Right Time To Buy A Saturn?

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 will be gone by January because inventory is low, according to dealers quoted in the Detroit News.

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 proprietary rankings (see the Kiplinger Car Center). The Aura XE was Kiplinger’s Best New Car winner for the 2007 model year.

According to TrueCar (www.truecar.com), 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. For example, the Aura XE has a sticker price of $23,375. TrueCar reports an average transaction price of $22,506—$869 below sticker.

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The front- and all-wheel-drive trims of the Outlook XE are selling for below invoice ($30,414 and $32,432 respectively), as is the four-cylinder VUE XE ($23,120).

GM will continue to honor the warranty on any Saturn purchase 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 boasting 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. (Remember the Ion?)

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

A last ray of hope for the ailing brand broke through the gloom when Roger Penske, the former Indy 500 champ and owner of the Penske Automotive Group of dealerships, tentatively agreed to take over the Saturn lineup and its 350 outlets. But on September 29, GM announced that Penske killed the deal. He had hoped to find a carmaker — possibly Renault-Nissan -- that would make Saturn cars after GM stopped production of current models. But no such agreement came through.

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 a typical symptom 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.