With General Motors and Chrysler declaring bankruptcy, consumers have had many concerns and questions about the ownership or purchase of these companies' vehicles. We have assembled a list of key points that summarize the situation that shoppers are likely to encounter in this new marketplace. Also, we have a few significant points for car owners worried about warranty issues or the availability of parts and service in your area. On Edmunds.com we will provide this information for you and keep it updated as events change.
FOR CAR SHOPPERS
Pricing and Bargain Prices: There are deals to be had on almost all makes and models of cars, not just the ones in bankruptcy. Before shopping, consult Edmunds.com True Market Value® prices. However, it's also important to contact multiple dealers for price quotes. The easiest way to do this is to use Dealer Locator, which makes it easy to contact different Internet managers on competing car lots. And finally, keep in mind that prices will be lowest on the dealership lots that are scheduled for closing.
Availability: As dealers sell off their cars, the vehicles in popular colors with strong option packages will disappear first. If you are a shopper with specific tastes and needs, you should buy sooner rather than waiting for the prices to drop further.
Financing and Loans: Getting a loan for a new car can be more difficult than in the past since requirements to qualify for credit have tightened. This makes it more important than ever to obtain approval for a car loan before you go to the dealership, even if you intend to get a loan from the manufacturer. Leasing deals have been less attractive since resale values began to drop so steeply last summer.
FOR CAR OWNERS
Warranties: The bumper-to-bumper and powertrain warranties sold with the cars will continue to be honored by the carmaker without any interruption. If the manufacturer were to be completely liquidated (all dealerships closed permanently), the warranties would be honored under a special program set up by the government.
Parts and Service: Some owners will be affected by closing dealerships because they will find their local service department closed. This means they will need to find the next closest dealership. All their service records are tracked by the vehicle identification number (VIN) so the information will remain available for future service visits. Routine maintenance, such as oil changes and tire rotation, can be performed at independent garages without voiding the warranty (though you should check the terms of your coverage before doing so).
Resale Value or Depreciation: When a carmaker goes into bankruptcy, this will cause the resale value of its vehicles to decline more steeply. However, American cars haven't had strong resale value for many years. Furthermore, if you are going to keep the vehicle for a long time, resale value should be of less concern to you.
Chrysler Specifics: Chrysler brands also include Dodge and Jeep. Some Chrysler dealerships have a very tight deadline to sell their entire inventory before they close. They are selling their cars at historically low prices. However, don't expect to just throw money at them and have the salesman accept it. Your opening offer can be low, but it has to be in the ballpark to begin negotiations. See our Chrysler Dealerships Closing article.
GM Specifics: GM brands include Buick, Cadillac, Chevrolet, GMC and the following brands that have been, or will soon be either sold or discontinued: Hummer, Pontiac, Saab and Saturn. Unlike Chrysler, GM dealers that are closing are "winding down" rather than closing abruptly. This means there are no fire sale deals available, even though the discounts are apt to increase as the deadline of next fall approaches. Again, keep in mind that inventories will become depleted during the summer, leaving only cars with the less desirable colors and options for sale. See our GM Dealerships Closing article