Doubts over Saab warranties

  • North American Saab warranties cease
  • Same warranty woes could hit the UK
  • End of the road for 74-year-old company

Troubled Swedish manufacturer, Saab, has filed for bankruptcy and now there are doubts about the availability of warranties on unsold stock as a result.

According to a leaked memo to Saab dealers obtained by motoring website Autoblog, the car maker is ceasing all warranty coverage on its vehicles in North America, which has prompted fears the same action will be taken in UK dealerships.

The latest events are likely to mark the end of the 74-year-old company and that points to more potential problems for existing Saab owners.

However, it could mirror the collapse of MG Rover where dealerships covered affected cars with third-party warranties or paid for any repairs that were necessary. It also helps that many Saab dealerships are multi-franchise branches and will remain open and still be in a position to service cars.

Parts and spares supply should remain unaffected as many components are shared with other General Motors products, and specialist suppliers will refurbish or remanufacturer those parts that are no longer available.

Initially, new and used values could be hit hard as a result of this announcement. However, similar to MG Rover's collapse, residual values will most likely settle down after several months. Saab has been struggling for some time now and this most recent news is not entirely unexpected.

Although production has ceased, there will still be new cars available at dealers and brokers for a time. Even before the announcement substantial discounts were available on the entire Saab range. Customers shouldn't expect further considerable discounts initially, although individual dealers may later cut prices hard to clear out ageing stock. 

Existing Saab customers in the UK can contact Saab GB on 0845 300 9593 or visit Saab's website for more details.

The impending demise of Saab is the culmination of a long-running saga that has many twists and turns and parent company, Swedish Automobile N.V, does not expect to realise any value from its shares in Saab, and will write off its interest in the company completely.

General Motors, a preferential shareholder in Saab and supplier of much of its technology, announced that it would not continue to licence its technology after the sale. This was over fears of harming its own sales in China.

A potential deal with a Chinese company, Zhejiang Youngman Lotus, has collapsed as a result.

Saab’s board subsequently decided that continued efforts to sustain and reorganise the company were not in the best interests of its creditors. Saab's production effectively stopped in March this year, and since then it has been struggling to pay its bills and wages.