What to consider if you buy or own a GM car

This article is the archived version of a report that appeared in the August 2009 Consumer Reports magazine.

Although GM is in Chapter 11 bankruptcy, it will still back warranties and provide service. But should anyone in the market for a car jump at one of the great deals GM is likely to offer? Here's what to consider:

1. Price

GM is offering sales incentives—0 percent financing and/or cash rebates, for starters—on many models, including some we recommend. And with slow sales and excess inventory, dealers are ready to negotiate. But you still need to do your homework. Don't negotiate on a monthly payment; that gives the salesman too much leeway to play with numbers. Instead, keep negotiations separate for the new-car price, trade-in value, and financing, if necessary. Better yet, arrange financing before going to the dealer to buy, then see if the salespeople can give you a better deal.

2. Performance and quality

Any deal is only as good as the vehicle you're considering. Research its performance, reliability, safety, owner cost, and owner satisfaction. Several recent GM cars have done well in our testing and are very competitive in their classes. They include the Chevrolet Malibu, Cadillac CTS, and GM's three-row, crossover SUVs (Buick Enclave, Chevrolet Traverse, GMC Acadia, and Saturn Outlook). But all except for the Malibu have shown below-average reliability in their first years and so aren't recommended. See our Annual Auto Issue for complete Ratings or our monthly road tests for individual categories.

3. Resale value

During restructuring, it's likely that GM cars will drop in value. That's especially true for Hummer, Saab, Saturn, and Pontiac brands, which are being phased out or sold. The resale value for brands that are discontinued is likely to drop dramatically, as happened when GM phased out Oldsmobile in 2004 and Chrysler dropped Plymouth in 2001. That would have the greatest effect on owners who keep their vehicle for about five years or less. If you plan to keep the car for a long time, depreciation is less of a factor in overall owner costs. And if GM establishes itself as strong and stable in the future, the value of ongoing models could rebound.

4. Consumer protection

When Chrysler filed for Chapter 11 protection, many unsettled liability, personal-injury, and lemon-law claims related to the old company were caught up in the bankruptcy process. Even if such claims are eventually settled, the benefits might be limited. Consumers Union, the nonprofit publisher of Consumer Reports, has urged the government's Auto Task Force to protect consumers' claims during GM's bankruptcy process, but it's a risk to keep in mind.

5. Dealerships

GM is cutting its dealerships from about 6,000 to 3,600, so car buyers might see theirs close, especially after October 2010, when many franchise agreements expire. But you don't have to go to a dealer for regular servicing, even if your vehicle is under warranty. A good independent shop, especially one that specializes in your car's make, should be able to handle routine maintenance and many repairs. Moreover, independent repair shops are often less expensive than dealerships and, according to our Annual Auto Survey, generally provide a higher level of satisfaction. But you will need to go to a dealer for warranty and recall work.