Customer Care: Whose Problem Is It Anyway?

Michael Karesh
by Michael Karesh

Three years ago I suggested that Detroit win back car buyers by doing something no one seemed to be doing: provide customer care deserving of the name. In a similar vein, Steve Lang recently asked readers whether manufacturers or the government should do more when a model commonly suffers from an expensive problem. Well, according to an article in Automotive News this week GM has strongly encouraged its dealers to pick up the tab on more out-of-warranty repairs to reward and create loyalty.

According to the article, the bottleneck hasn’t been GM—the customer care money has been there, but dealers have been too tight with it because of fears that GM would punish them if they spent it. Why did dealers have these fears in the first place? The article doesn’t say. The important thing isn’t how these fears came to exist, but that they’re currently unwarranted. One dealer calls the new “open pocketbook” approach to keeping customers happy a “seismic shift.” Problem solved?

Not so fast. Steve and I identified the problem: people are worried about having to pay big money because of faulty engineering or manufacturing on the part of the manufacturer. The solution I proposed: clearly state that repair costs will be covered whenever a problem reaches a certain threshold. I suggested two such thresholds, 10 percent before 100,000 miles and 20 percent before 120,000 miles (which is how far most people seem to now expect a car to go without expensive repairs). The specifics aren’t critical. They can be sorted out by market researchers and actuaries based on how common a problem has to become before it achieve “they all do that” status. (My latest, not yet expensive personal example: the aluminum hood on my 40,000-mile 2008 Ford Taurus X is corroding. I drop by the Ford dealer, and it turns out “they all do that, Expeditions too. To help we’ll refinish it at cost, $300.”) The key condition: the manufacturer would provide owners with complete confidence that they wouldn’t be stuck with the cost of fixing expensive common problems.

GM’s latest policy does not do this. Instead, it seems very similar to “customer care” as it has existed for years, though possibly with better odds. As before, it’s up to the dealer to decide whether or not a particular customer deserves the care. Didn’t buy the car new from them, or didn’t have all maintenance performed in their shop? Then you might be no more likely to receive “assistance” than you were before. This is what the article means about “rewarding loyalty.” The flipside is “punishing disloyalty.”

Nowhere does it say that GM is providing the care because they made a mistake at any point. In fact, the article strongly implies the opposite. Two cases are described. In one, a Chevrolet dealer covered the cost of replacing the door hinge on a ten-year-old pickup with 317,000 miles. In the other, the dealer picked up the cost of fixing a wheel that had suffered damage from an impact. These two cases share critical similarities, probably not by happenstance. In both GM was clearly NOT at fault. GM made no mistake. In both cases no reasonable customer would expect GM to pay for anything. GM did them a favor. Later they can return the favor by buying another GM car from this dealer.

Not mentioned: the Saturn VUE owners highlighted yesterday. Or, to give a more recent example, the Lambda crossover owners that have had to deal with persistent water leaks (though, to GM’s credit, it has bought back many affected vehicles). The problem Steve and I raised—common expensive repairs due to a fault in how the car was engineered or manufactured—is ignored. Addressing this problem would require that GM admit that it occasionally makes mistakes. And, for legal or other reasons, it’s still not willing to do this. No car manufacturer is.

I can see how the new policy, since it intensifies the traditional “you scratch my back, I’ll scratch your back” game, might further encourage people to get all of their service work done at dealerships. And it might help GM retain some existing customers who would otherwise defect to the manufacturer. But it won’t do much to help GM gain new customers. People who aren’t on close terms with a dealer have every reason to remain as wary of GM (and other manufacturers) as they have been. Without a clearly stated out-of-warranty assistance policy, one that doesn’t rely on the dealer to arbitrarily decide on a case-by-case basis who gets help and who does not, car owners could, and likely will, continue to get badly burned by the thousands.

Michael Karesh
Michael Karesh

Michael Karesh lives in West Bloomfield, Michigan, with his wife and three children. In 2003 he received a Ph.D. from the University of Chicago. While in Chicago he worked at the National Opinion Research Center, a leader in the field of survey research. For his doctoral thesis, he spent a year-and-a-half inside an automaker studying how and how well it understood consumers when developing new products. While pursuing the degree he taught consumer behavior and product development at Oakland University. Since 1999, he has contributed auto reviews to Epinions, where he is currently one of two people in charge of the autos section. Since earning the degree he has continued to care for his children (school, gymnastics, tae-kwan-do...) and write reviews for Epinions and, more recently, The Truth About Cars while developing TrueDelta, a vehicle reliability and price comparison site.

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  • JustPassinThru JustPassinThru on Oct 06, 2011

    I'll just add to this: My mother, in her later years, became a Toyota customer for life for exactly this reason: the company going above and beyond to make good on a customer problem. In her case, it was a starter failure...misaligned at the factory, stripped the ring gear on the flywheel. This on a Gen-1 Camry. She had it towed to the dealer, expecting a large repair bill; and nearly needed an ambulance when the dealer (a local chain which wasn't known for above-average ethics) informed her that the repair was free, covered by Toyota even though the car was out of warranty. This kind of how-may-we-help-you service is what's made Toyota the leader, while selling unexciting cars at high prices. They deliver raw value, both the product and the company itself.

    • Carbiz Carbiz on Oct 07, 2011

      Today's vehicles are far too complex for the typical layperson to work on. Most import owners would never try. Believe me, the easiest sale is to an irate customer from a competitor. Even as you listen to their story and realize that it is they who are wrong, sympathetic words and appropriate nodding of the head will guarantee a new client, and since your latest offering is better than the 5,6 or 10 year old vehicle your client was driving from the competition (just by virtue of it being newer!), only an idiot could screw up a client like that. Sounds like your Mother got lucky. Another thing I noticed in the industry was that women got treated better at the import stores. The import stores were newer and tended to have younger staff. The Big 3 were populated by a lot of old dinosaurs. Since the shake out in the industry, a lot of that has changed. Many of the old dinosaurs got out of the business, or were forced out.

  • Zykotec Zykotec on Oct 07, 2011

    I would think it's in any manufacturers own interest to keep their customers as happy as possible to keep them coming back, not to mention the advertising effect of a broken down or trashed car with their badge on it. And listening to customers and spending money on beyond-warranty repairs will eventually force them to make better cars. Kia's whole advertising program in Norway is simply saying they have a 7 year warranty. That's it :P

    • See 2 previous
    • Dave W Dave W on Oct 12, 2011

      My Elantra had the check engine light come on at 81,000 miles. brought it in, there was a cracked flexpipe causing the light to come on. The service person said no problem, 10/100 warranty and all. Came back to get the car the next day and was told it was all fixed, by the way that will be $1500. It seems they replaced everything from the header back, which is not considered an engine part and the emissions warranty that would've covered it expires at 80,000 miles. In the end I had them put the old system back on and paid a local shop $50 to weld in a new flex section.

  • Lorenzo Subaru had the ideal wagon - in 1995. The Legacy Outback was a straight two-box design with rear quarter and back windows you could see out of, and was available in brown with a 5-speed manual, as God and TTAC commenters intended. It's nice they're not raising prices, but when you've lost the plot, does it matter?
  • Bkojote Remember a month a go when Cleveland wanted to create a more walkable Cleveland and TTAC's 'BIG GOVERNMENT IS THE PROBLEM' dumbest and dullest all collectively crapped their diapers? Here's the thing- look on any American highway and it's littered with people who don't /want/ to be driving or shouldn't be. Look at every Becky on her phone during the morning commute in her Tucson, look at every Brad aggro driving his 84 month loan GMC. Hell look how many drivers nowadays can't even operate a headlight switch. You expect these people to understand a stoplight? In my neighborhood alone 4 people have been rear ended at lights from someone on their phone. Distracted driving over the past 10 years has spiked, and it's only going to get worse unless Becky has an alternative, because no judge is going to pull her license when 'she needs it to get to work!' but heaven forbid she not check fb/tiktok for 40 minutes a day.
  • Scott Shouldn't the The Italian Minister for Business be criticizing The Milano for being too ugly to be Italian?Better use of resources doing that....
  • Steve Biro Frankly, while I can do without Eyesight and automatic start-stop, there is generally less B-S with Subarus in terms of design, utility and off-road chops than with many other brands. I just hope that when they adopt Toyota’s hybrid system, they’ll also use Toyota’s eCVT.
  • The Oracle These are all over the roads in droves here in WNC. Rarely see one on the side of the road, they are wildly popular, capable, and reliable. There is a market for utilitarian vehicles.