The New Rules Of Car Buying Rule 5

Written by Terry J. Schultz    Monday, 09 February 2009

BUYERS NEED TO READ THE BUSINESS PAGES TOO The future of Detroit is anything but certain. GM and Chrysler are on the ropes. Ford, in better shape than its rivals, has warned that it might need federal aid if another car maker fails. And because U.S. manufacturers and foreign automakers with U.S. plants all rely on the same parts makers, a Big Three bankruptcy could push suppliers under, further damaging the industry. So would you be crazy to buy a domestic model, even if it's a steal? No, but you'd better know the risks. The first is that you'll run into trouble when your car breaks down. That risk is small. Car makers will likely do everything possible, even in a bankruptcy reorganization, to continue to honor warranties and provide parts, says Kelley Blue Book's Nerad. If they are trying to stay in business, they can't afford to lose consumer confidence. Even in the case of an outright failure, whoever buys the bankrupt firm's assets will likely stand behind the warranties and continue to stock parts, Nerad adds. Do you have a guarantee? No. Today's crisis is unprecedented. In the end, you have to decide whether the deal is good enough to outweigh even a small chance of repair woes later. The bigger risk is to your car's value. No matter what, a few brands may be killed off, and if that happens, experts predict, those orphan vehicles will depreciate faster than usual. So if you tend to hold on to a car for only a few years, stick with a brand with a more certain future or a top seller that is unlikely to disappear, such as a Cadillac CTS.

Last Updated ( Monday, 09 February 2009 )