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GM offers deals on discontinued cars

Alisa Roth Dec 29, 2009

GM offers deals on discontinued cars

Alisa Roth Dec 29, 2009


Bill Radke: In other news this morning, The Wall Street Journal reports you might expect some big bargains on GM’s for the next two weeks. Alisa Roth covers the auto industry for Marketplace and she’s live in our New York bureau — good morning.

Alisa Roth: Good morning.

Radke: What is GM doing?

Roth Well as you said, GM needs to clear out its inventory. There are two brands it’s discontinuing, Saturn and Pontiac, and it’s offering dealers of those cars an incentive of $7,000 a car to buy the vehicles themselves. Now the catch is incentives always cost the carmaker, and we don’t know how much this one is going to cost GM. That said, car buyers could get a great deal on these cars if the dealers decide to pass that incentive money on.

Radke: How great a deal?

Roth: Well, 50 percent off on some models. If you take the Pontiac G3, it’s compact car, as an example. It usually goes for $15,000. If the dealer passed on that incentive to you, it would cost $8,000.

Radke: And is that as great a deal as it sounds like?

Roth: I talked to Erich Merkle this morning. He’s an industry analyst based in Michigan. And he says it more or less is:

Erich Merkle: You’re getting a car really at a used car price that is a new car, and you’re able to drive it for a number of years.

Where it’s not such a great bargain is if you want to resell this car. They don’t have much resale value anyway, because GM is getting rid of the brands.

Radke: Yeah, what about the warranty on a dead brand?

Roth: Well, GM says that it will honor the warranties, and it has done that in the past. The other thing is that GM’s cars share a lot of parts, so you shouldn’t have a problem getting parts for these cars.

Radke: Marketplace’s Alisa Roth. Thanks so much.

Roth: You’re welcome.

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