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Filing raises GM consumer concerns

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By MICHAEL SASSO

msasso@tampatrib.com

Published: June 2, 2009

TAMPA - With Monday's bankruptcy news, consumers can be forgiven for worrying about buying a General Motors vehicle.

GM, the federal government and consumer advocates are trying to alleviate people's fears. With the government's financial backing, the automaker is promising to honor vehicle warranties. Although certain brands, including Pontiac, are being discontinued, many GM dealers still will be able to service those brands.

Some local dealers insist customers won't notice a difference at GM dealerships, either.

"It's business as usual for the dealers," said Dennis Slater, executive manager at University Chevrolet in Tampa.

However, people should be aware of the uncertainties of a GM bankruptcy, including the resale value of Pontiac and any other brands GM decides to discontinue. Here are some consumer questions and answers about the bankruptcy:

Will any local GM dealers close?

It isn't clear yet. Two weeks ago, GM announced it would end agreements with about 1,100 dealerships nationwide. On Monday, the company revealed it may cut as many as 2,600 nationwide.

That includes about 500 Saturn and Hummer dealers, which will leave the GM umbrella when GM sells or shuts down those brands. Another 500 dealerships will be consolidated, and GM expects 400 dealers to voluntarily close, according to The Associated Press. GM is eliminating its Pontiac brand.

So far, GM has kept quiet about which dealerships it has targeted for closure.

If I own a Pontiac or other brand that gets eliminated, where can I have it serviced?

Slater, the University Chevrolet executive, said existing Chevrolet, Buick and GMC dealers would still be able to service Pontiac vehicles.

Mike Quincy, an automotive specialist for Consumer Reports, said GM is expected to continue providing parts for some time. Longer term, it's usually not that difficult to find spare parts, even for discontinued vehicles, because of the prevalence of car enthusiasts, he said.

What about resale value?

Most likely, brands that are discontinued will see their resale values drop substantially, according to Consumer Reports. That happened after GM stopped producing the Oldsmobile brand and after Chrysler stopped its Plymouth line. However, if a customer plans to keep a car for a long time, depreciation isn't an issue, Quincy said.

Will Florida's lemon law still apply to GM?

Like many other states, Florida has a lemon law that can award refunds or replacement vehicles to customers who buy a defective new vehicle. Terence McElroy, a spokesman for the Florida Department of Agriculture and Consumer Services, said the agency will continue to accept lemon law applications during GM's bankruptcy. However, anyone filing a complaint against GM will first need to go through the automaker's arbitration process, which is facilitated by the Better Business Bureau, McElroy said.

Reporter Michael Sasso can be reached at (813) 259-7865.

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