American cars - are they still ok to buy?

May 15, 7:58 PMPhoenix Your Money ExaminerSusan Vycital

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First it was the big banks and now it seems to be the big car companies that are in trouble.   With Chrysler going into bankruptcy and GM not far behind, it seems that what was once stable forces in our country are now failing and brand names are going away.  Does that mean you shouldn't buy a car from them and is the dealership in your town safe?ney.cnn.com/news/specials/storysupplement/chryslerdealerclosings/CA.html

What many people don't realize is that the dealers are franchises in themselves and while their supplier is going under, many of them have other car lines that they sell.  Even if they are solely a Chrysler or Pontiac dealer, while they may have to downsize, they can still sell used vehicles.  Servicing of your vehicle will still be done at many of the dealerships that are losing one or more of their brands.  Although Chrysler and GM make the vehicles, they get the many parts they use from different suppliers.  Those suppliers also sell to independent garages, auto parts stores (i.e. Auto Zone, Checker, etc) and retail stores (WalMart, Target, K-mart, etc) .  While they will be losing business by not selling as much to the factories, they will still have the part available for you to get your car repaired if needed. 

With that in mind, now might be the time to take advantage of getting a vehicle at a very reduced price.  Those dealers who did get their letters of closing will have to get rid of their inventories as quickly as possible.  They cannot send them back to the manufacturers so they will have to make the best deals they can so they are not stuck with millions of dollars of inventory and have to go into bankruptcy themselves.

Just a couple of items to remember when you are car shopping , however, no matter what make you are looking at.  First, negotiate the price, not the monthly payment.  There are many web sites, such as Bank Rates.com,www.bankrate.com/gookeyword/rate/auto_home.asp, that will give you  the current rates and a calculator to figure what the monthly payment will be for the price you are looking at.  In Arizona, the sales tax and license fees are also added in so make sure you increase your price for about $1000-$2000 more for these items.  By doing this, you will give yourself an idea of how much you can afford before you stand on the lot so you are not wasting your time in the 100 degree heat looking at cars that you can't go home with.

Next, your current vehicle.  If you are going to use it as a trade in, then go to Kelly Blue Book  www.kbb.com to see the value of it today.  Remember, the dealer can't and probably won't give you full value for yours if he is selling his at a discount.  And while it is your pride and joy, to the dealer it is  just another car on his lot that he has to sell so while you may think it is worth every penny and then some of the Blue Book value, to the dealer, it is just another piece of iron.

So go ahead and look at that Jeep that you have always wanted or the Chevrolet truck that you want to haul your new trailer with.  These companies will still be around to service and honor their warranties.  You may have to drive a little out of your way to find your nearest dealer but if the price is right, it might be worth your time and trouble.