June 27th, 2009

General Motors, one of the world’s largest carmaking companies, has filed for bankruptcy with the American government. For generations General Motors (GM) has been one of the big three car manufacturers in America and one of the largest in the world. Now the car industry is on its knees, and of the three biggest car manufacturers in America two have already been forced to ask the government for protection from their creditors. But what difference will all this make to us?

Well, for UK consumers, it probably won’t make much difference. If you have a car that was made by GM, there’s no need to worry about the future of your car and any parts you may need, as the company is still in business and hasn’t ceased trading. With the financial protection of the US government, they hope to be through the worst of it in as little as three months. Further to this, the European branch of GM, which consists of the British brand Vauxhall and the German Opel, has already been sold off to a Canadian company who have said they will do all they can to protect the 5,500 UK jobs at stake.

For consumers looking to purchase a new car in times like these, it could well be that leasing or contract hire could be a better option than buying outright, as it gives you more freedom of choice and wouldn’t leave you in the lurch later if the manufacturer did go out of business. Certainly if you are worried about buying a car by one of the main manufacturers tied to one of the companies that is at risk such as Vauxhall or Ford, car leasing could put your mind at ease.

Whether you’re looking for a handy little car about town or a fancy new BMW, car leasing gives you a wider choice of vehicles including those that may otherwise have been out of your price range for buying outright. Your contract allows for your estimated mileage and normal wear and tear to the vehicle, so your car won’t decrease its financial value over the course of the contract and when your agreement ends you get to swap the car for the new model of your choice. With the car industry in such a state of disaster, it could be the best way to make sure you’re not affected by any future surprises!

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