GM Bankruptcy: What it Means to You

GmsaleAfter filing for bankruptcy this morning, GM's future is a bit hazy. However, the company is stressing that the day-to-day operations that impact consumers will remain unchanged. The company has set up a website to alleviate these fears here.

We highlight a number of consumer concerns below.

Warranties
President Barack Obama again put the government on the firing line today in regard to backing new-car warranties. Any new GM vehicle purchased during the bankruptcy period will continue to be fully backed by the U.S. government. That means that even if the company fails, if you buy a new GM car or truck during this period, its full warranty will be supported by the government. If the company fails, the government will find a third party to cover warranty work.

Service 
All service centers will operate normally during bankruptcy.

Resale value
There will likely be a hit to the resale value of GM products in the short term. Regarding dead brands like Pontiac and Saturn, resale values are likely to take an even larger hit. However, if the new GM is indeed smaller — with a tighter control of supply, as would be expected — the resale value of its cars should not be severely diminished. Especially if the bankruptcy period is as short as three months.

Will my dealer close?

The number of shuttering GM dealers over the next year or two has grown to more than 2,100. The company has not officially announced which dealers will close, but we already reported where you can find some announcements. Now that it’s in bankruptcy, the company may be forced to publish all 2,100. It can also speed up their closings, like Chrysler did. GM says more information on dealer closings will be announced later this week.

The end result is that even if your dealer closes, you will still be able to get warranty and repair work done at a remaining store.

How good will deals be?
When Chrysler went into bankruptcy, the manufacturer’s cash-back incentive figures actually decreased. Because many dealers were closing, however, they beefed up deals on their end. GM has significant cash-back deals that were scheduled to expire today, but details of future incentives have not been announced. We'd expect them to roll out later this week and to be on par with current deals. Don't expect major fire sales, except at shuttering dealers or on brands that are for sale, like Hummer, Saturn, Saab and Pontiac.

Of course, if GM closes other dealerships sooner, they could see sales similar to Chrysler's closing shops.

If you have questions about the GM bankruptcy, feel free to ask them below.

Comments 

Ron Murphy

GM has lost me as a customer. I have purchased GM cars my whole life and nothing but GM cars. My last three cars? Oldsmobile Saturn Pontiac. Im through, three strikes your out!!

YOING

I have total confidence that GM will never pay back it's 172 billion dollars in debt. I also have total confidence that I will never buy one of their products again. And I have total confidence that GM will never again live at the top of the sales charts.

valero

It means I as a citizen of the US am now a shareholder in this company. I will be writing to my Senator and Congressman, demanding that my portion of the shares be sold and the proceeds forwarded on to me.

The last group of people I want voting at the shareholders meeting is the US government. The second last is the UAW.

The red

now that GM is Goverment Motors i diffently will never buy there

ONELEGGED

GM IS DONE!! THEY ARE COMING OUT WITH AN ELECTRIC CAR, THE VOLT , WHICH COST 45,000.
WHEN AMERICA NEEDS A CAR THAT GETS 100 MPG
AND COST 10,000 - 15,000 NEW. AND WE NEED A CAR THAT LASTS 300,000 ENGINE AND TRANSMISSION
HONDA AND TOYOTA ARE ALREADY HALF WAY THERE.
HONDAS NEW INSIGHT 22,500.00 BRAND NEW!!!!!
I WILL NEVER BUY AN AMERICAN CAR UNLESS ITS AN OLD MUSCLE CAR!!!!! THE OLD US CARS WERE ALL
BETTER THAN ANY OF THE NRW CARS. THEY LASTED!!!

ONELEGGED

UNLESS GM CAN CREATE A CAR THAT RUNS ON GARBAGE AND HAS A FLUX CAPACITOR , I THINK THERE DONE!!!!! EACH MAN WOMAN AND CHILD NOW OWES 220,000 DOLLARS !!!!!! I WANT MY MONEY BACK!!!! HOW DARE YOU FORCE US TO BAIL OUT A
BUSINESS THAT HAS BEEN GROSSLY MISMANAGED FOR
YEARS , WHILE THE LAZY AND STUPID MANAGERS
ALL GOT RICH WITH BONUSES. THEY SHOULD HAVE SHUT IT DOWN AND PUT THEM ALL IN JAIL!!!!!!

Original sheth

YOING:

GM just outsold Toyota in May. The same way it has since Toyota has been in the US market. Toyota may actually have to do better than a 40% decline in montly sales to pass GM. Or Ford for that matter.

Ziggy

Both Honda and Toyota outsold Government Motors in passenger car sales.

ziggy

Sorry - just Toyota (I was looking at Honda's May 08 #'s). Toyota sold more passenger cars in the U S in May than any automaker.

TK

Ron Murhpy-

You won't buy GM anymore because you had a lot of problems with your last three cars or because GM won't make those brands anymore?

Just curious.

Ron

I have 2 Saturns which are great cars, A Chevy Truck which has been good, and a Pontiac Aztek which is a piece of junk. For years I resented people that bought foreign cars, I thought they were ruining this country. I was wrong. It was the arrogant management that sold us cars that made them a profit, not cars that we needed. Instead of changing to giving us cars we need, now it will be managed by the government and the UAW, two other dysfunctional managers. Should of let it go bankrupt in the fall and let Ford and the Japanese companies fill the resulting market loss. I am sick at how a great company (in the '60s) has gone Kaput.

vjordan

i have less than perfect credit and a job where could i get a great deal on a new gm car

Director of Discipline

I work in a Chevy garage. The number of screwups we see is devastating! Problems the mechanics can't fix after five or six "repairs," often at the customer's expense. Their trucks are notorious for seal leaks at 70,000 miles, and there is always another Trailblazer in the corner having its transfer case, transmission or axle repaired.

It's very sad. One of our employees who sees the daily invoices, and who also works at a Toyota dealership, tells us that these things never occur at Toyota.

So, sayanara GM. I'll miss my job, but not your awful attitudes.

Ron, there are some great GM products out there, you chose 3 of their worst product lines to purchase. Do you do any research before you purchase? This sounds like an error on your part as well. Contrary to what this article says the Saturn brand is not dead. Under new, ambitious, ownership they are now one of the most viable brands of the former GM.

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