NEW YORK (MarketWatch) -- Buying a new car from a company that is about to go out of business can save you thousands of dollars, thanks to dealers and manufacturers eager to close out their books.
Plymouth and Oldsmobile are two recent examples of car divisions that went out of business, writes Bankrate.com car columnist Terry Jackson. Yet they continued to sell off inventory until the day the last dealer closed its doors -- proof that "orphan" status does not necessarily have a damaging impact on the value of the car, as some people assume.
One of the greatest worries of would-be buyers of expiring models is that when it comes time to trade or sell, the car may be worth less than a comparable car from a manufacturer that's still in business.
While that may be true for some cars, it's not always the case. According to Jackson, a check at Edmunds.com, one of the premier Web destinations for automotive information and comparison, shows that a 2001 Plymouth Neon, the last model made by the defunct Chrysler brand, with 65,000 miles would be worth $3,429 as a trade-in. A comparable Dodge Neon, which is still being manufactured, would be worth just $2,952 at trade-in.
Another concern for consumers interested in buying a car no longer in production is parts availability. This fear is also unfounded, says Jackson, because federal law requires manufacturers to make available a 10-year supply of parts. In addition, some cars headed for extinction use parts that are identical with those of current models.
One car maker that offers a model serviceable by other manufacturer is Isuzu -- the Japanese company that has been selling trucks, SUVs and sedans. It is expected to close up shop by January 2009, but until then dealers will offer the Ascender SUV and the small I Series pickup. Both cars are clones of models manufactured by General Motors -- the Chevrolet TrailBlazer and the Chevrolet Colorado -- so they can be serviced by any GM dealership, and parts are likely to be available well past the federal mandate.
By Marshall Loeb