GM heads to bankruptcy court; What's next for consumers?

By Zaneta Lowe  - bio | email | Twitter

COLUMBUS, GA (WTVM) - Given GM's bankruptcy announcement, experts say there's a chance more dealers across the country could be cut.  Plus, those already slashed may be forced to make changes sooner.

So what does this mean for consumers, especially those driving GM vehicles?

It's a question our ConsumerWatch Team took to local car dealers and automotive industry experts.

"They just about had to go bankrupt." That's how Jay Automotive Group Chairman J.G. Stelzenmuller, III describes GM's bankruptcy.

"It gives them some latitude to do away with some debts that they wanted to get away from and to make some plans for the new GM," adds Stelzenmuller.

The "new" GM will include a smaller dealer base, and fewer lines of vehicles.

Around 1100 GM dealers have already had their contracts terminated, and more are expected as the company phases out brands like Saturn, Pontiac and Hummer.

Jay Automotive sells two of those three, but Stelzenmuller says he believes Saturn has a buyer and Pontiac may eventually make a comeback.

Furthermore, he's even more confident in his company's future.

"In our case, our financial situation at our dealership is very, very strong. We have no problem in weathering whatever storm might come our way and we're gonna be here to serve the customer."

Speaking of the customer, what does GM'S bankruptcy mean for the average consumer, especially those driving GM vehicles?

Experts say warranties will be honored, and getting service shouldn't be a problem, except for people living in smaller areas where there are no more GM dealers.

The biggest impact however, some say, is the short term value of those vehicles.

"If you're buying a new car and you want to trade it in, in say, two or three years, or you have one already and you're looking to get a new one in the next year or so, your resale value is going to be surprisingly low," explains Senior Automotive Editor Brian Moody.

However, Moody says if you plan to keep your vehicle for several years, resale value shouldn't be a problem.

Meanwhile, if you're in the market to buy, now may be the best time.  Experts say there are several deals, even cash incentives to take advantage of.

"We saw for example, a Chrysler 300 which is like a $38,000 car selling for less than $25,000, that's a pretty big deal," adds Moody.