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Is Now The Time to Buy A New Chrysler or GM Car, truck or SUV?
Lets look at the Pros & Cons

This might be one of the best opportunities to buy a new Chrysler or General Motors car. With Chrysler closing close to 800 dealers and General Motors closing 1100 US dealers and 240 Canadian dealers.  Chrysler and GM are both operating under bankruptcy protection. The Chrysler dealers that are being closed can not sell their inventory of new cars and parts back to Chrysler because they are in bankruptcy. Chrysler dealers must either sell their existing inventory to consumers or to other Chrysler dealers that are not closing. This must be done by June 9, 2009. With current auto sales very, very sluggish its hard to see dealers wanting another dealers unsold inventory. The status of the closing GM dealers and their inventory still developing as GM file for bankruptcy on Monday, June 1, 2009.

Buying a Chrysler during bankruptcy & dealership closing - Pros & Cons

Pros:

• Great Prices on remaining inventory.
• Even better deals on 2008 leftovers (we're hearing reports of discounts of 50% off MSRP).
• The U.S. government promised to guarantee the Chrysler warranty.
• Chrysler is currently offering very good rebates and incentives.

Cons:

• Uncertainty about how U.S. government backed warranty coverage will work (Repair shop at the White House?).
• Who will perform warranty repairs and service? If local dealer closes, next closest dealer may be quite far away.
• Uncertainty about what will happen to Chrysler going thru the bankruptcy process.
• Uncertainty about product quality.

Buying a GM during bankruptcy & dealership closings- Pros & Cons

Pros:

• Aggressive pricing on dealer inventory.
• Potentially great deals on 2008 leftovers.

Cons:

• Uncertainty about future warranty coverage will work.
• Who will perform warranty repairs and service? If local dealer closes, next closest dealer may be quite far away.
• Uncertainty about what will happen to GM as they go through the bankruptcy process.

I don't think that you should go out and buy a Chrysler or GM car for the heck of it just because you might get a great deal, but if you were in the market for a car this might be the best time to buy. In some cases you might be able to get a brand new car much cheaper than a used car in the same class. It's important for you to analyze the pros and cons as they apply to your particular situation. If you can get a Dodge Ram for 50% off MSRP but the next closest Dodge dealership is 300 miles away it might not be the best situation but if you're in a major metropolitan area with another dealership less than 25 miles away it's a whole different story.

One thing that I highly recommend is that if you decide to take advantage of these prices you should use some of your savings to purchase a third party extended warranty. In our chapter on buying an extended warranty we always recommend buying from a third party to save money over buying at the dealership but in this case there is another reason. Third party warranties sold by CARCHEX will provide coverage in the event that the original manufacturers warranty went away for some reason. Although the government has promised they will back the warranties, sometimes politicians don't always tell the whole truth. A third party extended warranty will give you peace of mind. CARCHEX makes it easy to shop for a third party warranty by presenting several warranties from top administrators and letting you choose the one that's right for you. They do not use any high pressure sales tactics.

Remember, as with all car deals, the price of the new car is not the only thing that determines if you are getting a good deal. You must consider loan APR, trade-in allowance and other hidden dealer fees. Even with these great price offers you should read our entire article on buying a new car so that you learn about all aspects of getting a good deal and not getting screwed by car dealer scams.