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Q: If I buy a vehicle from a car company that goes under, what happens?

Michael says...
That depends on how they go under: bankruptcy, an all-out sale or liquidation. But it also depends on the fiscal relationship between Washington and the Detroit-based automakers. Chrysler and GM are the closest to the financial cliff (likely in that order), but neither is discussing the scenarios publicly, at least not at press time. Before GM received billions in bailout funds from the U.S. and Canadian governments, (former) GM CEO Rick Wagoner told the Wall Street Journal that one of the prime reasons bankruptcy was not an option was that people buying a new vehicle expect a long-term level of support and service. This implies that GM realizes there would be warranty issues arising out of bankruptcy and possible safety/recall problems as well. The best advice is to be wary and consider the financial health of your prospective car manufacturer before you lay down your cash.

Michael Bettencourt test drives more than 100 new vehicles a year and is a member of the Automobile Journalists Association of Canada. Send him your car questions here.