Saab Stops Covering Warranties

Saab95

As it falls into liquidation, Saab confirmed today that will no longer honor warranties on any models. This includes not only cars still on dealer lots, but all 2010 and 2011 models already sold. If you bought a Saab while the automaker was still part of the GM stable, warranty work will be covered, GM told Kicking Tires this afternoon. The sale was completed in February 2010.

The bankrupt Swedish automaker told dealers yesterday it would stop covering its policies, according to Automotive News. Warranty booklets were to be removed from cars on lots, and all cars should be sold "as is," according to Automotive News.

All warranties have been suspended, regardless of model year, Saab spokeswoman Michele Tinson said, but "Saab owners should be advised to keep receipts of all related warranty work done or services performed until further notice." A service representative at True Saab, a dealership in suburban Chicago, confirmed the news, saying the dealership was charging customers for all Saab repairs and maintenance. The dealership had no immediate provision to offer its own replacement warranty, a sales representative told us.

Saab dealers are expected to slash thousands of dollars on most Saabs to move these warranty-free cars. Of Cars.com's national new-car listings, 9-3 sedans have a median listed price of around $34,000, while 9-3 convertibles list for a median $44,000. Those don't reflect steep discounts yet: With destination charges applied, the 9-3 sedan's sticker ranges from around $30,000 to $42,000, while the convertible spans about $40,000 to $47,000. The flagship 9-5, meanwhile, appears to be dropping faster, with median prices on Cars.com around $45,000 — for a sedan that roughly spans $39,000 to $60,000.

Prices could drop even more. True Saab already lists discounts of $7,000 or more, with some cars getting more than $11,000 off the MSRP. The cash saved might allow you to buy a third-party warranty — or save enough cash to pay for any future repairs — but given a possible drying-up of Saab parts, such warranties should come with a strong caveat emptor. The current 9-3 has average reliability, according to Consumer Reports, while the short-lived 9-4X crossover and 9-5 sedan have little reliability history.

Comments 

Amuro Ray

These are virtually "used" vehicle now, i.e. should be considered a used vehicle by any interested party, due to the "as-is" status.

Resale value will plummet, and realistically, these vehicles are now...surplus? Collateral? Or some better terms to describe them?

They are basically vehicles that the dealers will have to sell on their own, with no cash incentives from the manufacturer to the dealers at all. Bank will start charging interest on the dealer's inventories too, so the #1 thing in the minds of the dealers is to GET RID of them.

I would say, Saab - whatever model - will worth the same price as scrap metal as junkyard at this point. OK, that's too extreme, but wait a day or 2 and call insurance company, and see how much they will pay if the vehicle is totaled in the 1st year - that's how much it will worth (probably slightly more than scrap metal).

Mike

I don't know how they expect someone to pay all that money for a car with no backing. Designs are outdated, powertrain is questionable, and they sell for a BMW or Benz price!?!!? What bank will even finance a Saab without a HEFTY downpayment, bank fee and stellar credit?

Craig

Any smart dealer will offer a quality non-factory extended warranty to cover at least what factory is rather than take a large hit on price.

Tony

POS car + no warranty = very low sell price

For the dealer it would be best if they could give them to their employees as company car and write them off as an expense.

Amuro Ray

@ Craig,

The problem with aftermarket extended service contracts (that's the correct, legal, and technical term. It is NOT a warranty; only the manufacturer can provide one) is that repair under the contract terms can't be fulfilled by a 3rd party, thus nulling the service. That is, if something is broken, and "covered" by the contract, they will pay a partial cost to repair the fault, parts & labor, when shops have rendered their services and repaired your vehicle. Problem is, without parts, then the service contracts will not be bounded, because the contracting companies are not liable to produce or supply the necessary parts for repair. As long as the shop, or you, can find the parts to repair the fault, they will pay, so they aren't pulling out from their obligations, which mean, you can't get your money back from the service contract by showing that it's not honoring the binding terms.

In short, you bought nothing but a piece of paper that says "service contract" on it. None of those terms will help you if parts aren't available.

JM

not going to lie, it would be nice to pick up a 9-5 for the price of a Focus or a 9-4X at the price of a 4-cylinder Rav4

Tony

JM,

you're gonna get it and then computer fails. Then what?

Highdesertcat

It would not be the smartest thing to do to buy any Saab. Much of it is electronics and there won't be any more spare parts made either.

Electronics will become scarcer by the day after this announcement.

FlanKitty

reminds me of when the daewoo brand was axed in the united states market and how dealers were basically giving cars away to get rid of inventory.

granted the average saab isn't a rolling scrap heap like daewoo was, unless they (saab) gets bought/bailed out by Chinese investment, things could get ugly all around, especially for the workers (in sweden) who are still missing back pay.

Mark

ouch! GM was definitely the beginning of the end for Saab.

Amuro Ray

@ FlanKitty,

"(saab) gets bought/bailed out by Chinese investment"

Not gonna happens. Proposed multiple times, all turned down by GM. All the interested Chinese companies are GM competitors in China.

Blame it on (whoever party) the fact that all Saab late models are essentially GM vehicles at its belly...

Jay

I can't see there being a huge problem with obtaining parts. Most of the "mechanical and electrical" parts are GM based and shared with other models (new 9-5 and Buick Lacrosse). There may be an issue for new "cosmetic" parts but most of their vehicles had been on the market for almost 10 yrs. The auto recyclers will probably have those.

Amuro Ray

@ Jay,

"I can't see there being a huge problem with obtaining parts."

There is 1. HUGE 1. LEGAL reason.

Yes, Saab uses a lot of GM parts, but here is the problem - a good parts store or mechanic can tell what is switchable, but for legal reason, whoever repair the vehicle needs to make sure that the part(s) is/are for THAT model, and for that year.

It's extremely unlikely that an earlier model year parts will have on its parts that says "good also for future model years, even if the brand is owned by another company."

Result? Installing a part that is not intended for the specific model, owned by another company, for another MY. If anything happens that results in a crash or even injury/death, who's fault will that be? The repair shop (unless owner has signed a disclaimer).

Jay

@Amuro Ray,
I made no mention of future models (going out of business, remember?) First off, some third party parts supplier is probably going to by the rights to manufacture most parts that consumers replace if GM decides not support it. Second, if GM decides to support replacement parts, I'm sure any Saab made in the last 10 yrs. will have a system/catalog to designate which "mechanical and electrical" parts that will work with Saabs and will let you know how to obtain them (similar to what they do for defunct Pontiac, Saturn, Oldsmobile). May be a little "red-tape" up front for a mechanic but long term it will smooth out.

Derrick G

@Mark:

Yes, but don't blame GM. The first autopsy is in and it blames Saab for never fully integrating into GM. Let's face it: it would have never been sold to GM if it weren't in trouble. Yet it did little to increase volume. Yet it kept falling behind in being able to charge the premium needed for such small volumes. For years it's been Sweden's AMC, using other companies' technology to get by. Had it allowed more integration into Opel/Vauxhall, it MIGHT still be around. It resisted and the company paid. GM maybe should have not spared the rod with its new child, but the root causes didn't start with GM.

http://www.jbs.cam.ac.uk/news/items/2011/downloads/111220_saab_report.pdf

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