By on October 15, 2018

Usually, talk of an extended warranty is waved off as a money-making scam by thrifty buyers in the final moments of a sale. And, usually, it’s the dealer offering the coverage. The buyer sees their total amount owing skyrocket on the finance manager’s computer and quickly signs for the agreed-upon amount, thankful to have escaped the building with his or her original payment calculations intact.

Uncertainty lies years down the road, but the thrill of new vehicle ownership muscles those fears to the back of the mind as the driver motors home, fingers crossed.

General Motors wants buyers to embrace that extra peace of mind, but it wants the coverage to come from the factory, not from a dealer extended warranty or service contract. On Monday, the automaker announced an extended factory warranty for vehicles spanning its four brands, and, right on cue, complaints arose from those tasked with selling the cars.

In short, GM’s so-called “true, extended bumper-to-bumper limited warranty” lengthens the 3-year/36,000-mile term for new Chevrolet or GMC models to 5 years/60,000 miles. It’s a less mileage-intensive climb for Buick and Cadillac models — their warranty extension goes from 4 years/50,000 miles to 6 years/70,000 miles.

Availability of the extended factory coverage starts today. GM was quick to list why buyers might find its warranty preferable over a service contract, with the main perks being no deductible, and no-questions-asked service at all GM dealers. Coverage stays with the vehicle, regardless of who owns it.

What wasn’t listed was what the extended coverage would cost, with Automotive News claiming the automaker will leave it up to dealers. Buyers should expect to see their loan inflate by $1,000 to $2,000, or have their lease payments expand accordingly.

While several dealers complained to the publication that GM’s offer will step on their toes ( “I don’t think they like that dealers can make money on other extended warranties,” one said), the automaker says it’s not trying to make those offers dry up. The automaker sees it as mutually beneficial for both bodies — would-be buyers might be more likely to sign with the warranty in place, and it would encourage service visits from owners over a longer time frame.

Ken Mac, director of Chevrolet-Buick-GMC and Cadillac Protection, said the idea isn’t to take autonomy away from dealers. As a sign of good faith, Mac said GM’s only offering the warranty at the point of sale. Dealers can choose to offer it or not, or offer both their service contracts and the factory extension.

“As you get into things like aftersales and all that, it starts to look more like a vehicle service contract, which is the exact thing we are not trying to do here,” Mac said. Dealers, he added, can expect the company to “very fairly and generously” compensate them with the additional revenue.

In recent years, attractive warranty coverage has earned rival companies quite a bit of positive press. Hyundai’s new vehicle coverage is 5 years/60,000 miles, and last year Volkswagen hiked its bumper-to-bumper coverage on nearly all models to 6 years/72,000 miles.

[Image: General Motors]

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73 Comments on “Some Dealers Irked by GM Extended Warranty Offer, Many Buyers Might Not Be...”


  • avatar
    CC

    Meanwhile, in Australia, the standard factory warranty has become 5 year/100,000km (or unlimited km). Not an add-on extra, standard. No extra cost.
    The glaring exceptions are Toyota and VW, who persist with 3 years.

  • avatar
    SCE to AUX

    FWIW, Hyundai’s warranty is 10/100 on the powertrain, with variations for other aspects of the car, like rust-through, hybrid batteries, and bumper-to-bumper (5/60). At least it’s no extra cost.

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

    The shenanigans described in this article make me like the mfr-owned store so much more.

    • 0 avatar
      DeadWeight

      Hyundai can afford to do this as its lineup of vehicles is far more reliable and durable than Guangzhou-Guadalajara Motors (GM) piles of Shenzhen-made sh!t parts.

      Guangzhou-Guadalajara Motors (GM) has to charge extra $$$ for a warranty 50% or 60% as long because their vehicles are far more statistically likely to need major, costly, numerous repairs within 5 to 6 year period as when purchase from new, versus Hyundai’s ten year/100,000 mile period.

    • 0 avatar
      sportyaccordy

      Hyundai/Kia are also drowning in very serious recalls- engine failures and fires across hundreds of thousands of cars. The quality of service has dropped significantly as a result. A long warranty doesn’t mean much if it’s not honored properly. I’d rather have a shorter warranty in a car that was built right in the first place.

  • avatar
    sirwired

    If the dealers don’t like it, it’s probably a decent deal for consumers. Dealer-sourced warranties are notoriously awful.

    But I’m w/ SCE it’s no substitute for having the confidence to offer a longer factory-included warranty. That went a long way to rehabilitate Hyundai in the US after a disastrous early few years.

  • avatar
    FreedMike

    My guess is that this signals that GM wants more people to buy vehicles with longer-term loans and fewer through leasing.

    After all, if you lease a car (and I do), you could give a whit less about extended warranties. Hell, when I was picking my current car up the finance guy even said “I’d pitch an extended warranty to you, but it’d make no damn sense for you.”

    But if you’re looking at a seven year note on a horrifically overpriced CUV – sorry, I mean, fine GM family vehicle – the last thing you want is for something to go bad wrong while you’re still paying on it.

    • 0 avatar
      Art Vandelay

      This. I leased my Fiesta ST for this reason (and the huge pile o’ cash on the hood). That and I now get to beat it like a rental for 2 years. But on these hallowed forums it will be the dude that buys it CPO with 24000 miles that is the smart guy even though he is getting a “certified” car that has certifiably been flogged on by the previous owner every time he gets behind the wheel for 2 years and 2 teenagers will have learned to drive a stick on. Fun for me…good luck to the next guy.

      • 0 avatar
        JohnTaurus

        Seriously? Someone buying a Ford being called smart on these pages? They’d be better off explaining how a Yugo was the right choice.

      • 0 avatar
        Lie2me

        I’ve never purposely beat on a car rental or not, it just goes against my grain. I hope I never end up with a used car owned by you, Art.

        Which raises a good question, is this factory warranty offered by GM new car only or does it include CPO?

        • 0 avatar
          PrincipalDan

          New car only. The GM brand that has the best CPO warranty is Cadillac, although Lincoln’ CPO warranty is a year longer.

          (Just an FYI for those of us who might want a heavily deprecated sedan that still has warranty left on it.)

    • 0 avatar
      Joe Enrico

      True, so much so that I took a 36 mo lease (rather than 39) for my 2017 Tahoe so that it would be under warranty for my entire ownership.

    • 0 avatar
      sportyaccordy

      Does GM offer competitive leases on those belly draggers? To my knowledge they are just on the fence of being able to afford to.

  • avatar

    Based upon my Cadillac experience, and my father in law, BUY THE WARRANTY. When the CUE screen freezes or spider-webs, you’ll be glad you did.

    • 0 avatar
      Tele Vision

      My current Cadillac experience consists of one sitting in my car-hole, weeping coolant from a water pump that gave up the ghost. It has 221,000 Kms on it, though, so a warranty wouldn’t have done much.

    • 0 avatar
      DeadWeight

      Casey, I told you from the beginning of your Cadillac adventure that you would learn that Guangzhou-Guadalajara Motors (GM) post taxpayer-subsidized bailout is as bad as General Motors pre-bankruptcy.

      Lowest-cost bidder “China Mart”parts mess you up!

  • avatar
    SPPPP

    So the selling dealer gets to price it, any dealer has to honor it, and the factory has to pay for it? This does sound like a strange setup. I can understand the dealers having concerns.

    A plan like this could go a long way toward fixing the reputation of certain bad GM dealers who might be trying to weasel out of extended warranty work. But GM says they won’t be stopping those dealers from selling other warranties and service plans. So this plan seems to have limited benefits for GM.

    But for consumers, I think it could be helpful, as long as the pricing works out. And as long as there is someone at GM that you can call to make sure you get consistent application of the warranty policy (again, so a bad dealer can’t stonewall you for legitimate work).

    • 0 avatar
      jalop1991

      Hold on, everyone.

      Go take a close look at the Honda/Acura factory extended warranties.

      They’ve been doing this for YEARS, and it works. It works GREAT.

      In fact, their product is the foundation of their Certified Pre Owned program. Unfortunately, skeezy dealers will harp a car as being CPO but then sell a third party “service contract” in the end. (I had a friend of mine call them out on it when they did it to her; they had to undo it and make it good with the factory product.)

      I love, love, LOVE the HondaCare/AcuraCare products. They simply cannot be beat. A few years ago I bought an 18 month old ILX 6 speed with 28K on the clock–still inside the factory 4 years/48K miles. I bought AcuraCare to take it up to 7 years/120K miles–for a grand total of $1700. It was a five minute conversation with the dealer who sold the AcuraCare (someplace 1000 miles from me–they make money doing this).

      The VIN is in the system, and any and every Acura dealer was my friend at that point. Everything was handled by Acura.

      Their product is transferable, if you want; however, I traded the car back in December. With the age and miles, Acura refunded me $900.

      I can’t believe people here don’t understand this entire concept. What I don’t understand is why other carmakers don’t do this. Really, VW?

      • 0 avatar
        SPPPP

        “I can’t believe people here don’t understand this entire concept. What I don’t understand is why other carmakers don’t do this. Really, VW?”

        Ok, show me how it works. A GM dealer sales manager decides that they “really need to make this sale” before the end of the month. He throws in the extended factory warranty for free. It costs the buyer zero dollars. Four and a half years later, GM replaces a failing 9-speed automatic transmission for about $5,000. Where does the money to fix the transmission come from? How do the income and cost balance out for GM? And if it doesn’t matter what the dealers charge for it, why doesn’t GM put the extended warranty on ALL the cars FOR FREE?

        • 0 avatar
          jalop1991

          My point was not how they sell it, or what they sell it for. My point was how people seem not to understand or believe that such a factory product can exists.

          I can’t imagine that such a factory product does NOT exist in someplace like GM.

          Or VW.

          That factory warranty does, in fact, cost the dealership some amount of money. If the sales manager “threw it in for ‘free’ to make the sale,” he didn’t actually throw it in for FREE. He could have discounted the car that much more.

          The point is, it’s not a skeezy third party “service contract”. It’s a factory extended warranty, which is WAY WAY different–and better.

          I love my GTI, but if Honda gets some brains and produces a Civic Type R in adult clothes and puts it on the lot as an ILX, I’ll be all over that–because I know how American Honda works, and I know I can drive the heck out of it while under factory warranty for a long, long time if I so wish.

        • 0 avatar
          arach

          They get to price it… not cost it.

          its like CPO, dealers have to pay the CPO fee.

          So in your example, the GM sales manager decides to give it to a buyer for “free”.

          however, on their books, its recorded as a cost of say $1200, with a price of $0. That $1200 is deducted from the deal (and the new car department accounts).

          So yes, GM is charging the dealer, but not telling the dealer how much they have to sell it to you for. they can sell it to you for $0, for $1000, for $2000… but it costs them all $1200 (this amount will vary by car)

          The money to fix the car comes from the OEM warranty fund, which is where the $1200 goes…

          • 0 avatar
            PrincipalDan

            Is that where “goodwill” repairs are paid from as well?

            My wife had the manual trans rebuilt just outside the warranty period back in 2009 at 40,000 miles. Dealer said it was a “goodwill” repair and did it for free.

          • 0 avatar
            SPPPP

            Thanks, arach. That is basically how I thought it should operate. It wasn’t made clear in either this story or the original how the costs would be passed along. I still think it’s a little odd that GM is not just pricing it from the top down.

            I found the other thread of comments quite interesting, with different opinions about whether the warranty policies will actually be applied in the consumer’s favor. I also think this is a likely point of failure. And I don’t necessarily trust GM headquarters to be fair to the consumer either, though I think there’s a better chance of consistency there, rather than at a patchwork of dealers.

          • 0 avatar
            arach

            @SPPPP

            NP.

            Typically margin is 60% give or take.

            The problem from GMs standpoint is if they tell dealers it costs $1200 and they need to sell it for $2000, a lot of them won’t sell it because they’ll sell their 60% margin 3rd party products instead.

            But if they tell dealers to sell it for $3000, then that’s really “overpriced” for consumers, and they don’t really want it priced that high because its going to come back and haunt them. In addition, some states may come after them as predatory pricing, something that haunts some AMKT suppliers.

            We shall see how it plays out. If they price it from the top down though, that becomes real risky- either it will be overpriced globally, or brushed aside locally in favor of 3rd party alternatives with higher profit margins.

        • 0 avatar
          Jack Denver

          Just because it cost the buyer zero dollars doesn’t mean it’s “free”. What is missing from this article (intentionally) is how much GM is charging the dealers for this warranty (I’m sure the cost will leak out eventually) because they want the dealers to be able to mark it up as much as they want (just like they mark up the 3rd party warranties).

          Let’s say they charge the dealer $1,000. At that point it becomes like any other insurance product. Maybe they have priced the insurance premium too high or too low but if they guessed right then on average the claim cost per car will be less than the premium they are charging. Some cars will need a $5,000 transmission, some won’t need much of anything. Insurance works by averaging.

          Why don’t they do it for free? Nothing is really free, it’s built into the price of the car. Like any other option or feature, the manufacturer has to compare their offering to the market and decide what they want to include. Why stop at 5 years/60,000 or 10 years/100,000. Why don’t they just give everyone a free LIFETIME warranty on everything so you will never have to buy a car again?

          Some people here pointed out that people who are leasing don’t need extended warranties so by NOT including the extended warranty in the base price of the car, they can actually save $ vs. the situation where all GM vehicles had the extended warranty and the cost of that warranty is built into the price of the car.

      • 0 avatar
        sirwired

        As an added bonus, you don’t even have to buy HondaCare from the dealer you buy the car from. You can get it anywhere, and there are several outfits online that will sell it to you cheaper than any F&I dept. will cough up.

        • 0 avatar
          jalop1991

          “As an added bonus, you don’t even have to buy HondaCare from the dealer you buy the car from. You can get it anywhere, and there are several outfits online that will sell it to you cheaper than any F&I dept. will cough up.”

          (cough)Curry Honda/Acura(cough)

    • 0 avatar
      Gardiner Westbound

      Manufacturers pay much less than retail rates for warranty repairs, incentivizing dealers to deny claims. Notwithstanding Internet owner forums filled with similar complaints the dealer may say the problem is normal, he cannot replicate it, nobody else has complained, or apply a short term fix to get the car to the end of its warranty so the repair bill bomb falls on the owner.

    • 0 avatar
      MBella

      Nothing new here, and pretty much every manufacturer offers their own version. Even GM offered this previously. There are probably some changes to the dealer’s cut, and that’s likely why they’re upset.

      I know some dealers do sell crappy warranties, but it’s pretty short sighted. When the customer comes back for a repair that the warranty won’t pay for, you are stuck with the bill. Ford’s product was really good when I was still working at dealers. They paid very well, and it could be on any vehicle, not just a Ford.

  • avatar
    Kenn

    “And as long as there is someone at GM that you can call to make sure you get consistent application of the warranty policy…”

    That’s a good one! How many of us have someone at GM (or any other manufacturer ) who will intercede on our behalf? In my experiences, a dealer will say/do any number of things to avoid filling a service bay with warranty work, while the manufacturer says it won’t tell an independent businessman (their customer, the dealer) what to do.

    • 0 avatar
      MBella

      Uh, everyone does. Every manufacturer has a customer relations department that will help you in every legitimate concern, and even some less than legitimate ones. Customer loyalty and satisfaction has become very cutthroat.

      • 0 avatar
        Kenn

        My experiences with “Customer Relations”? That is precisely where I’ve been told, “We can call the dealer, but he’s an independent businessman. We can’t tell him what to do.”

        I’ve owned 11 new cars, and except for one minor warranty repair (for a defective outside mirror), every other experience – with multiple brands and dealers – has involved arguments and excuses for why “that’s not covered by the warranty.” I vividly recall how a Toyota dealer’s service advisor drove and confirmed an issue, while the factory rep then contradicted him, told me “there’s nothing wrong,” turned his back to me and walked away. You don’t forget “customer relations” experiences like that, and it’s only one of many I’ve had.

        • 0 avatar
          MBella

          So what was the common denominator in all those experiences? Manufacturers make every effort to resolve issues. I wouldn’t have a job otherwise. The dealer will always do what the manufacturer instructs them to do, as long as they are getting paid. This is how warranty works, and how dealer service departments keep their lights on. If they went out of their way to dismiss issues, they couldn’t stay in business.

  • avatar
    PeriSoft

    Hey, TTAC, any comment on your mobile site redirecting article clicks to scam sites purporting to offer gift cards and free iPhones? You just regained me as a reader after politics prompted a year-long break; if you’re trying to lose me again, this is an awesome start!

    • 0 avatar
      NormSV650

      I ha e gotten that too but for Walmart or something. Just close the browser or tab and start over on Samsung browser.

      • 0 avatar
        PeriSoft

        So far they’re nothing worse than annoying for -me-, but it bothers me to support a place while management either believes it’s ok to scam people via their ad network (“But we didn’t do it ourselves!”) or is so clueless that they don’t know what their network is doing.

        • 0 avatar
          JimZ

          it’s a lot harder problem to solve than you think. The TTAC website is several layers removed from the source of the malicious ads.

          https://product.voxmedia.com/2018/1/22/16902862/why-ads-redirect-to-giftcards-and-what-were-doing-to-secure-them

          • 0 avatar
            PeriSoft

            JimZ,

            It’s difficult technically but ought to be easier from a policy perspective. If you allow multiple levels of “partners”, you’re going to get this crap. If you don’t, your system is a bit less efficient and you don’t make quite as much money. But you never make as much money if you don’t encourage bad behavior. Encouraging it via policy and then bemoaning how hard it is to technically solve the problem you created strikes me as ringing a bit hollow.

    • 0 avatar
      arach

      Funny. I came to TTAC a year ago after I ran away from OTHER car sites due to politics.

      • 0 avatar
        JimZ

        “Funny. I came to TTAC a year ago after I ran away from OTHER car sites due to politics.”

        As Jeff Foxworthy would say, “that’s half a sentence.”

        the rest of it is “… which differ from mine.”

        • 0 avatar
          arach

          I’m fine with no politics on a car site.

          I can handle subtle, limited politics of any type.

          But I sure as heck don’t like a WHOLE LOT of politics I don’t agree with on a CAR site.

          I can handle them from coworkers, family, and friends, but not cars.

        • 0 avatar
          arach

          I’m fine with no politics on a car site.

          I can handle subtle, limited politics of any type.

          But I sure as heck don’t like a WHOLE LOT of politics I don’t agree with on a CAR site.

          I can handle them from coworkers, family, and friends, but not cars.

          • 0 avatar
            FreedMike

            I think it depends on the politics. If it’s intelligent discussion, I don’t mind it one bit. If it’s what passes for politics these days – i.e., anyone who disagrees with me even slightly is an idiot, communist, Nazi, I heart Trump, I hate Trump, Warren is Pocohantas, etc – then no thanks.

          • 0 avatar
            arach

            Touche Mike!

  • avatar
    backtees

    Nissan has been out for awhile with its 5y 100k bumper to bumper on the Titan…..wonder how that is working out??

  • avatar
    el scotto

    As long as people think the service writers are doing lines and shots with the sales manager; it doesn’t really matter. Or, stuff that should have been fixed won’t be. Maintenance delayed will be maintenance denied under warranty. Like GM dealers will ever change.

  • avatar
    87 Morgan

    Every factory has an extended service contract available for there cars. From what I understand what makes this different AND a terrible deal for the consumer is the following (example): Customer can buy the Chevrolet for 20k and get a 3 year 36k bumper to bumper or buy it for 22k and get a 5 year or 60k Bumper to bumper. It is a line 1 add, which means it is taxable and and the warranty comes with the car. Basically you tattoo the car with additional warranty. Sounds great right? Wrong.
    What if the car gets totaled? Too bad, it is non-cancellable because it is a part of the car. If you buy a service contract for your car, whether factory or aftermarket and the car gets totaled you can cancel it and get a pro rata refund.

    As for Hyundai and Kia offering a 5/60 on there cars, this is not free and is costed out in the final build out cost of the car. Every manufacturer has a reinsurance portfolio they maintain to cover long term warranty costs. If H/K were to lower their time and mileage, they would be able to lower the MSRP. The hope, like any insurance portfolio, is investment returns on the premium set aside along with the premium out run claims. But warranty claims are a serious long term contingent liability for any manufacturer.

    • 0 avatar
      JohnTaurus

      And when your H/K needs that warranty for, I dunno, a defective engine that is known within the company to have a design defect, you’ll get denied. Reason? They’ll think of one. Bet your sweet Asper Cream, they’ll think of one.

      • 0 avatar
        DeadWeight

        Fore every recall or actual defect Hyundai has issued/propagated, Ford has issued/propagated 10x more, over the same time frame.

        Did you ever find that sweet, sweet creampuff of a 2003 Kia Amanti that you wanted to purchase for your alone-to-be Uber gig, John?

      • 0 avatar
        DeadWeight

        For every recall or actual defect Hyundai has issued/propagated, Ford has issued/propagated 10x more, over the same time frame.

        Did you ever find that sweet, sweet creampuff of a 2003 Kia Amanti that you wanted to purchase for your soon-to-be Uber gig, John?

      • 0 avatar
        SCE to AUX

        @JohnTaurus:

        If you’re referring to the crankshaft metal chip thing, that was a manufacturing defect covering over a million cars. I personally know 3 people whose engines were replaced under this recall. Two of them had actually popped, and one had gotten rough.

        Last time I visited the local Hyundai dealer, they had blown engines stacked like cordwood out behind the service bay.

        But no mfr will replace parts that haven’t broken yet, unless it’s a proactive recall for a safety issue. My son’s car was ‘analyzed’ and found to not be affected (yet). But he feels like he’s driving a time bomb.

      • 0 avatar
        CKNSLS Sierra SLT

        JohnTaurus-

        You mean denying warranty for some made up reason like “fuel contamination” that Ford cited to get out of their 6.0 diesel fiasco?

    • 0 avatar
      arach

      I like your argument, but there’s one thing I want to disagree with- that its a terrible deal for the consumer.

      This “piece” is relative. Now personally I don’t buy the extended warranties because I “self insure”. I think its a “bad deal”, but if you ARE a warranty buyer, there’s some serious perks.

      The primary perk is that the vast majority of extended warranty buyers have NO IDEA what their extended warranty covers. Have you seen the lists of exclusions on a lot of them? Lots also have huge deductibles- $100, 200+.

      There are many consumers who “agreed” to buy an extended warranty for $2500, and got hit with something worth $500- that doesn’t cover the things that go wrong, with high deductibles, and an amazing ability to “deny” everything. Many ONLY work at the dealership they are purchased from.

      At least with the factory extended warranty:
      -You know whose offering it
      -You can use it anywhere
      -You understand how it works- its just like your usual warranty but longer

      Again, not telling you its “an awesome buy”, just saying that I like it more for the person who buys an extended warranty as opposed to some of the shady third party ones out there… Buyers don’t do their due diligence when buying them…

  • avatar
    CKNSLS Sierra SLT

    87 Morgan

    I have no doubt the Hyundai/Kia warranty is built in to the price of the vehicle.
    With that being stated-a year or so ago I purchased a brand new 2017 Hyundai Santa Fe XL Limited and it was STILL $5,000.00 cheaper than the Toyota equivalent.

    So-the vehicle is still A GREAT deal even with the warranty “factored in”.

  • avatar

    watch out, before long penetration levels will be required like certified used sales.

    “Hello, I’m from the factory and am here to help”.

  • avatar
    jimmyy

    Personally, I solved the extended warranty dilemma years ago. I switched to Toyota. Now, when the Toyota dealer offers me an extended warranty, I just laugh. Only a fool would purchase an extended warranty on a Toyota. It will never be needed.

  • avatar
    patman

    Am I correct in understanding this extension is only available at the time of purchase of a new car? So if I’ve already bought a car, this warranty extension is unavailable and my only options would be a GMEPP or some third party warranty?

  • avatar
    cognoscenti

    This is actually a good deal for many buyers, and the proof is in the dealer’s not liking it. I suspect that the bean counters will have done their work and the price will vary by vehicle and possibly trim.

    When we bought my wife a new Saturn Vue V6 AWD years back, they offered a true factory extended warranty (NOT a dealer service contract!) and we took it. IIRC it was $1700 to cover the vehicle out to 7 years/75K miles. It was an easy choice since financing was 0% too. Then at around 70k miles, we used it to have a whole bunch of wobbly front suspension components replaced on GM’s dime – the warranty covered it with no deductible, and the car was then good again until around 120K miles. I should mention that this was in the Detroit Metro Area, where the infrastructure/roads make it look like a Eastern Bloc country. Anyway, I guess they just did it differently at Saturn versus the rest of GM back then? “Different Kind of Company…” to be sure.

    • 0 avatar
      PrincipalDan

      The bean counters have likely calculated that they couldn’t offer a longer warranty by raising MSRP but could get a select number of customers to pay for the privilege of longer warranties.

  • avatar
    R Henry

    There is only one reason extended warranties are offered–perception of quality is poor.

    Chrylser was forced to do its 7/70 deal to lure back pissed off former customers, and Hyundai/Kia upped the ante to 10/100. In both cases, the manufactures did indeed churn out better cars, and the gambit worked.

    With GM, they will screw it up just as the will screw up the 2.7 turbo in Silverados, I am sure. I predict the head gaskets or some other internal engine components will start failing at about 30K miles, GM will refuse recalls, blaming it on owner abuse or inadequate servicing…you know the drill. Similarly, these extended warranties will be mishandled…they will likely have some fine-print exclusions…or pissed off dealers will find reasons NOT to complete extended warranty repair work. These will simply be added to the list of GM “deadly sins.”

    • 0 avatar
      bullnuke

      R Henry – You are describing what I experienced from Honda during warranty issues with my daughter’s Civic. All Honda’s are perfectly designed and manufactured by the world’s premier auto manufacturer and will never suffer any defect except for owner mis-use and abuse.

  • avatar
    PrincipalDan

    Personally I feel like the 3 year/36,000 is a joke. How many decades has that been the standard?

    Everyone should be 5 year/60,000 bumper to bumper and go up from there.

  • avatar
    jkross22

    It will be interesting to see how VW’s gamble of increased warranty changes perceptions in a few years. Or maybe not.

  • avatar
    don1967

    Factory-backed extended warranties are a good idea from a CSI perspective. Few things in life are as unreliable and frustrating as third-party service contracts.

    That said, buying any extended warranty is a sign that you’re in over your head financially. If you can’t afford to pay off the car during the original warranty period, and as a result you can’t afford repairs when the warranty expires… then you can’t afford the car. Pretty simple.

    • 0 avatar
      Snooder

      Not necessarily.

      Some people can afford the prospective repair costs, but they prefer a known budget amount to a random surprise. And others are banking on their expected repair costs for a known unreliable vehicle to be bankrolled by the saps who get the warranty on more reliable vehicles. Like the famed “DeMuro Carmax Warranty”. Paying 2k for a warranty on a 3 year old LandRover or a 6 year old Aston Martin is just financially prudent given the extreme likelihood of getting iver 2k in repairs on those vehicles.

      Plus it’s nice not to feel like you need to haggle because it’s paid for no matter what.

  • avatar
    fumehood

    What is the cost to the dealer? GM dealers should unite and offer this for free or at cost, and then milk GM for all of the warranty service work they do. Another selling point for sales department, customer piece of mind, more jobs for service department. The dealer should make more in the long run on the service work, and maybe a slight sales boost.


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