By on July 8, 2011

At GM, Joel Ewanick and  Chris Perry need to repeat the miracles for which they became famous  at Hyundai. So what do you do in that case? “Let’s just do the same thing again.”

If GM would do a repeat of the Hyundai Assurance Plan (lose your job, return your car), with a 10 year warranty thrown in, the journos would snicker, but the cars would fly off the lot. But at GM, this would be too gutsy.  So what about the next best idea? That’s right: “Free insurance!”

Any driver from Oregon and Washington state who buys or leases a new GM “vehicle through Sept. 6 and titles the vehicle in either state will receive a free one-year automobile insurance policy from MetLife Auto & Home,” reports Automotive News [sub].

The insurance covers liability (up to 100,000 per person, and up to $300,000 per occurrence) and physical damage. The insurance come with Met Life’s new car replacement feature: If, in the first year or before 15,000 miles, are on the clock, the new vehicle is wrecked and not salvageable, MetLife Auto & Home will fix or replace the wrecked vehicle with a new one without factoring in depreciation. I ran a quick quote check for my 2011 Silverado C3500 Crewcab, and the program would save me $2100 a year. GM probably will pay less.

So why only Oregon and Washington? It’s a test. Cautious GM wants to see whether the insurance can move enough metal. They picked the toughest states. Oregonians and Washingtonians traditionally are GM adverse. If the program makes it there, it will make it anywhere.

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76 Comments on “Free Snoopy With Purchase Of GM Car (Limitations Apply)...”


  • avatar
    mike978

    You may be right that a 10 year warranty and an assurance plan is too gutsy for GM (and every other manufacturer other than Hyundai/Kia) but they are trying something new (for the US – free insurance by many manufacturers in the UK market is common). I would have thought this news could have been relayed without a POV.

    • 0 avatar
      geozinger

      H-K isn’t the only company to do the long warranty routine. VW had a ten year warranty back in the early 90′s when their North American business model just about dropped dead. IIRC, they only had it a couple of years and then quietly dropped it. I think it may have kept them from exiting the US back then, but it’s hard to say how big a difference it really made. I don’t think the cars were really up to standards (in terms of reliability and features) and VW really didn’t have the guts or finances to go with the program long-term.

      That’s where H-K makes a difference, even when their cars were crap (which wasn’t all that long ago), they were in it for the long run. It’s now paying off, you can’t deny that. Credit where credit is due.

      I think this is just another one of those “testing the waters” kinds of ideas, like selling cars on eBay and whatnot. I’ve been waiting for these genius ideas to come falling out of Ewanick’s head, but they haven’t shown up so far. I would tend agree with Buickman here, they can build the cars, they can cost control them, but it seems no one has any idea on how to sell them.

      While I’m not terribly impressed with Akerson, I’m really not impressed with Ewanick and Co.

    • 0 avatar
      Sinistermisterman

      The only reason many manufacturers offer free insurance in the UK is because insurance in the UK is DIRT CHEAP. My last brand new car in the UK cost me approximately US$500 a year (at today’s exchange rate) for fully comprehensive, unlimited mileage, commuting, no deductible, with my wife as a learner driver, parked on the street in a less than safe area – and I had a grand total of 3 years no claims. By comparison my insurance cost in BC is horrendous. Similar car, worse terms and my insurance cost is nearly $3000 a year. Insane.

  • avatar
    MikeAR

    Pardon me for being a bit cynical but it’s not really free. We taxpayers have paid for it. There is no such thing as a free lunch after all.

    • 0 avatar
      mike978

      Sorry to be pedantic but we taxpayers are not paying for it. It is baked into the price of cars they sell in those states as of now. The company is earning money and paying for this. Granted we helped GM back in 2009 and still own a minority stake.

      • 0 avatar
        MikeAR

        We bailed them out, the government owns a stake in the company, so yeah everything they do is costing me money. My tax dollars went to save them and pay interest on the debt created by the bailout. So to me anything GM does we paid for.

      • 0 avatar
        mike978

        Well you have a very odd accounting system – they can cover all expenses and return a profit to their shareholders. So nothing they do has a net cost to us.

    • 0 avatar
      HoldenSSVSE

      So I take it then you don’t do any banking with Chase, Bank of America, Citi, etc. etc. etc. No mortgage, no credit cards, no checking, no saving, no car loans no…

      We paid for it all too – and the architects of the financial meltdown that almost pulled down the GLOBAL car industry reward themselves with billions in bonuses – from our tax dollars.

      Two wrongs don’t make a right, but I want to make sure your outrage and view point is evenly spread. I for one closed my bank account with Chase and moved to a stable institution that didn’t take a hand out – I do have a credit card with BoA, so my concious is not perfectly clean.

  • avatar
    NN

    Bertel, you own a 2011 Silverado HD Crew Cab? For what? I’m pretty sure they don’t sell those in Beijing (although I did see a 90′s era F350 tow truck in Yunnan province back in the fall when I was there).

  • avatar
    Robbie

    The ten year warranty gimmick was a lot better than this one…

    • 0 avatar
      Patrickj

      The difference is that a 10 year warranty would cost GM real money.

      As a marketing gimmick to draw new clients to the insurance company, this may well be costing GM nothing. It costs me under $800 a year to insure a late model car as a long-haul commuter in an urban area. The insurance company has seen the odometer on my car and does know my commuting mileage.

      Met Life may consider this a reasonable price to build its auto insurance business.

      • 0 avatar
        Pch101

        As a marketing gimmick to draw new clients to the insurance company, this may well be costing GM nothing.

        That’s what I would guess. The main winner here would be the insurance company, especially if they can extend that customer’s policy beyond the first year and if they can get that customer to add other insurance coverage, such as homeowner’s insurance, to that original auto policy.

        They may see it as cheap marketing. Instead of fighting to get these customers, they get them for an initial period during which they get to try to keep them. It’s cheaper to keep an existing customer than it is to get a new one.

      • 0 avatar
        MarcKyle64

        It wouldn’t cost GM any more money to have a 10 year warranty than it already does. The service manager will just need to say ‘It’s your fault’ or ‘We cannot replicate the problem’ for a longer time.

      • 0 avatar
        mike978

        I don`t know if the insurance is costing GM any money – I would expect a small amount. The question is why haven`t other companies tried this before in the US?

      • 0 avatar
        Patrickj

        @MarcKyle
        While all car companies are VERY good at this, and GM is probably above average, the best they can do on denials and pretend fixes is probably about 60% of claims and 35 to 40% of cost.

        The most expensive tow-ins at low mileage are hard to deny, and sometimes fixing cars is cheaper than lemon law and arbitration claims. Not that customers ever win in arbitration, but running the system still costs money. They also need to avoid alienating their best repeat and fleet customers.

      • 0 avatar
        numa

        $800?!?!?!? Wow, I pay $60. Per year. And I drive a truck. I’m not old (32), do people REALLY pay that much for insurance? I can think of other things to do with nearly a THOUSAND dollars. I must be deeply out of touch or something.

      • 0 avatar
        unartisticinc

        To whomever pays “$60 per year” to insure their vehicle, many folks would be lucky to pay $800/year, or even $800/six months. If you think $1000 is the limit to make or break one’s vehicular ownership experience, then the answer is yes — you are deeply out of touch with purchasing, maintaining, and insuring an automobile.

      • 0 avatar
        numa

        I’ve spent $450 in repairs this year, and $350 in gas. so far. I own the truck outright, so, in my estimation $60 is reasonable for insurance. No, I don’t have collision, or comp, or any of that nonsense. I do have a house, and run a $5k deductible on that, so, since I have a home/auto policy I get a sizeable discount. I do all my own repairs, including my own body work, I only buy cars/trucks that I can get parts for used/cheap/or repops. My other vehicle is an SUV has a historic vehicle tag, making it immune to licensing fees, and inspections, forever. So, my auto costs are low, giving me money for more important things. My trucks decent looking, doing some floor pan repair right now, and next year I’ll have it repainted, and pop a new bed onto it. It’s a fast truck, that turns heads, sounds great, and has a brand new interior. I suppose I am out of touch with the ‘typical’ american auto consumer, but I sure sleep good at night.

      • 0 avatar
        Lumbergh21

        No way no how can you get vehicle insurance fro $60 per year. My wife and I have an 04 Mazda6, 95 Cobra, 58 Chevy truck, and 68 Mustang Coupe V8. No high end or even new cars. Neither of us has had a ticket in our lives (37 and 42) or an accident where our insurance has had to pay (I’ve been in two accidents that were 100% the other drivers fault and paid for by the other driver’s insurance), ~$1,700 per year for our car insurance alone (also have home owners insurance). Even the small riders on the classics which are driven less than 3k miles per year are over $100 per year. We did a lot of comparative shopping to get the lowest overall price.

      • 0 avatar
        numa

        I just checked it online, I pay $61 for my truck, and $64 for my wagoneer. I do have a flawless driving record, am married, no insurance claims of any kind in 7 years, they are old cars, a ’74 F100, and ’79 Wagoneer. The insurance co. doesn’t seem to care that the wagoneer is on super swampers and an 8″ lift. nor do they seem to care the F100 is hot cam 302 with a 4 bbl.

  • avatar
    200k-min

    I would argue Hyundai’s success is tied to making better, more desireable products, not sales gimmics. That said, this could work if it weren’t for the 100% probability they exclude the people that need *free* insurance. I’m sure the “limitations” exclude the high risk people that have 5 DUI’s on their records, etc. Personally I’d rather GM put $5k on the hood and let me shop my own insurance.

    • 0 avatar
      Philosophil

      I’d be interested in seeing the fine print as well. It’s an interesting gimmick nonetheless, but I personally would be more inspired by a longer warranty (which might be interpreted–rightly or wrongly–as an expression of the automaker’s confidence in the long-term reliability of their vehicles).

    • 0 avatar
      segfault

      Exactly. GM is doing this “bread and circus” incentive instead of putting meaningful incentives on the hood. Free insurance (for only a year) or free gas (for only a year) doesn’t really entice me.

      • 0 avatar
        MikeAR

        Actually for GM a meaningful incentive would be a $5k or better drop of their sticker prices across the board. They’re too high for the value of the vehicles. But GM isn’t alone in that, most everyone else is too.

      • 0 avatar
        psarhjinian

        I don’t think the sticker is really overly high. Profit margin at any mass-market car company hasn’t grown excessively (if it all) and selling for a lower price is what put GM behind the eight-ball the first time.

        Of course, you could also ask why wages, especially in the lower brackets, are eroding. You can thank trickle-up economics for that one.

      • 0 avatar
        MikeAR

        Psar, my personal opinion there. Stickers are high to me because I have to get a lot of crap I don’t want because of option packages, too many electronics, too big wheels and tires and so on. I’m not complaining about safety equipment either, just too complicated and unecessary climate control, nav systems, entertainment systems and the like. Most of that stuff has negative value to me.

      • 0 avatar
        Philosophil

        Mike, I agree about the overly expensive and complicated packages. They drive up the price and you’re often handcuffed into buying things you don’t want in order to get one thing that you do want.

      • 0 avatar
        psarhjinian

        Stickers are high to me because I have to get a lot of crap I don’t want because of option packages

        That allows the manufacturer to simplify production and procurement and probably keeps cost down more than anything else. Back when assembly was more bespoke it made sense to reduce cost through omission. Nowadays standardization is cheaper.

      • 0 avatar
        MikeAR

        Psar, I do realize that packages do simplify but the contents of those packages I just don’t like. I would proably pay up to an extent for the chance to order options a la carte but I would still save money on the total package. No infotainment system, no heated/cooled seats or steering wheel, no climate control, base model sound system, stuff like that. I forgot no leather too.

      • 0 avatar
        Philosophil

        That’s a good point, Psar.

      • 0 avatar
        Patrickj

        @MikeAR
        I don’t like the bundling of options. My wife requires a car with a power drivers seat because of physical limitations, no seat, no drive. The result of bundling is that the seat costs $5000 or so in most new cars, not the $500 to $1000 it would cost separately.

        Her auto shopping is basically driven by which vehicle has the power seat bundled with the least amount of crap.

    • 0 avatar
      Dr. Kenneth Noisewater

      I would argue Hyundai’s success is tied to making better, more desireable products, not sales gimmics.

      To be fair, having to warranty a car for 10 years gives a bit more emphasis on solid engineering as a cost-saving measure, since if you’re on the hook for 10 years of (expensive) mechanical failures you better get that s–t right in the engineering phase..

      • 0 avatar
        HoldenSSVSE

        For the record they only warranty the engine and transmission for 10 years, and then only parts of it. They do not warranty the whole car for 10 years, not even close.

  • avatar
    dave-the-rave

    In the pursuit of proper usage:

    “Oregonians and Washingtonians traditionally are GM adverse” should say “GM averse,” as in ‘having an aversion to GM products,’ probably caused by a previous adverse experience with said products.

  • avatar
    Domestic Hearse

    The InsurEE* is a variable, remember.

    *Not all drivers are the same. Your rate may vary.

    That being the case, I wonder what additional fine print you’ll find with GM’s free insurance offer? No moving violations, no accidents in the last five years, no arrest record, no one under the age of 25, no convictions of driving while impaired….

    Like a 0% APR offer, or super low lease rate offer, not all buyers/lessees are going to qualify for this offer, I’m sure. In fact, most won’t.

    • 0 avatar
      Pch101

      I wonder what additional fine print you’ll find with GM’s free insurance offer? No moving violations, no accidents in the last five years, no arrest record, no one under the age of 25, no convictions of driving while impaired…

      Much to my surprise, there are no exclusions. If you can swing the purchase, you get the insurance.

      Also to my surprise, GM does seem to be paying something for it.

      Customers may be asked to provide personal information to MetLife Auto & Home, in order to enable it to rate their policies, so it can dispatch a bill to the auto manufacturer. MetLife Auto & Home may use information provided by Consumer Reporting Agencies, such as credit, driving record and claim history. This information gathering process does not impact the customer’s eligibility for the program, as coverage is issued to all eligible purchasers of qualifying automobiles who are licensed residents of Oregon or Washington

      http://www.gm.com/content/dam/public/chevyinsurancebreak/?evar25=ch_metlife_lp_terms

      The coverage is pretty light, so I would imagine that MetLife sees this as an upsell opportunity.

      A couple of seconds of Googling indicates that GM already has insurance business through MetLife, so GM probably isn’t paying that much.

      And I’m going to guess that MetLife is going to drop the customers with bad driving records like a bad habit as soon as that year is up, while it’s going to be marketing itself heavily to the rest.

      • 0 avatar
        mike978

        Very interesting and I was wrong as I thought they would exclude people with very bad records. I wonder what are eligible vehicles. I assume some of the high performance stuff (Camaro ZL1, Corvette etc) would be excluded.

        There will no doubt be some on here who first complained that “Gm will have loads of exclusions and exceptions, so it must be a gimmick” who will turn on a dime now and say “GM has become the manufacturer for drunks etc”. Damned if they do, damned if they don`t. I just want consistency and not some reflex reaction.

      • 0 avatar
        CJinSD

        mike978,

        “I just want consistency and not some reflex reaction.”

        You might want to consider that you just turned on a dime yourself.

        “Lets get real. Of course there will be exclusions and exceptions. There always are in these circumstances. So people with criminal offenses won`t get it, nor will a 21 year old with a Corvette. However this is meant for the “normal buyer” – someone buying a normal car – Cruze, Malibu etc (not Corvette or CTS-V) and for the normal driver without a criminal record (maybe 1-2 speeding offenses but that would be all). What is the issue?”

        Spin baby, spin!

      • 0 avatar
        mike978

        CJ – I think you are mistaken.

        I thought, wrongly as it turns out, that there would be some exclusion. Now we don`t know yet what “eligible” cars actually means but this is more comprehensive than I or many others on here thought. Good for GM. I was owning up to a mistake and once data had come in I admitted my original thoughts were wrong – not many people do that on here.

        With regards to my comment about consistency consider this thought experiment – company A offers some marketing program (say free insurance, or return the car within a year if you lose your job) and commentators on here say “great idea”. Now company B offers something similar or the same and those same commentators say “gimmick, bad idea”. My beef is with those who would have been saying if Toyota or some other company (other than GM or Chrysler) had offered this free insurance program what a wonderful idea. Clarified for you?

      • 0 avatar
        CJinSD

        I’m not mistaken. I pointed out that GM was setting themselves up to be the autosupplier of people with bad driving records and you said don’t be ridiculous. You presented expected restrictions as a good thing. Now you’re saying that lack of restrictions is a good thing. That is spinning, not being honest in any way shape or form.

        Free insurance has been tried before. I think it was Mazda, concerned that high insurance rates were deterring sales. They rolled out the program with quite a bit of media hype, and then it quietly disappeared as soon as they realized that car insurance companies know their business. It has been some years since they tried this, I believe it was towards the end of first generation Miata production. I can’t find anything about it on-line, but I remember the program because I was interested at the time.

      • 0 avatar
        Pch101

        I wonder what are eligible vehicles. I assume some of the high performance stuff (Camaro ZL1, Corvette etc) would be excluded.

        I would expect that as well. An insurance company wouldn’t want the obligation to cover those kinds of cars without also underwriting the driver.

        I pointed out that GM was setting themselves up to be the autosupplier of people with bad driving records

        While I doubt that it would be some sort of significant game changer for the accident prone residents of Washington and Oregon, you may have a point. The hot part of the auto loan market today is the subprime market, and credit scores often correlate with driving records, so you’d expect the driving records to get worse as the buyer pool expands. If sales are going to increase, they’re probably going to come from reaching out to the subprime market.

        Meanwhile, Ally is planning on an IPO. This may also be seen as a roundabout way to generate more business on the finance side, not just for MetLife.

  • avatar
    Jellodyne

    If it’s from Met Life it’s probably crooked. When they ran my company’s 401k they didn’t offer the standard mutual funds you see most other places, instead they ran their own in house funds, with similar investments but way higher costs than standard funds. Their index fund had a load around 1%. Basically, an index fund which should have basically no management costs and only a fraction of a percentage of costs associated with buying/selling shares, except theirs also had a cost associated with Met Life putting their hand in my pocket and taking my retirement savings for themselves.

    • 0 avatar
      MikeAR

      A load of 1% on an index fund? That is criminal. How did they get away with that and more importantly who at your company thought that was a good idea?

  • avatar
    Zackman

    I’ve heard unsubstantiated horror stories about how Hyundai tries to finagle themselves out of honoring that “golden” warranty. One case I do know of is of my wife’s friend having serious issues with her Sonata several years back and could not get it fixed properly and got the runaround until she had enough and got rid of it and bought something else – not a Hyundai.

    Gimmicks cost a manufacturer time and money – maybe more so than simply lowering the price to whatever it takes to make the deal – it’ll vary with each customer. That seems to be the way to go. Cash on the hood is good, too. Cash on the hood along with either a supplier discount (me) or an A Plan is even better! Maybe I can score one of those next time if I know someone.

    • 0 avatar
      segfault

      “One case I do know of is of my wife’s friend having serious issues with her Sonata several years back and could not get it fixed properly and got the runaround until she had enough and got rid of it and bought something else…”

      GM pretty much did that with my G6, in the first 10,000 miles, but after much wrangling, they ended up buying it back under the lemon law. I didn’t replace it with a GM vehicle. The customer isn’t always right at GM, either, and after all of the paperwork I sent them that they claim to have lost, I completely understand why they went bankrupt.

    • 0 avatar
      gslippy

      I had a similar experience with a Honda. I really think this behavior is dealer-dependent, not brand-dependent.

      The aggregate quality of Hyundai/Kia must be good enough for them to keep offering the 10/100 warranty. Heck, even the 5/60 warranty I got on a second-hand Kia was better than many OEM warranties.

      And remember that H/K is very profitable while offering this warranty at segment-leading prices (and unionized in Korea).

  • avatar
    JMII

    This is actually not a bad idea, for plenty of people insurance is huge barrier to car purchases. Of course these same people really shouldn’t be looking at buying a NEW car. However the real question is what happens when the “free” policy runs out? Wonder if a ‘Vette or V8 Camaro is covered?

  • avatar
    Syke

    If GM did the 10/100,000 warranty, then everyone here would just start complaining that, “they’re just copying Hyundai.” (Gotta keep complaining about GM, you know.)

    This is something very different for the US, sounds like a good idea. Yes, the devil is in the details. Where this could help sales is in the late teens/early 20′s market (assuming they’re employed with decent credit). Insurance costs are usually killer for this crowd.

    Conceivably, this could make a new car less expensive for the younger crowd than a late model used car.

    • 0 avatar
      MikeAR

      Again, insurance will be a problem after the first year. Probably the buyers finances won’t be changed that much.

      • 0 avatar
        Syke

        At which point, that’s the buyer’s problem. And yes, I’d expect him to be able to figure that out in advance. If he’s smart enough to take the first year’s free insurance and spend that time saving up towards the second year (and more) it’d be worthwhile. Unfortunately, that predisposes someone to be intelligent enough to save in advance – something that’s become a lost art anymore.

        The purpose of this promotion is to get potential customers into the showrooms in a very GM-adverse area. Absolutely nothing more. To expect it to be more than that is to determined to call the promotion a failure. As long as the terms and limitations are clearly laid out, what’s the complaint?

      • 0 avatar
        mike978

        But this works in other markets like the UK, where getting insurance in your own name is very expensive for a young person but as they build up no claims bonus (assuming no accidents) then subsequent years are cheaper.

    • 0 avatar
      HoldenSSVSE

      And take it a step forward, no one even posts that GM already offers a 5/100 warranty. Here is a link to Hyundai’s warranty:

      http://www.hyundaiusa.com/assurance/america-best-warranty.aspx

      GM covers more components in their 5/100 power train warranty. No one, not even Lexus offers 100K miles on power train.

      GM covers EVERYTHING bumper-to-bumper, even the tires in their 3/36 warranty. Hyundai does not (long list of exceptions included in the above link). Also, the 5/100 warranty from Hyundai does NOT transfer to the second owner (read it yourself). It goes away – the GM 5/100 warranty does transfer to the second owner.

      GM has already put a world class industry leading warranty on their car. Shifting from 5/100 to 10/100 on power train is rather hollow, as the average driver goes about 13K to 15K miles a year – meaning in reality with the 100K mile cap, the Hyundai warranty only provides a 7 year window for the average driver.

      Smoke and mirrors – the only company that even comes close to the GM level of warranty coverage is Hyundai/Kia – no one else comes close.

      • 0 avatar
        gslippy

        The Hyundai/Kia 10/100 warranty does not ‘go away’ for second owners. It converts to 5/60; I have a second-hand Kia.

        If shifting from 5/100 to 10/100 for the drivetrain is ‘rather hollow’ as you put it, why doesn’t GM just do it? Here’s why: A car driven exactly 100k in 5 years is doing a lot of highway driving, which is easy on a car. The car driven 100k in 10 years is doing more commuting – a much more demanding application. So I’d say the 10/100 offering from H/K is more meaningful, particularly to those not reading the fine print.

      • 0 avatar
        HoldenSSVSE

        Although we could play the what if game all day long, and you do bring up a valid point that not all cars go the average 13K to 15K miles a year, most cars will break 100K miles before they see 10 years on th road. It is a well established car ownership statistic here in the United States. It is used when calculating leases (which generally are 12K miles a year), it used when calculating resale value and trade-in (generally you take a hit in resale if you exceed 15K miles a year, and you get a bonus in resale if you drive less than 10K miles a year). It isn’t some magical number I brought up in the defense of GM, or to besmudge Hyundai. This is really North American car usage 101, and if we’re going to look at the whole, wouldn’t you agree that using the average makes more sense that looking at outliers?

        Number of miles driven has very little to do with what type of driving its doing. Every owner’s manual in every car sold in North America has a section that describes severe service. Severe service is not described as driving at 30 MPH on urban, suburban, or rural roads doing grocery getting duty, going to church, and taking the kids to soccer. If anything, you’re arguing that the easiest type of driving on a car is actually, the hardest.

  • avatar
    Boff

    Only $100K-$300K liability? That would hardly cover pain and suffering from a parking lot door ding. Then again, I recall this story from when my wife was shopping for insurance in California (she had to buy from a fellow in a back alley as she was only moving there from Canada for 3 years to do a post-doc). She asked the man: “is this enough liability coverage?” He replied: “Sugar, if you hit someone in this state, no insurance will ever be enough”.

  • avatar
    Scoutdude

    While I can’t comment about Oregon people int Washington are not averse to GM products. Up until gas prices made their first run at $4 gallon the Tahoe was THE family rig around here. On the other hand I’ve still only seen one Cruze in the wild and I’m not seeing them in the rail yard either.

  • avatar
    Domestic Hearse

    Where this offer gets interesting for the buyer is AFTER the first year.

    You, the buyer, will have to have a different insurance policy lined up the moment the free policy lapses. Or make arrangements to continue on with Snoopy under a new policy.

    Many won’t.

    And for all those that do not, yet still have a balance on their vehicle, it’ll go like this….

    GM/Snoopy will continue the policy, because GM will want that asset covered (I’m assuming GM will be writing most/all the finance paper to go along with the free insurance offer).

    These insurance charges will come out of the monthly car payment each “lapsed” insurance customer sends in. Any money left over, after Snoopy takes his cut, will be applied toward the vehicle balance. Of course, there won’t be much, which means the customer is paying down their loan much slower than required, and interest on the loan will compound.

    Of course, most of these consumers will feel like they’re skating on buying insurance, till they learn, come trade-in time, or after their last payment, that there’s a whole bunch more payments to make.

    Surprise!

    • 0 avatar
      mike978

      I find the argument of “what happens after a year” to be fatuous since drivers now need to get insurance and many change from one year to another (or why do companies bother advertising). Most car companies give 3 years free breakdown service, I could ask “what happens in year 4?”. I know car breakdown service is not mandatory whereas insurance is. However people should be aware enough that as the one year mark comes around they phone or use the internet and see if a better offer is out there – it is called personal responsibility and capitalism. Or do they go out of the window if GM is behind a scheme?

      Will it work – I don`t know. Nor I suspect fully does GM. Is it worth a try, yes.

  • avatar
    newfdawg

    GM’s plan may attract some suckers with the promise of free insurance for a year, but I wonder how many will have DWIs, tickets and accidents in their driving records… I would like to see the fine print in the insurance contract.

    If GM wants to attract new buyers, they should try building better automobiles. A 10 year 100,000 mile warranty along the lines of what Hyundai offered several years ago would seem like a more attractive offer. My guess is the potential costs scared them away from that strategy.

    • 0 avatar
      CJinSD

      Two good points. My next door neighbor’s cousin has a bad driving record and An Audi S4 or RS4, I forget which and he’s usually driving a dealer courtesy car anyway. His car insurance is close to a thousand dollars a month, roughly equal to his car payment. GM could become the official ride of the drunk driver.

      I read a Canadian auto buyer’s guide called Lemon-Aid recently. Sadly, I don’t have the book available to me now. The author, Phil Edmonston mentioned that GM had to include their true warranty costs for a year in their financial filings, I forget if it was bankruptcy or IPO disclosure. They paid out in the billions for defects in 2007. I’ll probably find the book and zerox the page. The basic conclusion was that Detroit quality improvement comes from better managing the media, and quality actually got worse in the period when it supposedly turned around overnight.

    • 0 avatar
      mike978

      Lets get real. Of course there will be exclusions and exceptions. There always are in these circumstances. So people with criminal offenses won`t get it, nor will a 21 year old with a Corvette. However this is meant for the “normal buyer” – someone buying a normal car – Cruze, Malibu etc (not Corvette or CTS-V) and for the normal driver without a criminal record (maybe 1-2 speeding offenses but that would be all). What is the issue?

      I completely agree with longer warranties. I ask this question on here a few months ago. Most manufacturers in the US offer a 3 year /36,000 mile warranty when in the UK they offer a 3 year / 60,000 mile warranty. Toyota, Honda, Chevrolet, Ford and others. So it should, in this age of cross Atlantic cars (Fiesta, Focus etc), be possible to easily and cheaply extend warranties.

      • 0 avatar
        HoldenSSVSE

        GM offers a 5/100 warranty in the US, they have for years. Right from the Chevrolet website:

        Every 2011 Chevy passenger car, light-duty truck, SUV and crossover comes with a 100,000 mile/5-year (whichever comes first) transferable Powertrain Limited Warranty. Plus, you get the 100,000 mile/5-year (whichever comes first) 24/7 Roadside Assistance and Courtesy Transportation Programs and much more. See dealer for details.
        NEW VEHICLE LIMITED WARRANTY
        GM vehicles registered in the U.S.A. are covered for 3 years/36,000 miles (whichever comes first). The complete vehicle is covered — including tires, towing to your nearest Chevrolet dealership and cosmetic corrosion resulting from defects. Repairs will be made to correct any vehicle defect, and most warranty repairs will be made at no charge. In addition, rust-through corrosion will be covered for 6 years/100,000 miles (whichever comes first). Powertrain components will be covered for 100,000 miles/5 years (whichever comes first). See dealer for details.

        They already offer the best domestic warranty, they offer the second best warranty in the industry behind Kia/Hyundai.

      • 0 avatar
        mike978

        Holden – I should have clarified, I meant bumper to bumper. So the fully comprehensive warranty, not just the powertrain.

    • 0 avatar
      HoldenSSVSE

      Gee, Toyota runs add for suckers with bad credit that they’ll get a 0% car loan along with the cash on the hood.

      It is pretty much that offers for insurance, protection, interest rates, etc. are going to be tied to a persons history and level of responsibility.

      If you have DUI’s under your belt and think you’ll get insurance through this program, clearly you’re working on your 6th duece.

  • avatar

    I could easily increase sales by half a million units and reduce the marketing costs but GM refuses to listen. they are pompous, egotistical, and naive. nothing has changed.

  • avatar
    HoldenSSVSE

    But isn’t Hyundai/Kia 10/100 warranty policy a gimick in itself. The average car is driven 13K to 15K miles a year. If I split the difference at 14K miles a year the Hyundai is really offering a 7 year warranty.

    GM already offers a 5/100 warranty; if I was a customer and saw them go to 10/100 I would go, “so what, you gave me more years – I care about mileage.”

    All depends on how many miles a year you drive, now a 10/150 warranty would really up the ante, but I really don’t know any car manufacturer that would stick their neck out for 150K miles.

  • avatar
    Zackman

    I have no idea if this will work or not. I do know that I hate Snoopy and the whole “Peanuts” comic strip. Always have.

  • avatar
    toxicroach

    Ehhh. I don’t like this promotion. First of all, it’s only really worth maybe 700 bucks. Hardly enough to really induce anyone to buy a GM product. So it really doesn’t do much for the numerically literate and/or people who don’t have super high premiums because of a bad driving history.

    Second, and maybe this is just me being a classist prick or something, but the insurance policy (which at a 100,000 per person cap is only for the judgement proof) just seems to reinforce the brand as the place you go when your only criteria is a low monthly cost.

    If all cars will easily run 150,000 to 200,000, why would a 10 year warranty on major components be a problem? Seems like every brand should be able to match that warranty without too much trouble.


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