With automakers finally starting to reel in their rebates, $4,000 off the price of any new Saturn sounds like a sweetheart deal. The hefty discount brings the starting price of the sexy Sky roadster down to the low $20,000s, making it one of the cheapest sporty convertibles on the market. And it drops the price of the seven-seat Outlook crossover to the mid-$20,000s, a great price for a well-equipped family hauler.
The come-ons, however, omit one discouraging fact: Saturn is going out of business. Parent company General Motors has pledged to service all Saturn vehicles indefinitely through other dealerships, but smart car buyers know that the true value of a car also depends on what it will be worth in a few years when you decide to sell it. And the resale picture has never been hazier.
In addition to Saturn, GM is closing its Pontiac division and streamlining the lineups for Chevrolet and Buick. The company's Saab division may be shut down completely, and a little-known Chinese company has purchased Hummer. Crosstown rival Chrysler is likely to kill many of its underperforming models as well. And with a devastating plunge in auto sales over the past two years, Ford, Toyota, Nissan, Hyundai, Volkswagen and other automakers are also pruning their lineups.
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Automakers plan to retire nearly 50 models over the next two years, including some of the most popular cars on the market. Some of these cars will be great buys, fully backed by the manufacturers and still popular years from now. Others will end up as soon-forgotten orphans, barely worth the value of their sheet metal.
But don't expect the dealer to help you distinguish the classics from the clunkers; they don't want you to know when a model has been discontinued. To keep buyers from demanding fire-sale discounts, in fact, many automakers don't even announce when they plan to stop producing a model. It just disappears from showrooms.
To help identify the best and worst discontinued cars, I asked car researchers at Kelley Blue Book to identify models likely to be discontinued over the next couple of years. For some of these models, the manufacturers have confirmed that the cars are being axed; other models made the list because of strong indicators that they're being discontinued, such as manufacturing changes or declining shipments to dealers. The researchers then predicted the residual value of each of those models in five years -- the amount it's likely to be worth, expressed as a percentage of its original list price. The median vehicle has a predicted residual value of 22% in five years. The highest residual value is 35%; the lowest, 15%.
Residuals generally reflect a car's quality and reliability and the reputation of the automaker. So cars with high residual values tend to be the best-rated cars, whether they're discontinued or not. Residual values don't really matter if you're likely to own a new car for, say, 10 years, or the car's entire life span. But if you think you'll sell the car or trade it in within a few years, or you might want to buy a leased car after the contract expires, then residual values should be a key part of your purchase decision.
Getting a good price depends on how much research you do and how effectively you negotiate. Car shoppers should start by researching the fair market value of a car they're interested in at sites such as U.S. News' car-ranking site, MSN Autos, Edmunds.com or Intellichoice.com, then try to push the dealer below that price. Meanwhile, here are 10 cars that should top the list for shoppers looking for a good deal on a discontinued car:
1. Toyota Matrix
Starting price: about $17,000.Discontinuation date: unconfirmed.
Five-year residual value: 35%.
This cute and practical wagon isn't as trendy as the Honda Fit or as spacious as the Toyota RAV4. But it's comfortable and affordable, with a strong reliability record and gas mileage close to 30 mpg. Because it has been a popular car for years, the Matrix should remain appealing for a long time.
It's worth noting that the Pontiac Vibe is nearly identical to the Matrix; the two models are built on the same assembly line as part of a joint venture. And the Vibe is being discontinued as part of the Pontiac wind-down. But the Vibe's residual value -- 27% -- is lower than that of the Matrix because Pontiac has a weaker brand image than Toyota.
2. Toyota FJ Cruiser
Starting price: about $25,000.Discontinuation date: unconfirmed.
Five-year residual value: 33%.
Toyota's answer to the Jeep Wrangler has been a hit with off-roaders and beach bums, but the FJ Cruiser has never garnered the mainstream appeal Toyota sought. Still, this retro rambler boasts strong safety and reliability ratings, and its rugged looks have a kind of timeless appeal.
3. Honda S2000
Starting price: about $35,000.Discontinuation date: 2009.
Five-year residual value: 32%.
If you can find one of these roadsters, grab it. Honda stopped building the S2000 in mid-2009, and dealers would probably be completely sold out if not for the miserable economy. Those cars that are left will be labeled as 2009 models, because there is no 2010.
The S2000's design barely changed for 10 years, yet this finely engineered, rear-drive sports car continually wowed critics with its precise handling and thrilling acceleration. And the S2000's curves should wear as well as some of the classics.
