Discontinued Cars Are Seldom A Bargain Car Pro Commentary

discontinued signLast weekend on the syndicated Car Pro Show, I had a listener who asked about buying a Suzuki. I could tell that the price had him intrigued and I hated to burst his bubble by telling him it just wasn’t a good idea. Once a car company ceases to do business, or declares bankruptcy, a host of problems arise. The biggest ones include parts availability, places to service the car, and ability to finance a car like this.
I recounted a story to the caller about me almost falling in this trap myself back when I owned dealerships. When Daewoo pulled out of the U.S. market in 1999, I had the opportunity to buy 100 or more brand new Leganzas for $5500 each. The cars had a window sticker price at the time of around $15,000. I was ready to purchase a slew of them, until I called around to lenders and found out they would not finance these cars under any circumstances. The deal was off.
The parts issue is the one that concerns me most. If you have a failure and parts cannot be obtained, the car is virtually worthless. The more time that passes, the harder parts can become to get. There are also no continual shop manuals, or Technical Service Bulletins coming out from the factory. There are not even places to perform recalls, which can be a safety issue.
You have to consider the cars themselves too. Generally, if they were good cars, with a good reputation, the car would have probably been a successful seller. It seems the worst cars are the ones that cease to exist.
I should point out that it can be different for vehicles that are discontinued, but the parent company is still doing well. In cases like this, the vehicles are generally heavily incentivized and can be bargains. Often resale value will suffer, but if you plan to keep the vehicle more than 7 or more years, this really isn’t an issue. Neither are the parts problems, the service problems, or the other issues that arise from a car company going out of business.
We learned this week that the VW Routan van had been nixed. It joined other 2013 models that have been axed, like the Chevy Avalanche, Mercedes R-Class, Chrysler Town and Country van, Jeep Liberty, Kia Sedona van, Mazda CX-7 SUV, Mitsubishi Eclipse, Volvo C70, and Lexus HS 250h. There may be other casualties before the 2013 model year ends.
We had a huge shakeout of brands 4 years ago or so, when we lost Hummer, Pontiac, Oldsmobile, and Mercury. When the news was announced, these cars became instant bargains, and the only risk was resale value since all of them shared parts with other GM and Ford siblings.
Occasionally, we see some discontinued vehicles rise in price. The Pontiac G8 is a good example, some of the Hummers went up in value after they became extinct, and the Ford Excursion became a hot commodity after it was killed. These cases are pretty rare, however, as most discontinued cars plummet in value.
Consider these factors when weighing out the pluses and minuses of buying a car that is no longer produced. The upfront savings can be big, but you could pay all that back, and more, down the road.


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