Ad-free. Influence-free. Powered by consumers.
Skip to Main ContentThe payment for your account couldn't be processed or you've canceled your account with us.
Re-activateWhat happens if an automaker goes bankrupt?
Under a Chapter 11 reorganization, a manufacturer's normal operations would probably continue. It would still be building cars and providing service, so car owners might not have problems getting warranty repairs, parts, and service.
In a Chapter 7 liquidation, the company would effectively cease to exist and car owners would largely be on their own. The company would still have to address safety recalls. It's possible that if another automaker buys a defunct brand, it would continue to support owners.
Perhaps more likely is an automaker's jettisoning a division, as GM did with Oldsmobile in 2004 and Chrysler did with Plymouth in 2001. Support for owners of those makes has continued through other GM and Chrysler dealerships. But the resale values of the vehicles plummeted, as would probably happen with a Chapter 11 bankruptcy.
If resale value is a concern, avoid buying a make that might be phased out. If you plan to keep the car for a long time, depreciation is less of a factor, and buying from a brand going out of business could make it easier to find a good deal. For more information on which automakers are best, see "Who makes the best cars?"
Build & Buy Car Buying Service
Save thousands off MSRP with upfront dealer pricing information and a transparent car buying experience.
Get Ratings on the go and compare
while you shop
