No Pontiac, Saturn bargains yet

Killer deals on dying brands at least months away, analysts say

Nathan Hurst / The Detroit News

Pontiac dealers knew one thing was certain after General Motors Corp.'s announcement Monday made the iconic brand's demise official: The vultures would soon be out.

"We went through it a few years ago with Oldsmobile," said George Fowler, general manager of Superior Pontiac-Buick-GMC in Dearborn. "People want that big deal."

Buyers may hope for the bargain of the century on Pontiacs and other doomed GM brands -- including Saturn -- but experts say such expectations shouldn't run too high, at least for now.

"The best prices and deals on Pontiacs and other dying brands are going to be in the months to come, not right away," said Jesse Toprak, senior industry analyst with Edmunds.com.

Already, Pontiacs selling in March went off dealer lots at a median 21.9-percent discount from the sticker price. That's the highest average concession among all eight GM brands, according to data by Edmunds; Hummer, which is likely to be sold, had the lowest average discount, at 15.8 percent off sticker.

GM said Monday the 2009 Saturns will be the last, but Pontiac will be around for another year.

GM hasn't announced what extra incentives, if any, it'll roll out to help dealers clear lots of Pontiacs and Saturns over the next few months.

Toprak said when GM discontinued Oldsmobile, it had roughly two years to sell off inventory. By the end of that period, the final vehicles were selling for about half off. Of course, Pontiac's phase-out schedule will be quite accelerated, given the urgency behind GM's need to restructure.

Pontiacs are sitting on lots 149 days on average before selling, Toprak said. "And if they want to really get rid of those by the end of the year, they'll have to get aggressive."

No matter what the deals, Philip Reed, senior consumer advice editor at Edmunds, said consumers shouldn't shy away from buying Pontiacs or Saturns. But he said the best prices won't come for months, and even then, buyers will find the best bargains if they're willing to be flexible on color and amenities.

"For someone who just wants to buy for the utility over a long period, this is a good buy," Reed said. "The only hesitation should be for people who are looking to trade in for a new vehicle in a couple of years. These are going to be dependable deals for those who want to keep the car for a while."

Owners of Pontiac and other soon-to-be-retired GM brands might panic that their vehicles' residual values will plunge.

"There's some sense that maybe these vehicles will tumble in value, that they'll be worth half what they were worth on Friday. This is not the case," said Jack Nerad, executive market analyst for Kelley Blue Book. "What we've seen over time is a gradual but pretty steady erosion in the residual value of these brands. Because of that, we don't expect a precipitous decline in value."

According to the latest Kelley Blue Book issue, a new Honda Accord is projected to hold 60 percent of its value in 24 months, a Chevrolet Malibu LS sedan is anticipated to be worth 41 percent of its retail price and a Pontiac G6 GT sedan 38 percent of its value.

"After this news settles in, maybe it might affect that (Pontiac residual) by a point or so, but we're not looking at the precipitous declines one might expect," Nerad said.

For dealers, that means that they will at least be able to peddle a strong value proposition.

"We've got to wait and find out how this all plays out," said Joe Serra, president of Serra Automotive Inc. in Grand Blanc, whose dealerships includes two Pontiac and two Saturn franchises. "We don't know yet what the market will dictate. But we've got great products we know GM will be there to stand behind them. That's what counts."

Detroit News Staff Writer Christine Tierney contributed.