What happens if car manufacturers file for bankruptcy?

By Michelle Carolla
WBTW Reporter/Anchor
Published: December 10, 2008

With the problems the big three automakers are experiencing. Consumers want to know what happens if the automakers file for bankruptcy?  Could you still find parts or keep your warranty?  To combat the down market dealerships are offering huge incentives to buy a car.  But are consumers confident the manufacturers will be in business in 2009?
    Barbara Plaxco of Myrtle Beach said she rarely buys a new car, but she couldn’t pass up the deal. She bought a $28,000 dollar car for $14,000, that included her trade-in. “Usually I keep them until I die,” said Plaxco. “It just happens in this particular set of circumstances, it was a very good opportunity at this point.”
Plaxco’s deal is representative of the deals available everywhere. Manufacturers know they must sell cars right now so they’re passing the incentives to the dealers. Both know if they can capture a customer, they can most likely keep them for service and future sales.
  But what happens if a manufacturer filed for bankruptcy? Russ Boykin is the General Manager for Hyatt Pontiac, Buick, GMC in Myrtle Beach. He said “We’ve seen manufacturers in the past in the U.S. that have exited the country. A few years ago, Oldsmobile went away with GM. It carried forward from a production point of view and a warranty point of view, just as though they were still here.“ Boykin said the parts and sales are separate so parts should be available. Warranties should also stay in place.
Boykin said the incentives are working. December is going very well. Traditionally, December is the busiest time of year for auto dealers. Both dealers and manufacturers are hoping for as many sales as possible to take them out of 2008.
One problem with bankruptcy is the trade-in value could fall.  Dealers may not be as willing to take in a car from a closed manufacturer.  So far, it looks like the big three will get their bailout.  So it could just be the time to get a super deal on a car.  Only time will tell for the auto industry.