It Could Be Time to Buy a Saturn

By Jessica L. Anderson
Kiplinger's Personal Finance
Sunday, October 11, 2009

If you're in the market for a new car, GM's loss could be your gain. Saturn's dealers have until the end of October 2010 to close, now that a deal has fallen through to sell the car line to the Penske Automotive Group. But many showrooms could close by January because inventory is low.

That means the sooner you shop, the better your choices. And there are good reasons to consider a Saturn. Its most popular models -- the Aura midsize sedan, the Vue small crossover and the Outlook midsize crossover -- all score well in Kiplinger's Personal Finance's rankings. The Aura XE was Kiplinger's Best New Car for the 2007 model year.

According to TrueCar, an automotive-data company that tracks prices, the average transaction prices for Saturn's most popular models are within a few hundred dollars of invoice. The average discount from sticker price is close to $1,000 on these models. And more incentives are likely soon.

GM will honor the warranty on any Saturn after the brand has passed. Vehicles will be serviced by Saturn dealerships until they close and afterward by other GM dealerships.

Parts won't be an issue, says Kelley Blue Book's Jack Nerad, because Saturn products share platforms and components with other GM products. Aftermarket parts companies are also likely to step in to fill any gaps.

It's a somber ending for Saturn, which branded itself as a new kind of American car company and boasted quality-engineered cars and a happy cadre of loyal customers. But not long after Saturn's launch in 1990, General Motors shook that legendary customer loyalty by cutting costs and undermining innovative marketing strategies, eventually building cars of dubious quality.

Several years ago, GM invested heavily to revive Saturn with all-new, much-improved vehicles, but buyers stayed away. So in June, GM put Saturn on the chopping block as part of its bankruptcy-reorganization strategy.

If you're likely to trade in your car two to three years from now, buying a Saturn isn't the deal for you. Resale values are low, and they're likely to go a bit lower as the brand disappears. Nerad says that's typical of a brand in less demand.

For example, when GM announced it was shutting down the Oldsmobile brand, people still bought them, but the cars quickly depreciated. A year after Olds went out of business, two-year-old models had the value of other brands' comparable five-year-old cars, according to Kelley Blue Book.

But if you're the "buy it and keep it until the wheels fall off" type, resale values don't matter.

And who knows? One day your Saturn may regain its value as a collectible.

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