GM Expects 1% Return Rate on 60-Day Satisfaction Guarantee

Robert Farago
by Robert Farago

In three day’s time, General Motors customers can (may?) buy a new car from any of the nationalized automaker’s four remaining brands safe in the knowledge that they can (may?) return the car for a full refund. The exact details of the deal will hit GM stores this weekend. While we await a look at the fine print (a.k.a. “other restrictions”), I called up GM to get as much inside dope as I could snort. GM’s Director of Communications for Vehicle Sales, Service and Marketing, Pete Ternes, told me dissatisfied car owners can return their GM whip between 30 and 60 days after purchase, as long as the customer doesn’t damage the car or put more than 4k on the odo. The refund covers the purchase price and sales tax and . . . that’s it. If you’ve got negative equity rolled into the deal, you’re still on the hook to the finance company. If you go for any dealer add-ons, kiss that cash goodbye. This much we knew from the press release. Here’s the new bit: GM has budgeted for a three percent return rate, although Ternes says New GM expects the number of bounce-backs to be “one percent or lower.” So, what happens to the car and who pays for the depreciation?

“The vehicle then becomes a used car,” Ternes told me. “The dealer buys it back at a pro-rated price. Our insurance company [ Cynosure] covers the difference between the new and used price. That’s what the $500 discount, which the customer can take in place of the guarantee, is for.”

So, anyway, what’s the point of this thing?

“It’s designed to close the perception gap,” Ternes revealed. “The difference between the customer’s perception of GM vehicles’ quality and performance and the reality.”

Ternes said GM had considered other incentive programs to move the metal post-Cash for Clunkers (e.g., the return of 24-hour test drives). One main reason they chose the 60-day guarantee: it reflects Chairman of the Board Ed Whitacre’s personal feelings, his revelation, if you will, about GM products. When I pointed out that Whitacre had publicly declared, “I know nothing about cars,” Ternes terse reply: “Most consumers are the same way.”

Ternes meant that in the nicest possible way, but is there a nice way to say your customers don’t know from cars? I don’t think so.

Robert Farago
Robert Farago

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  • Anonymous Anonymous on Sep 12, 2009

    "There’s no way that the dealer can keep a trade around, just waiting for the 60 day grace period to expire." Trade in to dealer is unaffected.

  • Adamphillips411 Adamphillips411 on Dec 15, 2009

    Bought a car found out it did not handle well in the snow so I thought well I have 60 days I will go get somthing else...NO not that easy. When I was signing the papers a INCENTIVE was brought to me of $500.00 off my purchase price if I would not bring it back within the 60 days. I thought ok and if I take it back I will have to repay the $500.00. The catch is that if you sign that $500.00 gift then you WAIVE your right to return the vehicle in 60 days which was never mentioned to me nice smoke and mirrors. Both the dealer and GM basicly laughed and said too bad so this will be my last dealing with Government Motors (GM).

  • ChristianWimmer The interior might be well-made, but the design is just hideous in my opinion. It’s to busy and there’s no simplistic harmony visible in it. In fact I feel that the nicest Lexus interior ever could be found in the original LS400 - because it was rather minimalistic, had pleasing lines and didn’t try to hard. It looked just right. All Lexus interiors which came after it just had bizarre styling cues and “tried to hard” if you know what I mean.
  • THX1136 As a couple of folks have mentioned wasn't this an issue with the DeLorean? I seem to recall that it was claimed you could do a 'minor' buff of the surface and it would be good as new. Guess I don't see why it's a big deal if it can be so easily rectified. Won't be any different than getting out and waxing the car every so often - part of ownership, eh.
  • ToolGuy This kind of thing might be interesting in a racing simulator.
  • FreedMike Hmmm, electric powered vibrations. Is this the long rumored move into products market?
  • MrIcky /Checks date on his calendar- nope, not April 1st.I have a transducer in my home theater seat for sub-bass. Not sure if this is patent worthy.