We knew it was coming, but GM execs made it official in interviews with Automotive News this past weekend at the Detroit Auto Show. In an effort to stay solvent -- and to prove to lawmakers that government bailout money isn't going to waste, General Motors will be selling, shuttering and reducing the model lineups of several of their brands. While that news may be greeted with enthusiasm in the business world, consumers may be wondering what the news means for them.
On the chopping block for GM are its Saturn, Saab and Hummer brands. The Pontiac brand will continue, though likely with a reduced model lineup. For now, Buick, Chevrolet, GMC and Cadillac are all safe. Whether GM is able to sell some or all of these brands, or if it simply shuts them down, here's what consumers need to know:
Cars Are Not Pumpkins
It's easy to hear that a brand is closing and think that once its doors are shut, all of its cars are going to stop working and fall off the face of the earth. But cars aren't pumpkins and GM isn't your fairy godmother. If you own a Saturn, Saab or Hummer, your car will still work after the brand closes its doors.
There May Be Deals to Be Had
The stigma of a dying brand is enough to keep many new car buyers far away from anything that brand has to offer. However, buying a car from a brand that's set to close can be a winning proposition for some buyers. Once it's official that the brand will be ending, buyers can expect deep discounts on all models. These deals can be especially attractive when they come from a company like GM, because most Saturn, Saab and Hummer models share components with models from GM brands that will continue. So if you need a midsize sedan and Saturn is closing its doors, why not get a great deal on a Saturn Aura, which is essentially an upscale Chevy Malibu?
Depreciation is Part of the Deal
Depreciation is the other half of those heavily slashed prices from closing car brands. Once a brand shuts its doors, its cars start losing value -- fast. While this isn't a big concern for buyers who drive their cars into the ground, if you're planning on trading in your new car after a few years, you should stay away from Saturn, Saab and Hummer - but only if the brands get shut down. If the brand you're interested in is sold to another company, depreciation is less of a factor.
A big concern for many consumers is what will happen to their car's warranty if the car's brand closes its doors. A car's warranty is a contractual obligation. If GM sells Saab, for example, the company that buys Saab will take over all outstanding warranties made by GM. If GM shutters Hummer, warranties will still be honored -- you'll just have to take your Hummer to another GM dealership. Again, since many GM vehicles share parts, mechanics at those dealerships are more than qualified to work on cars from closed GM brands.