. So I saved $500 but got a 345hp motor, bigger disc brakes, a great looking sport package, 20" wheels -vs- 16" wheels, better gearing (3.92 -vs- 3.55), a 5 speed auto -vs- 4 speed auto, a rear tonneau, power adjustable pedals, longer warranty, greater tow rating and class 4 hitch. So I could see getting the Ford if it were about $2000 less, but $500 more!? Really the only Ford that compares to my Ram is the Harley F-150 and although it adds that pretty 4 passenger interior (I really need 6) it costs almost $10,000 more.
Every car is hurting on resale right now, I don't care who makes it, the market is just flooded with great 3 year old cars for almost 1/2 what they were new.
I agree with what you said in your last post..but you have to ask yourself WHY Dodge is discounting their trucks 8-9000 right now. What reason could it be? If Chevy and Ford are in the 4-6 grand range of discount (and a couple quick calls made yesterday to a couple buddies in PA, and one in TX confirmed thats the average discount) why does Dodge need to go almost 3 grand BELOW those numbers?
Unfortunately, what a new vehicle actually sells for does not figure statistically into resale values. They do use a nationwide percentage off MSRP across the board as a reference, but as you point out, its usually not even close to what you actually get the vehicle for.
Dodge has a nationwide factory incentive program that just started with an 8500.00 direct discount on Ram pickups. Up from 7000.00 a few weeks ago.
Ford and Chevy are discounting in my area, too- I mean, the auto industry in general is taking a bath. I know Dale Jarrett Ford in Charlotte, NC is offering 5000 dollars off MSRP AND 0% financing for 60 months on F150/250's. Thats a killer deal.
Chevrolet is probably in the area of 4-5000 dollars off, too in my area, although I didn't sit down with them and hammer out the numbers as I knew I was going in a different direction this time.
Either way, its a buyers market.
I'm also sorry you feel your "points" were lost in the mud. I don't consider someones opinion on something "mud". I stand behind my points, and can post revelant info from auction houses and dealers that back my point. I simply was trying to have some conversation. I certainly am not knocking the Dodge product- to be blunt I can buy anything I want, Ford Chevy, whatever. I chose Dodge, so I have to feel like I making a wise choice on the product.
However you want to cut it, the truth is the truth, and Dodge does not have the resale value of Ford or Chevy. No one has to take my word for it, all you have to do is get your hands on some auction or dealer books- or better yet go trade one in.
However it shakes out, I'm pretty excited about the 1500 in general. I'm anxious to see how it compares to my Silverado and the Ford Lightning I had a couple years back.
Just a quick point to keep in mind..the 20" wheels on the Dodge really negate the 3.92 ratio. You really have more of the stock ratio in theory.
The same thing happened to me on the Lightning I had..it came with a 3.80 ratio (up from the 3.55 the F150's came with) so I thought I really was moving up in the world. Then a buddy of mine who races drag cars told me that the gear ratio was nice, but since the Lightning came with 17" rims, the gear ratio was more like a 3.55 on 15" rims. I never knew that!
Dodge has a nationwide factory incentive program that just started with an 8500.00 direct discount on Ram pickups. Up from 7000.00 a few weeks ago.
What are you talking about? Where are you getting the info for these discounts? I've never seen a $7,000 factory incentive on a Dodge or any other non-luxury brand, let alone $8500.
Current factory incentives on most trucks:
Ford $2500 or special financing Chevy $3,000 or 0% financing Dodge $2500 or 0% financing
Any discounts beyond that are between the consumer and dealer. There's no reason any of these trucks can't be bought in the ball-park of invoice. My '02 Tahoe and '03 Ram were all bought within $300 of invoice. The Tahoe was about $8,000 off sticker and the Ram was $7,000 off sticker. Those numbers are close to what you posted above, but they're NOT "national incentives".
My family owned a large multi-brand dealership before selling a few years back. I now have a heavy-equipment leasing company but certainly know how this industry works and have access to vast resources of residuals/resale values. There's definetely some confusion going on here.
Now do you really mean the Ford is "loaded" or just "loaded" in the dealer sense of the word?
I would never assume a dealer advertising a vehicle as "loaded" would mean every possible option. An F-150 XLT is more than "loaded" for advertising purposes. I'm sure this was a basic XLT with V8 and automatic, probably the smaller V8. You typically don't advertise "fully optioned" vehicles on these generic ads.
Typically "well equipped" means air, stereo, 4 tires, LOL!
You said..."Dodge has a nationwide factory incentive program that just started with an 8500.00 direct discount on Ram pickups. Up from 7000.00 a few weeks ago.
Could you point me to a link please, or at least elaborate a little?
I am thinking of purchasing a Retrax retractable bed cover for my '03 1500 Quad Cab Hemi. I am impressed with the quality. Having had only soft tonneaus in the past, I am curious if the retractable covers are noisy on the highway. I would appreciate any comments from those who have this type of cover. Also, how weathertight are they?
The size of the wheel doesn't make a difference in the overall effective gear ratio, only the diameter of the tire installed on it. The Diameter for the upgraded 17" tire on the 2wd Dodges is the same as the one installed on the 20" wheel, 31" overall. The 20" just has a lower profile tire then the 17", and the 17" is the minimum the new Dodge can use because of the size of the brakes! I'm not giving up any effective gear ratio by choosing the 20's, now maybe the ford uses some little girly tires that would give a better effective gear ratio then 3.5:1 but in the Dodge world short of the basic tires found on the no-option ST 2wds, 31" is the smallest diameter they make for the new Ram. Still I'll take 4.56 gears any day, especially considering that extra overdrive ratio the Dodge's 5 speed auto has.
Dodge already has on their website 4500 consumer cash on RAM 1500 trucks and various cars. Add in factory to dealer cash of 3000, plus another 1000 for dealer overstock. Only dealers are aware of the 4000 back money. I found out because the guy who sold me the trucks happened to coach my sister in little league baseball. I then confirmed it with the owner of the Dodge dealership. According to him, every 5 star Dodge dealer is running ad campaigns for 7500-8500 dollars directly off sticker.
I confirmed this with 3 Dodge dealers today, although all are located in the Southeast.
I'm pissed that I already signed the deal on my 2 trucks, but on the flip side, I may order a 2500.
Ram truck comes with 17 inch rims. Tires are 245/70/17. Tire diamenter of 30.5"
Add sport package- 20" rims. Tires are then 285/60/20. Tire diameter of 33.46.
If you keep the 3:55's in the rear and use the 20" rims and tires, your effective (actual) gear ratio is 3:24.
Hence the reason you get the 3:92 ratio with the Sport package. You end up with a 3.57 actual ratio. Thats how the gas mileage stays the same across the board.
The tire that comes on the vast majority of 2wd trucks (The new 1500 Rams that is) with the 17" rims is a 265/75/17. The 245/70/17 only comes on the most basic ST trucks w/o even the single option of a $300 value group which adds the 275 tires. All the SLT and Laramie trucks come standard with 275/70/17 and they are 31.8" tall. The 2 different stock 20" tire sizes are 275/55/20 for the 2wd (which is what I have) and 275/60/20 for the 4x4. The 2wd 20's are 31.8" tall according to goodyear (and my tape measure a these are the tires on my truck). So unless you get a ST 2wd with no options, then you will get at least a 31.8" tall tire on the 2wd no matter what wheel you choose.
The mileage is a completely different story. Contrary to popular belief the mileage often improves with lower gears (higher numerically) because the motor doesn't have to work as hard. maybe if all your driving is steady state, level highway cruising then you might see a small drop in mileage, but around town, towing, or in hilly country often the deeper gears get better mileage.
In a previous post, you made a few observations, including
"I don't see this with Chevy or Ford. I don't care about resale since I lease, but the common thread out there with people in the auto industry is do NOT buy a Dodge product..only lease it. Maybe that will change over time..who knows?"
I'd like to clarify a few things for the person you're giving advice to:
1. Chevy and Ford are offering rebates of around $3000 and selling at invoice price too. Where did you get the impression they're not discounting as much? I bought a '02 Silverado for $2002 under invoice last year for my wife to drive w/o any haggling. And the market is worse now than then.
2. Hate to tell you this, but the cost of leasing a vehicle is VERY dependent on its resale value, since the residual is based on this number, and the lower the residual vs. the cap cost of the vehicle, the higher the payments. Low resale value = high lease payments. There is NO way around this. It is a fact of leasing. Dealers love leasing because typical car shoppers don't understand leasing. Trying to avoid steep depreciation on a vehicle by leasing just doesn't work. It's factored into the lease price. Buy a fast-depreciating truck and you'll pay more to drive it in the end, lease or buy.
3. I leased a '97 Ram 4x4 SLT with upgraded stereo, and lots of options for 3 years with 15,000 miles a year. The residual factor was .63 then, very high, so my payment was only $359, including tax, with ZERO down. Try beating that! You can't get that kind of deal now because they got burned setting such high residuals in the past, but at the time it was considered realistic. But Dodges haven't always been dogs in terms of resale value. I agree my '00 Tundra is better, probably due to their reputation for long term reliability, but it's not as big a difference in the big picture as you'd think. All full size trucks are relatively strong in resale value compared to cars and even compact trucks.
4. Other reasons he may have a hard time getting what he wants on resale for his nearly new truck: a- Lots of options. Other than a few select packages (4wd, or SLT, for example) most options do not bring much extra in relation to their original cost. A basically equipped Ram will hold a higher percentage of its value than a loaded Laramie. Some 1500 rams sticker at $37,000, other essentially similar ones at $28,000. People buying used often just want "a nice truck". Some will value options more than others, but the more options, the more depreciation. b-He may have paid "too much" or bought when few discounts were available, such as at launch time. Quite different than typical buyers buying at normal times. And normal for the current economy is invoice price minus rebates, at least here. c-The spread on a private sale vs. a dealer trade will be at least $3,000. Dealers have to make a profit and cover themselves with a sufficient margin to cover surprises on trade ins they take. On higher priced trucks, not being able to offering financing can affect the price he can get, but not to that degree. It's almost always better to sell it yourself. Most people can't float the cash to do this, so they are trapped into trading at the dealer and taking the hit. Dealers make more profit on their used car sales than new car sales. They love taking recent year model trades in at fire-sale prices. d- Yes, current rebates do affect resale value. But they're all doing it. And from trade magazines I subscribe to, they say GM is leading this trend, and that Daimler Chrysler and Ford do not like it, but feel they have to match them to compete. So DC can't be blamed for the low new truck prices. As an aside....check sticker prices and notice that prices over the last few years are rising far faster than usual, probably to offset the rebates. They're giving with one hand, and taking with the other. The true savings are probably far less than the rebates would suggest. But it's a good marketing trick to give customers the impression they're stealing the vehicles.
"And since the Toyota leasing debacle a few years back- I know of no manufacturer "over-inflating" their residuals. Toyota took a huge, huge loss, almost to the point of bankruptcy, on tens of thousands of leases that had inflated residuals"
According to the Clark Howard consumer radio show, lots of car manufacturers and banks overdid it on residuals and got stuck with vehicles they couldn't sell for what they hoped. My brother's Ford Expedition he leased also had a lower real value than the residual as it neared the end of the term. First Union actually called him up and they negotiated a purchase price that was far lower than the residual.
As for Toyota being near bankruptcy, I just read that Toyota has more CASH reserves than any other auto manufacturer, so I would be surprised to hear they were near bankruptcy in recent years. Where did you get this information? My source is Automotivenews.
There is no single set "residual". Any lessor can set whatever residual they want. Yes, they use info from ALG and other sources, but you'll often get an inflated "subvented" lease residual from the manufacturer's own financing arm. They take the hit as a cost of making the sale.
Being able to "write off" a lease payment doesn't mean you're not paying it. You're just not paying taxes on as much profit in your business. A 15, 28, or even 46 percent deduction is not the same as the 100% you save by getting the best deal possible on a lease or purchase.
Since residuals are usually expressed as a percentage of MSRP, merely finding a number such as .64 or .45 is meaningless. Some vehicles have higher initial markups than others, so even with a lower number, their resale value might be better, or vice versa. Also, as someone else said, if I can lease a Dodge at $3000 below invoice, and get a residual of .45 x MSRP, I might be better off than a Chevy leased at $2000 below invoice with a residual factor of .50 x MSRP. The only thing that matters is:
YOUR CAP COST - RESIDUAL VALUE IN $$$ = TOTAL DEPRECIATION
Here, I'd guess that a Chevy would indeed hold its value a little better, but you have to run the numbers to be sure. But with a 70K powertrain warranty on Dodges, that might not still be the case.
.........is many cases. In the Rochester, New York area there were so many Ford Explorers on used car lots that values fell precipitiously. One reason why my daughter and son-in-law kept their's until just a month ago. In that year values actually crept back up, enough to make trading possible.
I've been monitoring the area used truck market (western New York state) and used full-size GM trucks outnumber Dodge's by 12-1, Fords by 10-1. Supply and demand is in effect here. One dealer had 9 used full size trucks on his lot and 6 were GMs. He said he just wasn't interested in taking any more, that they hung around too long. Prices on used car-lot Dodge RAMs are just as high as GM and slightly more than Fords, in general, by my observation.
I am looking at purchasing a 2003 Dodge Ram Quad Cab 4X4 with the new 348ci engine and 20" wheels. The MSRP on this truck is $35,120 and I received a bottom line price of $25,303, which is almost impossible to pass by. The only thing about this truck I dont really like is the chrome clad wheels. I asked the salesman if they could swap these wheels for the Aluminum 20" wheels on a different truck on the lot but he said they couldn't do that. I dont really understand why because the wheels cost exactly the same as an option. Does anyone have any ideas how I could get the aluminum wheels instead of the "plastic" wheels on this truck, i would like to maybe purchase it tommarow.
"I dont really understand why because the wheels cost exactly the same as an option."
Are you sure???
Anyway, if that's what you want to do, take out the "maybe tomorrow" from the equation. Go in there tomorrow with a certified check for the deposit. Works a lot better than "If you do this, maybe I'll buy it!".
Actually that 348 ci on the sticker is a marketing math error, or an error carried forward by converting cubic inches to liters and then converting liters back to cubic inches. The "348" is really a 345 ci as calculated using cylinder volume which is how it's always been done. then they took that 345 ci and converted it to liters and got the 5.7L that they call the Hemi. Now it's not exactly 5.7L, that number is rounded off. So then the marketing guys converted the 5.7L back to cubic inches and got the 348 ci! Funny stuff, if they do that about 15 more times maybe they can call it a 426 Hemi again!
The price seems good, and I also prefer the polished 20's to the chrome clad 20's but I think there is a problem swapping them on the trucks because it's listed on the window sticker and it would be a problem selling the second truck with the options mislabeled on the window sticker. the cost of the options were the same when I bought my truck as well, so maybe they could order you in a set of polished 20's from the accessories catalog and swap them with you new chrome ones. Still there may not be enough profit in there to go through all the hassle, back when they sold cars at MSRP or more they would do just about anything you wanted, but now that the profit margins are slimmer they don't put as much effort into it. I'm sure you could order the truck exactly as you want it with the same discount off MSRP if not more, but then you have to wait, and actually they are probably past the cutoff for ordering 2003's. I'd say just get the truck with the chrome clad wheels and if there is a problem with them take them back under the warranty. If it proves to be something that happens a lot over the long 7 year warranty they will probably swap out to the aluminum ones anyway. the chrome clads are easier to clean, and do look better, I just wondered as you do if they will hold up, so I got the polished as long as I was ordering anyway.
Can anyone confirm or deny the $4000 of dealer kickbacks that have been commented on? I am getting ready to negotiate on a new Ram and would like to know if I can put this in my back pocket. The dealers around here seem real proud of their product, and I'd like something to knock them down a notch.
Also, has anyone heard if Dodge will be extending the incentives into June?
Interested to know what others are paying and where. I asked a salesman about the $4000 and he said it was a factory to dealer rebate and didn't seem interested in passing it along. I don't mind traveling to find the best deal.
I am negotiation right now for a 2003 Ram 1500. Window price is $31,980. Dealer knocks off $3500 cash. $2500 rebate, $1000 rebate for coupon I got in the mail and $500 rebate for being a farm bureau member. (membership is $42, don't have to be a farmer, just be a member for over 30 days to get the rebate) This is at a dealer in Omaha Nebraska. I suspect before it is done I'll get a few hundred more off once I decide what options I really want.
That sounds like a pretty good deal. Can you give me any information on the rebate coupon you got? That would help get me a little closer to where I want to be on this deal.
Apparently the dealers in Omaha want to sell trucks a little more than the ones in Kansas City. I'm getting stories about dealers in California that want the trucks for $1000 over sticker, so they can't sell them for less than that.
According to the dealer the coupons are just random mailings to people who have done business with Dodge in the past. The one I got was for a different dealership than the one I usually use. This one I had an oil change in the past and sent in a coupon to get a free 1/43 scale model of a 2002 Ram Quad cab. I request brochures all the time from different brand over the internet. I have gotten cards good for $50 at Blockbuster from Oldsmobile, A Bosch cordless 12 volt drill from Ford and a Lady's watch from Nissan. All just required a test drive of the model I got the Brochure on previously. The $1000 coupon from Dodge is for the person named on it, not transferable except to a member of the immediate household living at the address on the Coupon. Dealership has no input on who gets the mailing, sorry. Jim's Dodge and Woodhouse Dodge in the Omaha metro are the most aggressive dealerships for discounting. Maybe a phone call before you make a trip. Both are 5 star dealerships and their inventory can be searched on-line through the Dodge web site. Just use 68114 as the zip code when you do a search.
I am considering a 2 wheel drive Ram 1500 Quad Cab and can't seem to find any real world reports of gas mileage. The sticker say 14/18 however the on board average MPG display seems to indicate more like 12.9 on the one I drove holding a steady 60 MPH on the interstate. Almost all the Hemi's I've found seem to have the towing package with the 3.92 gears. Any input would be appreciated as I'm leaning toward the 4.7 based on my experience with it in my 2000 Dakota Quad Cab of 18 to 21 highway with a steady 65mph.
Seriously considering buying a 2001 Ram 1500 Sport Quad 4X4 with 28,000 miles from a local dealer. It's black and in excellent condition. I would appreciate any suggestions as to what to look for when evaluating the trucks condition - engine, tranny, etc. It had the 5.9L engine - is that the one that is noted for pinging? Thanks for the advice as this is my first pickup.
I think the pinging issue was common to the LA engine series (3.6 V6, 318 and 360), and was more related to intake manifold gasket leaks than anything else. I've known a few owners with high mileage RAMs that had that problem. They did change gasket design about that time, but I can't tell you if your particular 2001 would have the improved version.
Another common weakness is the track bars on 4x4s. This is not a big dollar item, but annoying still the same.
2001s were pretty good trucks from what I could tell.
I'm reading reports of $4000 manufacturer to dealer cash here, can anyone confirm that this is true? If so, I would think sub-invoice deals would be easy to get. Can anyone give some solid information on pricing?
Thanks for the advice Dusty. Unfortunately, the deal fell apart so it's back to square one. The good news is there seems to be a lot of nice 2000 and 2001 Rams in our market [Western PA]. Are the 2000 Rams holding up as good as the '01's? What is an LA engine? Thanks again.
The previous RAM series based on a platform that was introduced in 1994, had two notable areas of reliability weakness: automatic transmissions and intake manifold gasket failures. The transmission problems were related to marginal cold weather fluid flow to the overdrive unit. This made trucks used for towing or snow plowing more susceptible to pre-mature failure, and was especially more likely to happen to 4x4 trucks equiped with the 360 engine. This was addressed in 1998 with a significant improvement to fluid flows in the entire truck auto transmission line, as well as revised shift solenoid packs that were also troublesome.
Chrysler "small block" motors have a mixed lineage. Prior to 1967, the small block 90 degree series were known as "A" engines. These utilized a polyspherical combustion chamber (in today's parlance, a "semi-hemi") and are most distinguishable by a very wide top-engine platform and scalloped valve covers. This included a 241 (Hy-Fire), 270, 277 (Red RAM), a 303 (later replaced by a 301 cid), and a 318 cubic inch motor that was available up through 1966.
It's the 318 that is the most cause of confusion. In 1964, Chrysler introduced a completely new "small block" series utilizing wedge combustion chambers with the 273 cid. This was refered to as the "LA" engine and was used initially in Valiants and Darts exclusively, later added to the mid-size Dodge and Plymouth lines in 1968. In 1967, Chrysler pumped the 273 out to 318 cubes and replaced the older poly-head 318 with this motor. Another "LA" engine, the 340 cid, was released in 1968. In 1973, the "LA" 360 cid was introduced.
Chrysler's assembly quality has been generally good in the '90s, especially true of their truck line. Most problems in this era have been related to spotty component quality, a condition that Ford & GM have suffered with as well. This is what happens when you force suppliers to low profit margins. Of the Dodge technicians I've spoken to, the opinion is that from 1998 onward, quality in the Dodge truck line has steadily improved.
You can't use 2 certificates in one transaction at the dealer. The Farm Bureau is a certificate as is the $1000 certificate you received in the mail. I bought my ram thinking I was going to get both as well (although the one I got in the mail was only $500) but after reading the fine print they sprung it on me! Still $3500 off is more then most anyone else has got. I got $3000 in rebates total and another $3000 off MSRP on a $31,500 truck for a total of $25,500 and just love it. It seems like you get so much for your money with one of these trucks!
I used my $500 owner loyatly certificate along with a $500 farm bureau discount, (in addition to the rebates) on an invoice deal with no trade. This was on a 3500 HO Cummins Laramie back in March.
I believe there is a $300 rebate program on Dodge Trucks for commercial customers. Check their website. They tell you what kind of proof you need to provide. I'll be using the Farm Bureau rebate. You can't use both.
read the certificates carefully and it says you can only use one. If they allowed it I bet Chrysler shot it down when it got to them and they just ate the added $500 cost out of the holdback which was probably over $1000 on you truck. Then you can bet the nexy guy that came along didn't get the same deal! I was pretty close to getting it too until a sales manager caught it at the last miniute, and I even had them call the regional manager to check who I spoke to directly. I was kind of irked but then again it was an honest mistake, and I did get the extra certificate last minute, about 2 days before my truck came in after waiting 7 weeks for the order. So it was kind of spring on them as well! Still the rebate did go up $500 from the time I ordered it to the time it came in so all and all I did get $500 more off then I originally planned for anyway! Like I said before, my truck is worth every penny of the $25,500 it cost, but then again $1000 more off for a few accessories would have been even better!
Dusty - thanks again for the engine explanation. I have spoken to a number of Ram owners and most are satisfied with their decision to go with the Dodge. sebring95 - I see you have gone from the Cherokee forum to the Ram discussions! Glad to hear from you again. I am following in your footsteps and have the "For Sale" sign on the Cherokee. I have hopes of a Dodge Ram in my future.
Ah, I've been here awhile. Had a 2001 3/4 ton Ram before this one, but bought a bigger trailer and needed a 1-ton. I was going to keep my 3/4 Ram but decided to sell it and the Cherokee. I'm shopping for a used Tacoma for my light-hauling/off-roading/snow driving. The 1-ton is a dedicated tow rig. I had cash in hand within a week on the 3/4 ton, the Jeep is still up for sale with no potential buyers. Dropped the price again but the market is flooded to say the least.
My uncle has a '97 Ram similar to what you're shopping for. He has over 280k miles on it now and the engine still runs flawlessly. Tranny was rebuilt around 200k miles and most mechanical items have been replaced (bearings, starter, fuel-pump, etc). My 3/4 ton had about 110k miles and the only repairs was front bearings at 80k miles but Dodge picked up the tab.
I would look for a mid model year 2001 3/4 ton myself as they made some improvements. My '01 had the mid-model year improvements which was the nicer towing mirrors, upgraded brakes, and some other things. I replaced the factory pads at 80k miles with the bearings and they still had plenty of life. Factory rotors were still on it as well. I don't think the 1/2 tons got those upgrades.
Comments
That being said..I am leasing 3 of the Dodge Ram 1500's..fully loaded, SLT's with sport package, 4X4, chrome wheels, hemi motor..for 285.00 each per month for 36 months with 5000 down. The dealer (and 4 others I went to) knocked anywhere between 6 and 8500 dollars off the sticker to try and make the deal.
Chevy and Ford dealers just shook their heads, as GM and Ford aren't factory subsidizing the dealers to move their trucks..they don't have to.
Irregardless, the Dodge deal is too good of a deal to pass up.
Poor resale value is not associated with the Dakota series. And in the Rochester, New York area, there are quite a few purchased fleet Dakotas. Frontier Telephone and Rochester Gas & Electric are just two major purchasers of Dakotas. My neighbor was the fleet asset manager for the Frontier Telephone vehicles until Global Crossing sold Frontier off. He told me that they were an exceptionally solid truck with the lowest maintenance and repair cost each year they've had them, and had better "resale value".
If you look at nationally published raw numbers the Dodge RAM will be less than a Chevy or Ford, that's true. But those figures by themselves are misleading. The true "value" of any automotive model is determined by the delta between the actual fair market value and what was paid for the same vehicle when new.
If you look at industry sales analysis you'll find that that the mean average sale price of the GM or Ford truck when new is higher than the Dodge. This means that, despite the manufacturers retail price (sticker price), the average Dodge truck owner gets a higher percentage off of the purchase price. Hence the actual value is the difference between price paid and fair market value and generally an advantage for the Dodge owner.
Secondly, GM and Ford both have entrenched market share and a higher loyalty factor than Dodge. Market rules will always dictate value. The fact that the name on a truck is "Dodge," "Ford," or Chevrolet" is not what influences used value by itself. It's determined by the local market. The average price paid for GM or Ford trucks is higher because they have a larger population of loyal prospective buyers that will pay the extra price because that's the only truck they'll own, and dealers know this.
In addition, fair market values are not geographically universal. There are some parts of the country where Dodge trucks recover a higher percentage of their original purchase price than competetive makes. In western New York State, Dodge returns value at a better than national rate. You'll find this pattern with GM and Ford trucks as well (Ford is tradionally very strong in the southeast).
As I look at the latest issue of my local Auto Trader I notice that there are 135 Chevrolets, 84 Fords, and only 11 used Dodge RAMs. This is a typical "supply-and-demand" market. And the prices advertised seem to reflect that. Despite the "Dodge factor," the advertised prices are right in with the GM and actually appear slightly higher than the Ford prices, year-for-year, equipment-for-equipment comparisons.
Despite what any dealer will offer you, check out your area Auto Trader (or equivilent publication)of advertised prices and do the comparison yourself. You might be surprised.
Best regards,
Dusty
According to my sources, the ENTIRE Dodge line is known for their poor resale value.
I have family, and close friends who are in the car biz..some are wholesalers, some own million dollar dealerships, and some are auctionhouse owners. I made a few calls before buying the Rams, and all verbally read me, or faxed me what the Dodge trucks are bringing thru either an auction house, or in the latest "black book". They were low when compared line for line on a comparable Ford or Chevy.
The most accurate resale prices are based on a nationwide system of dealers, wholesalers, insurance co, banks, and auction houses. These are logged into databases such as those from NADA, Dealership Black Books, Auctionhouse Sale Log, etc.
These results are then updated bi-weekly to give an accurate rolling data on any given make or model.
Edmunds, NADA (consumer version) and Kelly are just general guidelines for buying and selling your car or truck. The NADA consumer publication seldom jives with the dealer only editions, or Black book editions that only dealers or wholesalers have access to.
Irregardless, no sense in arguing a fluid market place. I have taken the Dodge plunge, and will see how it turns out.
I deal in fleet leasing (mainly heavy equipment) and have access to residual rates for motor vehicles. Resale value of the big three are generally +/- 1%-2% between brands. That is very minimal at best. Some models have better-than-average resale (like Tahoe, Suburban, etc) but generall the trucks are about the same. Edmunds has a feature in their new vehicle research that shows "true-cost to own". In that is depreciation estimates based on historical values. If you compare percentages they're very close to actual residual values calculated for leasing. In every year (1st - 5th) the depreciation is within 1% between brands on similar trucks.
If you want to argue a Toyota will hold it's value better, no complaints from me. The Toyota has much less depreciation, particularly in the first three years. If you keep it long-term then there isn't as big of a gap.
Resale value is the main calculation in leasing so you should be very concerned about it.
Assuming you can get similar up-front prices and identical interest rates, the vehicle with the best resale value should be the cheapest to lease.
Maybe you just have some funky dealers in your area. The local Chevy/Jeep/Chrysler/Dodge dealer is a dope. He trys to sell with small discounts and won't even negotiate anywhere near invoice. I drive 30 miles west and the Chevy, Jeep, and Dodge dealers will sell at/around invoice all day long. Their service departments are far superior and worth the 1/2 hour drive.
The one exception I do have on the Ford is the Harley-Davidson model at 48%, 3 years 12,000 miles. Of course, it is a special edition model and Ford probably doesn't want to lease it- same as with their SVT line.
Actually..resale value has nothing to do with the leasing formula..the residuals do. The residual is not the resale value, its what the FACTORY thinks the vehicle will be worth at the end of the lease, not what the marketplace says it will be worth. Many times the vehicle isn't worth the projected number, which makes all this even more confusing.
The lease payment calculation is done off the residual, capitalized cost, and money factor.
The factories do a fair job in estimating out what they think the vehicle will be worth in 3 or 4 years. Of course, resale value is important to them, as that is what they base the residuals off of- what the vehicle actually brings in the marketplace at 3 years of age, vs. what they thought it was worth. Too many years of overrated residuals vs real world market prices can put a company under quick. Just ask Toyota.
Again, the residuals show what the marketplace has done in previous months or years. The Dodge residuals show my point on future resale value. They don't hold up to those of Chevy and Ford.
Resale values are only important to an individual if you plan to buy the vehicle out at the end of the lease term. Thats the beauty in leasing..if the vehicle is not worth the buyout, you can walk away and re-lease. If the buyout is less than what the vehicle is worth, then you can buy it out, and make some money back on it.
As I stated before..its really all insignificant to me- as a corporation, my down payments and lease payments are 100% deductible from the bottom line. But if I was buying/leasing as an individual, I certainly would do some serious homework on both the lease and buying ends of a transaction.
You must look at residuals posted by commercial lending institutions if you want to be closer to resale value. They are much less likely to "inflate" the residual in order to sell the financing. Manufacturers also have a more direct route to resell a vehicle that's turned in on a lease and higher profit potential which is beyond a typical wholesale figure. Many commercial lenders have gotten away from leasing cars/pickups because of this somewhat unfair advantage the manufacturers have.
I believe you are quoting the manufacturers residual buy-out for commercial lease program. If so, you must understand that manufacturers are motivated to inflate the residual to entice sales. If they buy it back they've already made money on the original sale. Their turn-around program will take less of a margin, but they'll still make money.
In leases enough leasees buy out that it makes the inflated resiual price worth it, bottom line.
But....there still is the basic question of how much did you pay for a similarly equiped Dodge, GM, or Ford? Those prices are never the same -- at least in my experience -- and the delta ends up most often being a complete wash since you can more often buy the Dodge for less.
Regards,
Dusty
Nope, those are not commercial terms..these are basic individual lease rates. The commercial rates while lower, are basically the same percentage points apart across the board.
Its not a point of what I paid, or will pay for the Dodge..its just my point that the RAM doesn't hold its value like a Ford or Chevy (or Toyota). Which brings me back to my other point of that its of no huge consequence to me, since I don't buyout my leases, I turn them back in, write off the down payment, and go from there.
I'm just simply looking from the point of the Average Joe, and have been there from the individual leasing standpoint.
And since the Toyota leasing debacle a few years back- I know of no manufacturer "over-inflating" their residuals. Toyota took a huge, huge loss, almost to the point of bankruptcy, on tens of thousands of leases that had inflated residuals.
Consumers and commercial customers found out the vehicles were not worth what Toyota had guaranteed them to be worth and turned them in en-masse prompting Toyota to overhaul their entire leasing program. Their residuals now are more in line with the Big 3, and other import manufacturers.
Do you guys have any comments on how the new RAM will fair with situations like mine? I really like the truck..although the front end sucks, the interior is much improved, and the ride seems to be more "solid" then my 2001 Silverado I'm leasing now. Not as many creature comforts (I love the Onstar and Satellite radio features in the Chevys)..but the Dodge gets points for its engine and sport package option, and I love the 20" wheels, too. It seems like it should fit the bill.
I don't think we know anything about your situation beyond the following:
1. You're leasing a couple Dodges
2. Chevy & Ford dealers in your area are apparently not discounting their trucks
3. You believe Dodges have low resale value
4. You like creature comforts, 20" rims, and the dodge interiors
We've addressed your concerns about resale value. I'm not sure why the Chevy and Ford dealers in my area have $6,000-$9,000 discounts but yours are selling at a premium. What other situation would you like us to address?
Best regards,
Dusty
Anyway, back to pricing. The GMC dealer told me they would sell for $300 over invoice plus I get any and all rebates/incentives. That would have made the GMC about $3,000 less than the Dodge but without leather and some other options. The deal the Ford dealer worked up was $40,700 plus a $1,000 rebate. The Dodge was $40,100 plus a $1500 rebate, plus I had an "owner reward" rebate of $500 plus a $500 farm bureau rebate. The Dodge worked out to be $2200 cheaper. Considering the Ford Crew-cab is larger and I had $1,000 in extra rebate money, it doesn't seem like a significant price difference to me. If I had walked in off the street, the Ford would have been $1200 more for a slightly larger truck.
Seems like the heavy trucks are fairly similar in price. Are the Dodge 1/2 tons that much cheaper than the other brands? I can't imagine as our local Ford dealer is constantly running full-page ads and the F-150's seem to be dirt-cheap to me. The one this morning says a reg. cab 2wd XLT, loaded, V8, auto for $19,010.
I think my point may have gotten lost in the mud, but Hersbird touched on it.
Based on industry analysis I've seen in the past, the average Dodge buyer purchased her/his vehicle at a greater discounted price from the MSRP than did Ford or GM buyers. So, when figuring the amount of money lost in depreciation ("resale value") on similarly equiped trucks, the reference point is not the factory invoice price, but the actual amount paid for the vehicle.
And of course the MSRP makes a difference, too. I compared a RAM to a F150, and regardless of trim line and optional equipment, the F150 always came out more expensive. I don't remember the exact amounts, but I believe that they all were more than the 48-52% delta ($1200) that spraywizard made reference to.
In addition, the longer one keeps a vehicle, the less "resale value" becomes. At ten years old -- the age of the last three vehicles I've owned at trade-in time -- the difference between a $1000 Dodge and a $1250 GM is not big money, IMO.
Another thing is actual trade-in value at time of transfer. There is statistical data on this particular feature, and again, the last time I saw that the average price given to a seller of a GM truck was lower than the national book values. A lot has to do with condition, and GM trucks are the first to suffer from corrosion around here. Despite the belief in the "GM factor," if the doors, rear cab sills, front and rear wheel lips, and body mounts are rusted through (typical for GM trucks in this area), it's not going to be worth as much as a Dodge or a Ford in otherwise solid condition.
Bests,
Dusty
Every car is hurting on resale right now, I don't care who makes it, the market is just flooded with great 3 year old cars for almost 1/2 what they were new.
Unfortunately, what a new vehicle actually sells for does not figure statistically into resale values. They do use a nationwide percentage off MSRP across the board as a reference, but as you point out, its usually not even close to what you actually get the vehicle for.
Dodge has a nationwide factory incentive program that just started with an 8500.00 direct discount on Ram pickups. Up from 7000.00 a few weeks ago.
Ford and Chevy are discounting in my area, too- I mean, the auto industry in general is taking a bath. I know Dale Jarrett Ford in Charlotte, NC is offering 5000 dollars off MSRP AND 0% financing for 60 months on F150/250's. Thats a killer deal.
Chevrolet is probably in the area of 4-5000 dollars off, too in my area, although I didn't sit down with them and hammer out the numbers as I knew I was going in a different direction this time.
Either way, its a buyers market.
I'm also sorry you feel your "points" were lost in the mud. I don't consider someones opinion on something "mud". I stand behind my points, and can post revelant info from auction houses and dealers that back my point. I simply was trying to have some conversation. I certainly am not knocking the Dodge product- to be blunt I can buy anything I want, Ford Chevy, whatever. I chose Dodge, so I have to feel like I making a wise choice on the product.
However you want to cut it, the truth is the truth, and Dodge does not have the resale value of Ford or Chevy. No one has to take my word for it, all you have to do is get your hands on some auction or dealer books- or better yet go trade one in.
However it shakes out, I'm pretty excited about the 1500 in general. I'm anxious to see how it compares to my Silverado and the Ford Lightning I had a couple years back.
You really have more of the stock ratio in theory.
The same thing happened to me on the Lightning I had..it came with a 3.80 ratio (up from the 3.55 the F150's came with) so I thought I really was moving up in the world. Then a buddy of mine who races drag cars told me that the gear ratio was nice, but since the Lightning came with 17" rims, the gear ratio was more like a 3.55 on 15" rims. I never knew that!
What are you talking about? Where are you getting the info for these discounts? I've never seen a $7,000 factory incentive on a Dodge or any other non-luxury brand, let alone $8500.
Current factory incentives on most trucks:
Ford $2500 or special financing
Chevy $3,000 or 0% financing
Dodge $2500 or 0% financing
Any discounts beyond that are between the consumer and dealer. There's no reason any of these trucks can't be bought in the ball-park of invoice. My '02 Tahoe and '03 Ram were all bought within $300 of invoice. The Tahoe was about $8,000 off sticker and the Ram was $7,000 off sticker. Those numbers are close to what you posted above, but they're NOT "national incentives".
My family owned a large multi-brand dealership before selling a few years back. I now have a heavy-equipment leasing company but certainly know how this industry works and have access to vast resources of residuals/resale values. There's definetely some confusion going on here.
I would never assume a dealer advertising a vehicle as "loaded" would mean every possible option. An F-150 XLT is more than "loaded" for advertising purposes. I'm sure this was a basic XLT with V8 and automatic, probably the smaller V8. You typically don't advertise "fully optioned" vehicles on these generic ads.
Typically "well equipped" means air, stereo, 4 tires, LOL!
"loaded" means PW, PL, PM, etc.
Could you point me to a link please, or at least elaborate a little?
Thanks for your input.
Dodge already has on their website 4500 consumer cash on RAM 1500 trucks and various cars. Add in factory to dealer cash of 3000, plus another 1000 for dealer overstock. Only dealers are aware of the 4000 back money. I found out because the guy who sold me the trucks happened to coach my sister in little league baseball. I then confirmed it with the owner of the Dodge dealership. According to him, every 5 star Dodge dealer is running ad campaigns for 7500-8500 dollars directly off sticker.
I confirmed this with 3 Dodge dealers today, although all are located in the Southeast.
I'm pissed that I already signed the deal on my 2 trucks, but on the flip side, I may order a 2500.
Add sport package- 20" rims. Tires are then 285/60/20. Tire diameter of 33.46.
If you keep the 3:55's in the rear and use the 20" rims and tires, your effective (actual) gear ratio is 3:24.
Hence the reason you get the 3:92 ratio with the Sport package. You end up with a 3.57 actual ratio. Thats how the gas mileage stays the same across the board.
For more info go here- http://gs.tolan-hoechst.com/tirecalc.htm
The mileage is a completely different story. Contrary to popular belief the mileage often improves with lower gears (higher numerically) because the motor doesn't have to work as hard. maybe if all your driving is steady state, level highway cruising then you might see a small drop in mileage, but around town, towing, or in hilly country often the deeper gears get better mileage.
"I don't see this with Chevy or Ford. I don't care about resale since I lease, but the common thread out there with people in the auto industry is do NOT buy a Dodge product..only lease it. Maybe that will change over time..who knows?"
I'd like to clarify a few things for the person you're giving advice to:
1. Chevy and Ford are offering rebates of around $3000 and selling at invoice price too. Where did you get the impression they're not discounting as much? I bought a '02 Silverado for $2002 under invoice last year for my wife to drive w/o any haggling. And the market is worse now than then.
2. Hate to tell you this, but the cost of leasing a vehicle is VERY dependent on its resale value, since the residual is based on this number, and the lower the residual vs. the cap cost of the vehicle, the higher the payments. Low resale value = high lease payments. There is NO way around this. It is a fact of leasing. Dealers love leasing because typical car shoppers don't understand leasing. Trying to avoid steep depreciation on a vehicle by leasing just doesn't work. It's factored into the lease price. Buy a fast-depreciating truck and you'll pay more to drive it in the end, lease or buy.
3. I leased a '97 Ram 4x4 SLT with upgraded stereo, and lots of options for 3 years with 15,000 miles a year. The residual factor was .63 then, very high, so my payment was only $359, including tax, with ZERO down. Try beating that! You can't get that kind of deal now because they got burned setting such high residuals in the past, but at the time it was considered realistic. But Dodges haven't always been dogs in terms of resale value. I agree my '00 Tundra is better, probably due to their reputation for long term reliability, but it's not as big a difference in the big picture as you'd think. All full size trucks are relatively strong in resale value compared to cars and even compact trucks.
4. Other reasons he may have a hard time getting what he wants on resale for his nearly new truck:
a- Lots of options. Other than a few select packages (4wd, or SLT, for example) most options do not bring much extra in relation to their original cost. A basically equipped Ram will hold a higher percentage of its value than a loaded Laramie. Some 1500 rams sticker at $37,000, other essentially similar ones at $28,000. People buying used often just want "a nice truck". Some will value options more than others, but the more options, the more depreciation.
b-He may have paid "too much" or bought when few discounts were available, such as at launch time. Quite different than typical buyers buying at normal times. And normal for the current economy is invoice price minus rebates, at least here.
c-The spread on a private sale vs. a dealer trade will be at least $3,000. Dealers have to make a profit and cover themselves with a sufficient margin to cover surprises on trade ins they take. On higher priced trucks, not being able to offering financing can affect the price he can get, but not to that degree. It's almost always better to sell it yourself. Most people can't float the cash to do this, so they are trapped into trading at the dealer and taking the hit. Dealers make more profit on their used car sales than new car sales. They love taking recent year model trades in at fire-sale prices.
d- Yes, current rebates do affect resale value. But they're all doing it. And from trade magazines I subscribe to, they say GM is leading this trend, and that Daimler Chrysler and Ford do not like it, but feel they have to match them to compete. So DC can't be blamed for the low new truck prices. As an aside....check sticker prices and notice that prices over the last few years are rising far faster than usual, probably to offset the rebates. They're giving with one hand, and taking with the other. The true savings are probably far less than the rebates would suggest. But it's a good marketing trick to give customers the impression they're stealing the vehicles.
"And since the Toyota leasing debacle a few years back- I know of no manufacturer "over-inflating" their residuals. Toyota took a huge, huge loss, almost to the point of bankruptcy, on tens of thousands of leases that had inflated residuals"
According to the Clark Howard consumer radio show, lots of car manufacturers and banks overdid it on residuals and got stuck with vehicles they couldn't sell for what they hoped. My brother's Ford Expedition he leased also had a lower real value than the residual as it neared the end of the term. First Union actually called him up and they negotiated a purchase price that was far lower than the residual.
As for Toyota being near bankruptcy, I just read that Toyota has more CASH reserves than any other auto manufacturer, so I would be surprised to hear they were near bankruptcy in recent years. Where did you get this information? My source is Automotivenews.
There is no single set "residual". Any lessor can set whatever residual they want. Yes, they use info from ALG and other sources, but you'll often get an inflated "subvented" lease residual from the manufacturer's own financing arm. They take the hit as a cost of making the sale.
Being able to "write off" a lease payment doesn't mean you're not paying it. You're just not paying taxes on as much profit in your business. A 15, 28, or even 46 percent deduction is not the same as the 100% you save by getting the best deal possible on a lease or purchase.
Since residuals are usually expressed as a percentage of MSRP, merely finding a number such as .64 or .45 is meaningless. Some vehicles have higher initial markups than others, so even with a lower number, their resale value might be better, or vice versa. Also, as someone else said, if I can lease a Dodge at $3000 below invoice, and get a residual of .45 x MSRP, I might be better off than a Chevy leased at $2000 below invoice with a residual factor of .50 x MSRP. The only thing that matters is:
YOUR CAP COST - RESIDUAL VALUE IN $$$ = TOTAL DEPRECIATION
Here, I'd guess that a Chevy would indeed hold its value a little better, but you have to run the numbers to be sure. But with a 70K powertrain warranty on Dodges, that might not still be the case.
I've been monitoring the area used truck market (western New York state) and used full-size GM trucks outnumber Dodge's by 12-1, Fords by 10-1. Supply and demand is in effect here. One dealer had 9 used full size trucks on his lot and 6 were GMs. He said he just wasn't interested in taking any more, that they hung around too long. Prices on used car-lot Dodge RAMs are just as high as GM and slightly more than Fords, in general, by my observation.
Dusty
I dont really understand why because the wheels cost exactly the same as an option. Does anyone have any ideas how I could get the aluminum wheels instead of the "plastic" wheels on this truck, i would like to maybe purchase it tommarow.
Thanks in advance.
Are you sure???
Anyway, if that's what you want to do, take out the "maybe tomorrow" from the equation. Go in there tomorrow with a certified check for the deposit. Works a lot better than "If you do this, maybe I'll buy it!".
The price seems good, and I also prefer the polished 20's to the chrome clad 20's but I think there is a problem swapping them on the trucks because it's listed on the window sticker and it would be a problem selling the second truck with the options mislabeled on the window sticker. the cost of the options were the same when I bought my truck as well, so maybe they could order you in a set of polished 20's from the accessories catalog and swap them with you new chrome ones. Still there may not be enough profit in there to go through all the hassle, back when they sold cars at MSRP or more they would do just about anything you wanted, but now that the profit margins are slimmer they don't put as much effort into it. I'm sure you could order the truck exactly as you want it with the same discount off MSRP if not more, but then you have to wait, and actually they are probably past the cutoff for ordering 2003's. I'd say just get the truck with the chrome clad wheels and if there is a problem with them take them back under the warranty. If it proves to be something that happens a lot over the long 7 year warranty they will probably swap out to the aluminum ones anyway. the chrome clads are easier to clean, and do look better, I just wondered as you do if they will hold up, so I got the polished as long as I was ordering anyway.
yeah, the actual liter measurement of the hemi is something like 5.65l...funny to see 348 cubes on epa window stickers!!
Also, has anyone heard if Dodge will be extending the incentives into June?
Thanks!
Apparently the dealers in Omaha want to sell trucks a little more than the ones in Kansas City. I'm getting stories about dealers in California that want the trucks for $1000 over sticker, so they can't sell them for less than that.
Maybe a trip to Omaha would be worth the time.
It had the 5.9L engine - is that the one that is noted for pinging?
Thanks for the advice as this is my first pickup.
Another common weakness is the track bars on 4x4s. This is not a big dollar item, but annoying still the same.
2001s were pretty good trucks from what I could tell.
Best regards,
Dusty
Are the 2000 Rams holding up as good as the '01's? What is an LA engine?
Thanks again.
Chrysler "small block" motors have a mixed lineage. Prior to 1967, the small block 90 degree series were known as "A" engines. These utilized a polyspherical combustion chamber (in today's parlance, a "semi-hemi") and are most distinguishable by a very wide top-engine platform and scalloped valve covers. This included a 241 (Hy-Fire), 270, 277 (Red RAM), a 303 (later replaced by a 301 cid), and a 318 cubic inch motor that was available up through 1966.
It's the 318 that is the most cause of confusion. In 1964, Chrysler introduced a completely new "small block" series utilizing wedge combustion chambers with the 273 cid. This was refered to as the "LA" engine and was used initially in Valiants and Darts exclusively, later added to the mid-size Dodge and Plymouth lines in 1968. In 1967, Chrysler pumped the 273 out to 318 cubes and replaced the older poly-head 318 with this motor. Another "LA" engine, the 340 cid, was released in 1968. In 1973, the "LA" 360 cid was introduced.
Chrysler's assembly quality has been generally good in the '90s, especially true of their truck line. Most problems in this era have been related to spotty component quality, a condition that Ford & GM have suffered with as well. This is what happens when you force suppliers to low profit margins. Of the Dodge technicians I've spoken to, the opinion is that from 1998 onward, quality in the Dodge truck line has steadily improved.
Best regards,
Dusty
sebring95 - I see you have gone from the Cherokee forum to the Ram discussions! Glad to hear from you again. I am following in your footsteps and have the "For Sale" sign on the Cherokee. I have hopes of a Dodge Ram in my future.
My uncle has a '97 Ram similar to what you're shopping for. He has over 280k miles on it now and the engine still runs flawlessly. Tranny was rebuilt around 200k miles and most mechanical items have been replaced (bearings, starter, fuel-pump, etc). My 3/4 ton had about 110k miles and the only repairs was front bearings at 80k miles but Dodge picked up the tab.
I would look for a mid model year 2001 3/4 ton myself as they made some improvements. My '01 had the mid-model year improvements which was the nicer towing mirrors, upgraded brakes, and some other things. I replaced the factory pads at 80k miles with the bearings and they still had plenty of life. Factory rotors were still on it as well. I don't think the 1/2 tons got those upgrades.