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Orphan Cars - A Bad Bargain?

Article

If you're planning to buy a Pontiac, Saturn, or another soon-to-be-extinct brand, consider its five-year resale value which could be as low as 15%.

Pontiac, Saturn, and now (possibly) Saab are all going the way of the wooly mammoth, along with some outdated models from still-viable car makers. That translates into a lot of discontinued cars on dealer lots, some of which could be real bargains. Many, however, won’t be worth the money, even with a sharply reduced price tag, according to some automotive experts.

One of the primary reasons why orphan cars may not be a bargain is the loss of resale value. Cars that are both reliable and popular are worth more when they are a few years old than cars that aren’t, so it’s almost axiomatic that a car model that’s no longer being built is likely to have a lower resale value than one that’s still rolling off the maker’s assembly lines. Buy a Honda Accord and you’re likely to get back almost 50% of its value after five years. On the other hand, buyers who are lured by fire-sale prices on models on soon-to-be-in-limbo cars like the Kia Spectra and the Chrysler PT Cruiser, along with all Pontiac and Saturn models, may want to factor in five-year resale values that may be as low as 15%.

If you’re planning to drive the car for 10 years or until it dies, whichever comes later, its resale value is not an issue, but if you plan to trade it in within a few years, take a look at sites like Edmunds.com and Kelley Blue Book for the fair market value of any car you may be thinking about buying. Using that number to haggle for the lowest possible purchase price on the car can make a lower resale value less of a problem.

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Victor J. Dzau, MD, gives expert advice
Victor J. Dzau, MD, gives expert advice