To Buy or Not to Buy a Car

I walked into a Manhattan Cadillac dealership not really knowing what to expect in the wake of General Motor's chapter 11. The first person I encountered was a woman and her son purchasing the Cadillac they had been leasing. I asked her if she had concerns about any fallout from GM's financial crisis. "No," she said, but with a question mark in her voice. She then went on to explain they needed a car and they liked the one they had, so they decided to buy it.

I did notice the dealership appeared busy. I also encountered a man and his son looking for a new Chevy truck. They didn't voice any over-riding concerns about purchasing a GM product either. Granted GM is not discontinuing or trying to sell off either of the brands the two buyers named. The company has announced it will phase out Pontiac and try to sell Hummer, Saturn and Saab.

This made me wonder just how much any buyer should worry about buying one of the lines to be jettisoned. I put the question to Jon Linkov, the automotive director for Consumer Reports. He advised against buying from any of the 1,100 dealerships slated for closing. Future warranty work could necessitate a long distance trip.

What about parts for cars that are no longer made? GM's answer is that most of the parts for it's vehicles are interchangeable. However, that's now. How long will that last? It could last years. For one thing, car-makers are required by law to make parts available during a vehicle's warranty period. For another, many states extend that requirement by several years. And for a third, GM is one of the largest car-makers in the world and parts suppliers will have stock they will be more than happy to continue to sell.

Perhaps the two most pertinent questions are whether you'll get a better deal buying a GM car as a result of the bankruptcy filing and if that car's resale value will take a hug nose-dive. The answer to the first is don't expect any fire-sales on any of the popular models. The better bargains will come on 2009 left-overs, vehicles not in demand and those brands discontinued. If price is your main objective, you lose nothing by waiting until the dealers are really eager to just unload the car.

At the same time, expect the value of the car to fall, but it's still up in the air by how much. "The deals will be so good, they will more than make up for a drop in book value," according to John Bruno, owner of Potamkin Cadillac in Manhattan, which also sells Buick, Hummer, Saab and Chevy trucks.

So, is it a good time to buy a car from GM or Chrysler for the matter, since they're closing dealerships too? They're offering government guaranteed warranties, rebates, special financing and significant discounts on new cars. It's a good time if you need one. It's better to wait a little if you don't need one right away. Especially if you're flexible about options, it's a buyer's market that may not come around again for a long time.

(for more of my stories go to www.nbcnewyork.com)