By on April 28, 2009

There are three things you really can’t avoid if you’re an American: death, debt (government inherited) and sales. Now that four GM brands have officially Oldsmobiled themselves, you’re going to hear a lot of retail sales cheerleading in the MSM. “Now’s the best time!”, “Vultures are gonna feast on these deals!”, and my own personal favorite “Get ’em while they last!” But unfortunately that last cliché is a really big part of GM’s problem.

The axe has one hell of an arc to swing this time around. And the targets aren’t exactly the cream of the crop either. For every G8 and Astra that may truly be a great deal, there’s thousands upon thousands of G8’s and Astra’s lined up right behind them that likely have the wrong options and features. Time to buy? If the government does provide the sugar candy of subsidization to consumers, yes. Debt be damned. But keep one thing in mind.

When Isuzu and Oldsmobile went kaput, we were seeing their near-new cars sold at less than half the price at the auctions. Now that four brands and about eighteen models are hitting the permanent pavement, the best carcasses may not be from the first “vulture” flyers. In fact with Pontiacs at least running through 2010, and GM still sucking at the government teat, this may be a “Toe Tag Sale” that’s well worth missing. After all, a real vulture usually waits until the carcass is long dead before feasting.

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41 Comments on “Hammer Time: Don’t Buy A GM Orphan . . . Yet...”


  • avatar
    ajla

    For every G8 and Astra that may truly be a great deal, there’s thousands upon thousands of G8’s and Astra’s lined up right behind them that likely have the wrong options and features.

    Are there really that many different ways to do a G8 and Astra that it would effect the price that much? I mean they aren’t minivans or pickups with a million different configurations.

    When Isuzu and Oldsmobile went kaput, we were seeing their near-new cars sold at less than half the price at the auctions.

    Okay, but isn’t that mostly a short-term issue? For example, if I went to a dealer tomorrow with a 2001 Intrigue as a trade, the dealer is not going to offer me any less money than if my trade were a similar condition 2001 Regal LS.

  • avatar
    akear

    Owning an Oldsmobile Intrigue I have had practice owning an orphan car. It is a hallow feeling, but you also try to kid yourself you are driving a unique car. Once a lady asked me did I enjoy my Lexus, I told her it was an Intrigue. She gave me a puzzled look. Maybe she thought the last generation Oldsmobile logo looked like a current Lexus logo.

    The GM orphanage will benefit with the addition of the G8 and Astra, both are which better than the Intrigue. They all will eventually end up on the island of misfit GM cars.

    What is ironic is that GM’s biggest misfit, the Aveo, still lives on. The Aveo is quite possibly the worse GM car since the Chevette.

  • avatar
    mtr2car1

    as a tie in question, what is GM’s liability going to be for all those “Total Confidence” Hummer, Saturn and Pontiac buyers from the past 45 days or so?

    Maybe it’s not such a bad time to if they are still going to guarentee the resale in a couple of years – of course there may be nothing to trade it in on by 2010

  • avatar
    sr20de

    A close-to-new G8 GXP for $20k would have me signing on the dotted line.

  • avatar
    akear

    From a distance that girl looks like Kelly from Married with Children. The women behind the wheel looks like a zombie. Maybe she is seeing Saturn’s future.

  • avatar

    You know, I’ve really had my eye on either a Fiesta or a Fit for a while now, but I can’t say that I’d walk away from a G3 if they were offering it for $10k or less. I’ve got a while before I buy anything, so it’s nice to be able to wait things out a bit, but what interesting times…

  • avatar
    jkross22

    Timely article, Steven. I have noticed that Ebay typically listed 12-15 G8 GT’s at any one time. There are now 4, and one of those is being sold by a private party.

    Any insight on what happened? And how can I get to an auction here in So Cal when the time is right?

  • avatar
    MBella

    jakecarolan, I’m pretty sure you can get a new Aveo for $8K if you play your cards right and shop around.

  • avatar
    no_slushbox

    jakecarolan:

    I’m sure you can get a new G3 for under $10K now; since you are waiting you will likely be able to get a new Vibe under $10K.

  • avatar
    N8iveVA

    jakecarolan

    go buy a Fit or wait for the Fiesta; a G3 isn’t even worth $5,000

  • avatar
    akear

    The G3 and Aveo would make passable pizza delivery vehicles. Couldn’t bad GM just be GM’s orphanage? A college student could get really cheap G3’s there.

  • avatar
    meefer

    So could I time it earlier if I wanted….say a Saturn Sky Red Line? If it was half MSRP that’d be sweet.

  • avatar
    eh_political

    Steven,

    Would you care to make projections on the price range G8 models will hit? Do you have a target?

    Secondly, and of greater relevance I suppose, what sort of a trajectory do you see for the Vibe? I suspect all of these models will get snapped up quickly by anyone with a clue.

  • avatar
    mcs

    @jakecarolan

    but I can’t say that I’d walk away from a G3 if they were offering it for $10k or less.

    Remember, you can get a new Versa for $10k or a $10k Hyundai Accent.

  • avatar
    akitadog

    I’m eyeing a Sky Red Line or a G8 GXP for the fire sale. I’d really like a Vette or Camaro SS, but I don’t think they would drop much in price, if at all, through GM’s restructuring.

    Mmmm… half-price Camaro…

  • avatar
    Bimmer

    jakecarolan,

    in Canada last week I’ve seen an add for Aveo (twin of G3) for $9K cash.

  • avatar
    amadorgmowner

    Thanks alot GM for devaluing further my wife’s 2001 Montana and my oldest son’s 2004 Vibe. What’s next? Dropping GMC and making my Yukon XL Denali worthless? I swear, GM hasn’t learned anything. They make a decent car like the G8, only to kill it. Why not move it over to Chevrolet as the Impala SS? GM’s biggest problem is shitty marketing and bean counter types who kill potentially great products. Come on, Fritz, give us a Chevy G8 – Impala SS, what a nice way to complement the new Camaro. I wouldn’t buy a Toyota, after all. Kill the Aveo, it is a horrible POS.

  • avatar
    ConspicuousLurker

    They make the Vibe in my town (NUMMI). When I looked at the Matrix, the price and the quality made me shrug my shoulders. It really wasn’t that great of a deal. The Matrixes I looked at all ran around $15k – 16k; if you could find a Vibe for 8k – 10k, I would jump all over it. The cheap plastic of the interior and the driving feeling leaves a lot to be desired, but it’s small and functional.

    And the icing on the cake is that it’s built on the Corolla platform. Not the most refined thing on the road, but probably the cheapest thing to drive in the long term.

  • avatar

    ConspicuousLurker : if you could find a Vibe for 8k – 10k, I would jump all over it.

    albeit that I sold a 70k mile 05 Vibe at the dealer auction a month ago for 7600, yes a new one for 8 grand I think anyone would ‘jump all over’

    I understand that greed gets exciting, however…remeber that the dealers out there keep the market liquid. New cars are not going to get as cheap as this site is talking about. When they get down to competitve brand used cars bring, the lines in the graph cross and you have a ‘bottom’, and that bottom is still higher than what most civilians believe to be true.

    Good deals of course, arent they all, crazy deals that don’t make sense…no.

    Apply common sense, not by way of the factories, but used car dealers and the used car market is like wild pack of coyotes, they move quick,strike fast and they don’t leave much meat on the bone.

  • avatar
    ConspicuousLurker

    jwolfe:

    I agree. That’s why I used the condition “if.”

    We’ll see what happens. But I believe there will be deals all around when the dealers that were teetering, fail. And are those thousands of dealers that the feds are probably going to strong-arm out of the market (just like they’re trying to do to the bond holders) going to be able to effectively dole out their inventory to avoid a flood?

    Does the used market have enough cash or credit to assorb all the excess inventory? Are there banks willing to fund all this? Are there enough consumers with enough cash or credit to pay these middle-men?

    There are a lot of questions.

  • avatar
    Flipper

    I really liked the Astra 2dr when I looked @ one in Sept but wasn’t ready to buy a car yet @ that time. The once $21K price had been dropped to ~ $ 16K. And soon a $11K one will sound even nicer. . . But I can only imagine what it will be like to find parts for a re-badged Opel built in Belgium in 5 >10 >15 years. Even if this car is only $8k by Dec it will have to be purchased only as a completely disposable car.I wish G8 purchasers a lot of luck also.

  • avatar
    vento97

    amadorgmowner :

    Come on, Fritz, give us a Chevy G8 – Impala SS, what a nice way to complement the new Camaro. I wouldn’t buy a Toyota, after all. Kill the Aveo, it is a horrible POS.

    The only thing Fritz wants to give is a nice Golden Parachute to himself after GM’s demise…

  • avatar
    threeer

    I just don’t see Astras and G8’s going for half price…sorry to burst people’s bubbles. Agreed that there will be deals to be had, but we’re getting carried away here thinking that they’ll practically give them away. I, too, would like a nicely optioned Astra (I’m a hopeless Opel fan…blame my father. I rode in more Opel Rekords as a child than I can mention…great car), but don’t see them going to $11k anytime soon. And don’t forget, if they do wind up selling for nearly 50% off MSRP, you’d better be intending to keep the car until the wheels fall off, as there will be zero resale (of course, my 2006 Ford Fusion is already worth less than half of what is was new…horrid!). Now…what about some of the more “select” vehicles? Does it make sense to consider, perhaps as I have, a lightly used Solstice? I’d pass on anything with a “G” in front of it, with exception to the G8.

  • avatar
    ReGZ_93

    The only available Astras on the East coast are three door XR Auto’s in white or red.

    All the five door models are gone, and there are no XE’s to be found at all.

  • avatar
    TRL

    Interesting that so far there don’t appear to be many upcoming deals on SUV’s or trucks as a result of GM’s demise. The big bad vehicles that caused the end of the world are not the ones cancelled at all. Ironic at best.

    Even if they do pull the plug on GMAC they will be worth as much/little as a Chevy so they won’t be steals. I think Pontiac still has thousands of unsold rebadged Equinouxes around from last year, but hardly a desirable vehicle. Maybe the best offer will be whatever Saturn called their Enclave. Still to rich for my third car needs.

    Looks like I need to wait till next week when I can start looking around for a lightly used Dakota. I’m thinking an under 50k mile 05 crew for $5k buy mid summer.

  • avatar
    A is A

    Time to buy? If the government does provide the sugar candy of subsidization to consumers, yes. Debt be damned.

    You are condoning the buying of STOLEN goods.

    Any decent, freedom loving person should stay clear of buying any GM or Chrysler (i.e. “Twentieth century motors”) offering. On principle.

    http://www.google.es/search?source=ig&hl=en&rlz=&=&q=%22Twentieth+century+motors%22&btnG=Google+Search

    “Debt be damned” = Morality be damned. This kind of Nihilism is going to make the final financial meltdown much worse.

    Be moral, act on principle: Do not buy Twentieth century motors junk.

  • avatar
    97escort

    From the auction results I have seen, used Plymouths and Oldsmobiles sell for about the same as other cars of their age and mileage group. Maybe they took a bigger hair cut at first, but after a couple of years used cars reach prices which are pretty stable with comparable vehicles IMO.

    There may be some good deals off the showroom floor after discontinuation, but vultures waiting around for stinking good deals on used versions are likely to go hungry. Remember, discontinuation lowers the supply of new vehicles which usually drives up prices of both new and used vehicles.

    And then there is the possibility that some cars like the Pontiac Solstice will become classics or at least be perceived to be potential classics which may increase demand. Someday a Hummer may sit in a museum for people to gawk at like a fossilized dinosaur. Buy these dogs before they become extinct if you have a long time horizon.

  • avatar
    MisterB

    I agree that you have to look at the DEALERS.

    The dealers can not possibly sell cars at 1/2 price and stay in business. The dealers have borrowed most of the money for the cars in inventory. If they sell a car at a loss they will end up with NEGATIVE CASH for the transaction because they will need to pay back GMAC etc. more money than they receive from the sale. The only hope for the dealers is to sit tight and hope that car sales improve OR that the MANUFACTURERS increase their rebates/discounts in order to move cars. Also, when dealers fail/bankrupt, GMAC etc. takes the cars back; there is no bankruptcy sale. The manufcaturers have not run GOB sales to protect the remaining dealers.

    It all goes back to what the MANUFACTURERS do. If Chrysler were to liquidate – which now seems very unlikely – then one would see mad max liquidation prices. However, if C and GM remain in business with plenty of government cash funding them, then most likely we will see an increased rebate sale with a major reduction in production of new vehicles. Some type of government cash rebate – cash for clunkers etc. is very possible.

    The bottom line is that we will most likely see higher cash back on most vehicles across the board including most cars/trucks and all manufacturers. Huge discounts on the discontinued vehicles/brands seems unlikely.

  • avatar
    Lokkii

    I’m not in the business, so I don’t have the perspective of those who do. Can somebody help me sort this out?
    Here’s where I can’t put the pieces together…

    The lots (and back lots) are full of unsold cars. The dealers have to move them to get their money out of them. No discounts. Got that.

    However most people are only shopping the sales – remember that for the last few years the U.S. manufacturers have been trading future sales for (then) current sales by holding firesale financing. Theoretically this means that the normal aging cycle of the car market was disrupted – the “gotta buy’s” don’t gotta buy… they can wait a few years. The “Wanna buys” can’t get financing. I got that.

    However the car makers can’t recover until they start -producing- new cars again. Thanks to their contracts, right now they have almost all of the labor costs with none of the offsets generated by productivity. OK?

    Yet the underlying issue is cash flow – not cash in the bank. As anybody who has tried to run a small business knows, you can keep going at a loss as long as you have cash flow.

    Aren’t the D3 forced to run fire sales to get the cash flow running again? I thought that was the idea of the loans… to prime the cash flow pump.

    Where am I failing in my analysis…? I know I’m wrong, because that’s not what’s happening….

    Educate me please!

  • avatar
    Pch101

    However the car makers can’t recover until they start -producing- new cars again. Thanks to their contracts, right now they have almost all of the labor costs with none of the offsets generated by productivity.

    Since GM (and presumably) Chrysler sell cars at prices too low to generate a profit, producing more volume with today’s product portfolio just creates more losses and more negative cash flows.

    The labor costs don’t matter much. Labor costs are a small component of the overall cost. The highest expenses come from the costs of parts and materials.

    In the short run, they are far better off just shutting down production, so that they don’t spend money on parts to build cars that they can’t sell. Even if they had to pay for job banks (which now they don’t), it would still be cheaper to stop producing until they burn off the inventory. But that will hurt suppliers, which are geared up to make a lot of parts for cars that nobody wants.

    In the medium term, they need to build strong brand identities around cars that are appealing and that people want to buy at higher prices. For GM, that means selling a lot fewer cars, because that strategy would require them to eliminate all of the dogs from the lineup, so that only the stand-out winners are being sold.
    For Chrysler, that’s an even greater problem, as it has a terrible lineup, so it needs outsiders to jump in with new products sooner, not later.

    Back to the article, if I was in the market for a new GM car, I’d wait, too. As time goes on, they’ll be further pressured to turn product into cash, even if there are losses, so GM prices should fall.

    I wouldn’t assume that everyone else is going to be slashing their prices, though. I suspect that most of the others will mostly hold the line. GM fire sales never forced them to slash prices before; I don’t see why this would be any different.

  • avatar
    MikeyDee

    Don’t ever buy a car with an engine that has not run for over a year. Cracked oil seals, damaged bearings. New engines are built to be run, not sit idle for over a year.

  • avatar
    Roundel

    There was so many Astras out there, that they haven’t even shipped over 09s.
    I am sure they will have enough to last them the whole year.
    Its a real nice car, with some small nit pick problems. One of GM’s best on the road. It just wan’t American enough. Its odd to actually see one on the road, but a few are out there.
    Same with the G8, still have plenty of inventory left yout there.
    Steven is right, these things will be bargins once they are two years old and have 30k on them.

  • avatar
    ZoomZoom

    Time to buy? If the government does provide the sugar candy of subsidization to consumers, yes. Debt be damned.

    “A is A” in response:

    You are condoning the buying of STOLEN goods.

    Any decent, freedom loving person should stay clear of buying any GM or Chrysler (i.e. “Twentieth century motors”) offering. On principle.

    “Debt be damned” = Morality be damned. This kind of Nihilism is going to make the final financial meltdown much worse.

    Be moral, act on principle: Do not buy Twentieth century motors junk.

    Holy cow. You are so so right, I’m almost ashamed that the thought didn’t come to me until I read your comment.

  • avatar
    Kyle Schellenberg

    Here’s another angle. What is the psyche of the average GM worker over the past year?

    Suppose I’m a worker and the news is all doom and gloom or perhaps I’m embarrassed that my company is being propped up by taxpayers; how likely am I to make sure I do the best job I can to create a car I can be proud of?

    GM cars manufactured over the last little while may have suspect quality even beyond what is typical.

  • avatar
    t-truck

    Will any cars from the doomed brands living on under a new umbrella?

    Obviously the brand engineered models are gone, but will we see Chevy Vibe, or Buick G8?

  • avatar
    Kyle Schellenberg

    As long as the deals with Toyota and Holden are profitable, they will find a new home somewhere else.

  • avatar
    Lumbergh21

    While dealers need to make a profit or go out of business that is ideed what is happening. Dealers ARE going out of business, and their inventory, new and used is being snapped up at auction by the remaining dealers for much less than invoice/blue book. I saw a nice looking Mustang GT500 about four months ago, and decided to ask the driver who was just getting into it a little about the car. She bought it used, 1 year old, with ~13,000 miles for $25k. As an aside, she was a “Chevy” person, but she ended up buying it because she was tired of waiting for the much publicized arrival of the new Camaro. The dealer had snapped it up at auction from a bankruptcy sale in the Sacramento area. Why wouldn’t the same happen with new cars? A local Ford Dealer 25 miles south of here closed their doors in March, and the new and used stock is being sold at auction by the lein holder, Wells Fargo bank. I can’t wait to see what’s going to pop up on the lot of the Ford dealer in my town. Maybe another Shelby, Rousch, or Bullitt Mustangs. I might go as high as $35k for a new Shelby 500.

  • avatar
    A is A

    Holy cow. You are so so right, I’m almost ashamed that the thought didn’t come to me until I read your comment.

    A thought by Nietzsche came to my mind when I read this line you wrote, ZoomZoom

    Whoever despises himself still respects himself as one who despises.

    Chang “despise” with “to be ashamed” and you can turn your negative into a positive for you.

    Nietzsche is -philosophically- a vat full of poison. Bute there all diamonds and golden nuggets at the bottom of that poison.

  • avatar

    ConspicuousLurker :
    April 29th, 2009 at 1:25 am

    you bring up great points. Points that I nearly cannot understand myself when I was at the auction today in dallas 2500 registered buyers 4000 units and did millions in transaction today in one sitting. The factory sales are up bc of credit in my opinion. Dealers cant afford to buy open used cars, bc they have no floor for them, so they turn to the gmac and fmcc lanes, bc thats the only place to get somethign floored, hence driving the price up.

  • avatar

    A is A, I think it’s Orren Boyle’s Associated Steel that’s the best analogy here. 20th Century didn’t take any government money, while Associated did nothing but soak it up.

    Furthermore, Associated’s products were of low quality – if you remember, they were used to build a government housing project, which collapsed due to substandard steel.

    (For those who are lost, we’re talking about Ayn Rand’s novel Atlas Shrugged, which remains remarkably timely after all these years).

    D

  • avatar
    pissed_off_gm_owner

    I have owned an unreliable Saturn Vue for the past 3 years. When I finally had enough of the electrical problems (it just decides not to start some days, the radio comes on for no apparent reason, the horn honks intermittently as I drive – at only 50 000 km – barely broken in)and asked GM nicely to get out of my lease and get me into a Traverse, GM fought me all the way. They won’t let the dealer sell me a demo 2010 because (and I quote) there are just too many incentives to help me out on the price. They are only willing to get me into a bottom of the line Traverse model with no options and have me stuck in it for the next 5 years (or more as GM no longer LEASES vehicles). I can get into a (used) LUXURY VEHICLE with all the appointments I can think of for the SAME PRICE as their crappy base model. This truly is a kick in the face. I have been a loyal GM customer for the past 23 years and this is what I get for being so. The almighty dollar is more important than the safety and security of the drivers of their vehicles. God forbid my car fails to start in the middle of winter and I am left stranded somewhere with my small child in the back seat. I wonder how GM would take to press about a frozen family stranded in a crappy product. I can honestly say that this will be the last GM product I own and I encourage all out there to have the same view. You aren’t even a number to them…. far less than a pee-on!!!!!!

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