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GM Boosts Incentives for Saturn and Pontiac Dealers

Posted: Dec 30, 2009 10:26 a.m.

If you’re in the market for a new Saturn or Pontiac, now may the best (and last) time to buy one. General Motors is doing everything it can to move inventory off dealer lots for the two discontinued brands. Now, they’re paying dealers $7,000 for every new Saturn or Pontiac vehicle they move to rental-vehicle or service-vehicle fleets.

The incentive is a tool to help dealers reduce their inventories as GM prepares to liquidate the two brands – but it’s also a great incentive for buyers. Once the new cars are in dealers’ fleets, they can sell them as “used” and pass on some or all of the savings to consumers.

“If a dealer passes along all the new incentive to a customer, Pontiac's cheapest vehicle, the G3 compact, could go for about $8,000, or 46% off the sticker price of about $15,000,” the Wall Street Journal explains.

Autoblog adds, “[H]ow many new cars can you buy for $8,000 outside of India? A more compelling deal could be $7,000 off the price of a Saturn Astra. Getting a brand-new Astra with tons of options and a $13,000 price tag could be considered a steal.”

Dealers have until January 4 to take advantage of the program. However, they’ll be able to sell the cars to consumers as long as they have inventory left on lots. The Wall Street Journal reports, “At the beginning of December GM dealers had 14,500 new Pontiacs and Saturns on their lots, which typically represents about two to three months of inventory depending on the model.”

But the offer presents buyers with some risks. Though the cars are essentially new, USA Today says that anyone financing them may have higher interest rates than expected because they will be sold as used -- “lenders typically demand a higher down payment and higher interest rate for loans on used vehicles.” In addition, the Journal says resale value could also be affected since the brands are being discontinued.

However, buying one of these “used” models doesn’t come with too many drawbacks. The vehicles will still come with full warranties, and receive service at other GM dealerships.

Note that GM has a concurrent offer going on new Saturns and Pontiacs. Until January 4, they’re offering buyers $6,500 cash back or zero-percent financing for 72 months. However, the Journal says these offers “can't be combined with the $7,000-a-vehicle incentive GM is giving dealers.” So, buyers will have to decide which course of action makes the most sense for them and where the best price can be found

See how Pontiac and Saturn models fare in our rankings. Plus, check out the U.S. News rankings of this year's best cars as well as this month's best car deals.