Discount Pontiacs: Dogs or deals?
Pontiac is going away, and General Motors is holding a fire sale to clear out its lots and showrooms.
You might worry that service problems or low resale values will outweigh the bargain prices a few years down the road.
But don't. These are real deals. The savings you enjoy today won't be lost to unforeseen costs or problems down the road.
Edmunds.com, one of the best sources of information on car and truck prices, says new Pontiacs are selling for 14% to 24% off their sticker price.
The smaller discounts are on harder-to-find models: the G8 GXP, Solstice GXP and Solstice Coupe. The bigger discounts are on slower-selling models with larger inventories: the G6 sedan, Vibe and G5.
Here are the reassuring answers to four questions that might make you pass up such a deal:
Question 1: What happens to my warranty when Pontiac goes away in 2010?
Since President Obama's tough-love bankruptcy plan seems to have saved General Motors from extinction, the automaker will be around to honor all Pontiac warranties.
The final 2009 and 2010 models will be protected by GM's three-year or 36,000-mile bumper-to-bumper warranty and its five-year or 100,000-mile powertrain warranty.
Question 2: Where will I get warranty work done after my Pontiac dealer closes?
Only 40 dealerships sell only Pontiacs. Most will remain open and continue selling other GM brands. If that's the case, they'll continue servicing the Pontiacs they've sold.
If your dealership closes or is only selling non-GM brands after Pontiac goes away, you can call the customer care line at 800-762-2737. You'll be directed to the nearest Chevrolet, Buick or other GM service department with the appropriate personnel and equipment to service your Pontiac.
All GM service departments are connected to the same database, which has the service and warranty records for all GM vehicles.
Question 3: What if there's a dispute over what's covered by my warranty or the quality of the repairs?
GM will handle service complaints just as it does now. You can start the appeals process by calling the 800 customer care line.
Question 4: What will happen to the car's trade-in or resale value?
Anytime a brand offers big discounts on its new cars and trucks, it drives down the resale value of its used vehicles.
Since Pontiac will be offering lots of incentives as it's phased out, resale values probably will be down 10% to 15% over the next 12 to 18 months.
After the last new Pontiac is sold, resale and trade-in values should stabilize and even rebound a little.
We asked AutoTrader.com to look at what happened to Oldsmobile resale values after GM closed that brand in 2004.
It compared Oldsmobile prices from 2005 to 2009 with those of similar vehicles sold by other GM brands. The Oldsmobile Alero, for example, was measured against the Pontiac Grand Am, which was mechanically and structurally the same.
For the first four years, Alero's average rate of depreciation exceeded Grand Am's by less than 1 percentage point. A new Alero purchased for $12,306 in June 2005 depreciated an average 43.1%. A new Grand Am that cost $13,491 depreciated an average 42.3%.
The bottom line is that anyone intending to keep a new, discounted Pontiac more than three or four years shouldn't suffer from Pontiac's demise at trade-in time.
If you're considering one of Pontiac's bargains, here are our favorites.
We'll include a typical manufacturers suggested retail price (MSRP) and Edmunds.com's True Market Value (TRM), which reflects the actual price customers are paying for cars with that sticker price, including all discounts.
G6 GT: MSRP $24,850/TMV $18,881 Solid value for a roomy, comfortable and handsome midsize sedan. A 221-horsepower V-6 provides plenty of power. The G6's interior isn't up to the quality you'll find in a Toyota or Honda, but its sale price is thousands of dollars less.
G8 GXP: MSRP $40,060/TMV $34,282 The epitome of American muscle, this rear-wheel-drive sedan has Corvette's 402-horsepower, 6.2-liter V-8 stuffed under the hood. It sprints from zero to 60 miles per hour in five seconds. Not a paragon of practicality, but if you crave power, grins are guaranteed.
Solstice Roadster GXP: MSRP $30,155/TMV $25,979 The most fun you can have without a top, this little two-seater has a 260-horsepower turbocharged engine that slingshots it from zero to 60 in fewer than eight seconds. Not much trunk space, but who cares? A nonturbocharged version is available at about $5,000 less.
Solstice Coupe GXP: MSRP $31,045/TMV $26,847 All of the features of the Solstice Roadster GXP but with a hardtop. With fewer than 2,000 units produced, it will be a rare bird indeed.