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Impacts of Saab Bankruptcy on Owners

In amongst the last-minute Christmas shopping and preparing for the holiday festivities, we received some sad news in the automotive industry. We’re sure you’ve heard by now, but last week Swedish Automobile AB, filed for bankruptcy in a Swedish court.

 

This announcement by the parent owner of Saab came after General Motors Co. refused to allow a bailout sale to two Chinese companies. For Saab who has not been able to pay any bills since March or its employees since August, this is a tough way to go out.

 

The big questions out there about this announcement include:

 

  • What will happen to the estimated remaining 2,400 Saab vehicles on North American dealer lots and showrooms?
  • Prices are already dropping on new Saabs - how much will these prices fall?
  • What will the impact be on Saab owners?

 

For all three of these questions, the crux of the matter really comes down to what these vehicles are considered to be worth. This estimated value will have the greatest impact on the remaining unsold Saabs.

 

Adding some salt to the wound is the announcement this week that Saab has suspended all warranty coverage. Without a warranty on new vehicles or on those currently on the road, the real issue for current owners or owners-to-be is with the insurance company. For Saab drivers, if you plan to drive your car until it stops working, other than the issue of finding replacement parts - you will likely be okay. But if you are in an accident, your car insurance company is more than likely to be quick to write-off your car since it is no longer assumed to be as valuable as it was two weeks ago. In addition, without a warranty, the resale value is definitely impacted.

It should be noted that General Motors has announced that it will honor warranties on Saabs sold before February 2010. The company estimates that it will be covering the 4-year warranty and 50,000-mile warranties on around 48,000 Saabs sold in the U.S. and 9,000 sold in Canada.  Any 2010 and 2011 Saabs will be sold “as is” - just like a used car.

If you’re the owner of a Saab, what does this mean to you? Well, this is when it is useful to research gap insurance and to talk to your insurance company. If you have a Saab that is still under warranty, it is a good idea to contact General Motors and find out if there is anything you need to know.

If you’ve been thinking of buying a new Saab and have done the research on a new Saab 9-4X or Saab 9-5 Sport Sedan, be sure to talk to your dealer about warranty options, talk to your insurance company to find out how your insurance will be impacted,  and call a few repair shops and talk to your dealer about replacement parts. It is easy to be swayed by the likely much more lower price on a new Saab, but keep in mind the issues of car insurance, warranty status and the availability of replacement parts.