With automakers finally starting to reel in their rebates, $4,000 off the price of any new Saturn sounds like a sweetheart deal. The hefty discount brings the starting price of the sexy Sky roadster down to the low $20,000s, making it one of the cheapest sporty convertibles on the market. And it drops the price of the seven-seat Outlook crossover to the mid-$20,000s, a great price for a well-equipped family hauler.
The come-ons, however, omit one discouraging fact: Saturn is going out of business. Parent company General Motors has pledged to service all Saturn vehicles indefinitely through other dealerships, but smart car buyers know that the true value of a car also depends on what it will be worth in a few years when you decide to sell it. And the resale picture has never been hazier.
In addition to Saturn, GM is closing its Pontiac division and streamlining the lineups for Chevrolet and Buick. The company's Saab division may be shut down completely, and a little-known Chinese company has purchased Hummer. Crosstown rival Chrysler is likely to kill many of its underperforming models as well. And with a devastating plunge in auto sales over the past two years, Ford, Toyota, Nissan, Hyundai, Volkswagen and other automakers are also pruning their lineups.
All of that fallout, combined with the usual retirement of aging models, will soon produce a clearance-sale frenzy.
Automakers plan to retire nearly 50 models over the next two years, including some of the most popular cars on the market. Some of these cars will be great buys, fully backed by the manufacturers and still popular years from now. Others will end up as soon-forgotten orphans, barely worth the value of their sheet metal.
But don't expect the dealer to help you distinguish the classics from the clunkers; they don't want you to know when a model has been discontinued. To keep buyers from demanding fire-sale discounts, in fact, many automakers don't even announce when they plan to stop producing a model. It just disappears from showrooms.
Smart buyers weigh price and residual values together. A deep discount might seem like a great deal today, but it will lower the value of the car in the future. Most Saturns, for example, have lower-than-average residual values, and none makes our top 10 list of discontinued cars. A really low price might still make a Saturn an irresistible deal, but a modest discount on a car with a higher residual might turn out to be a better buy.
How to be a smart buyer? Which brand of cars you prefer to buy? and why? How do you evaluate the automobile industry nowadays?
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I'm so curious to see what is going to become of the auto industry...will the United States automanufacturors ever be able to reestablish themselves? Will the bulk of citizns buy their cars from overseas? And what about the whole ecofriendly car industry? I hardly know anything about cars, however,I know enough to realize that there are going to be some drastic and interesting changes to the auto industry in the US.
ReplyDeleteAbout a century ago, the Ford Model T "put America on wheels" with the first affordable car. It's really depressing to see the car industry fall apart like this. The American car industry is regressing because car companies are taking away new models, not producing more, and are turning their companies over to foreign ones (China). Will this be better for consumers, even ones looking into buying a Hummer? T
ReplyDeleteI really wish I knew how to be smart buyer when it comes to big purchases like this. Admittedly, I have yet to buy a house or a car or much of anything significant, but I can see myself getting completely swindled while buying them in the future. It's a shame that the negotiation and persuasion class for next quarter is filled already. I think it could really help people, like me, who don't know how to do the research into big purchases.
ReplyDeleteBasically car companies, regardless of where they are from, will have innovation and stability when they are pressed to do so. Essentially, Toyota has grown rapidly because American car companies had depended on their success formulas of the 90s . However now, the line up of Ford and GM have been winning numerous quality awards as well as best buys from magazines and companies like Consumers Digest, JD Power and Associates, Popular Mechanics, Motor Trend, and so on. Toyota and Honda on the other hand are dealing with major recalls. Saab has been bought by Stryker, a Dutch supercar company. Basically by streamlining the assembly lines and business plans, Ford and GM are back on the rise and are eating into Toyota and Honda's market share. Therefore Toyota and Honda have been made the same mistake of GM and Ford and Chrysler, in that, they have been relying on their old business formula. Chrysler is relying on their new 2011 line up coming out in the fall, including Fiat cars as well. Chrysler however, is trying to ride out the storm until then, but their proposed cars are getting good reviews as well.
ReplyDeletehttp://money.cnn.com/2010/01/11/autos/ford_car_truck_of_year/
I agree with Ali’s sentiments. What will happen to the auto industry and what will happen to Michigan, in general? If citizens of the US, keep purchasing foreign vehicles, then the effects will continue to be detrimental to the health of the US. There was a time when MI was known for being fabulous with it’s production of cars... decades later, what has become of MI? Companies closing and jobs vanishing, right and left. It truly is scary. This really connects with a post, above this, which I had commented on. There was a quote from the article that said something similar to “there is no such thing as a bad job now.”
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