GM To Begin Selling Cars
09-11-2009, 11:56 AM
#1
GM To Begin Selling Cars
I read this today and thought I'd pass it on. It sounds great, if you don't peruse the fine print. If it sounds too good to be true, it usually is. The deal breaker is this sentence:
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The Satisfaction Guarantee covers the vehicle purchase price and sales tax, but not other add-ons like accessories, negative equity on a trade-in or other fees; other restrictions apply[/B]
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In an attempt to ignite sales and instill confidence in the post-bankruptcy automaker, GM will begin a 60-day no-questions-asked money-back guarantee offer for all its new 2009 and 2010 vehicles. GM will begin the new program Monday, September 14 and extend it through November 30.
Offering new cars with a no-questions-asked money-back guarantee has not been attempted in the U.S. auto market before, GM said. Guarantees from Oldsmobile and Saturn offered return policies which were not as comprehensive. A similar program offered in the U.K. by GM's Vauxhall resulted in a 2-3% return. GM expects a comparable rate of return here in the U.S.
The offer is part of a new "May the Best Car Win" marketing campaign that GM is rolling out as a way to re-engage buyers after the frenzy of the government's Cash for Clunkers program. The automaker is hoping the bold return policy and its earlier introduced 100,000 mile/5-year powetrain warranty, will draw new buyers to the newly restructured company.
Currently, cars are sold with no "cooling off period" meaning that if someone decides they don't like the car they can't return it. Most products sold through other retailers can be returned for refund or exchange. Car dealers have strong lobbying power though and have resisted consumer protections.
GM has clearly been forced into this money-back guarantee due to slow sales. The new plan will be hyped during Sunday's football games by GM's government-appointed chairman Edward Whitacre.
Details of GM's new "Satisfaction Guarantee":
- Offer covers 2009 and 2010 Model Year Chevys, Buicks, GMCs and Cadillacs (except medium duty trucks)
- Customers (one per household) can return their vehicle between 31 and 60 days with less than 4,000 miles
- Customers will be informed in writing before they buy the vehicle of the terms of the Satisfaction Guarantee
- Customers must take delivery by Nov. 30
- The Satisfaction Guarantee covers the vehicle purchase price and sales tax, but not other add-ons like accessories, negative equity on a trade-in or other fees; other restrictions apply
- Leased vehicles are not included
- More details will be available beginning Monday, Sept. 14, at the websites for Chevrolet, Buick, Cadillac or GMC web sites.
This program will help buyers who don't do a thorough job of evaluating a vehicle during the often too-brief test drive. Some aspects of vehicles, such as seat comfort or ergonomics, take time to assess. If, after living the with vehicle for over a month, the buyer discovers something they don't like about the vehicle, they can return the vehicle to the dealer.
Furthermore, many buyers are pressured into purchasing a car which puts undue pressure on their family budget. Now, for GM vehicles at least, buyer's remorse is a thing of the past.
---------------------------------------------------------------------------------------------
The Satisfaction Guarantee covers the vehicle purchase price and sales tax, but not other add-ons like accessories, negative equity on a trade-in or other fees; other restrictions apply[/B]
---------------------------------------------------------------------------------------------
In an attempt to ignite sales and instill confidence in the post-bankruptcy automaker, GM will begin a 60-day no-questions-asked money-back guarantee offer for all its new 2009 and 2010 vehicles. GM will begin the new program Monday, September 14 and extend it through November 30.
Offering new cars with a no-questions-asked money-back guarantee has not been attempted in the U.S. auto market before, GM said. Guarantees from Oldsmobile and Saturn offered return policies which were not as comprehensive. A similar program offered in the U.K. by GM's Vauxhall resulted in a 2-3% return. GM expects a comparable rate of return here in the U.S.
The offer is part of a new "May the Best Car Win" marketing campaign that GM is rolling out as a way to re-engage buyers after the frenzy of the government's Cash for Clunkers program. The automaker is hoping the bold return policy and its earlier introduced 100,000 mile/5-year powetrain warranty, will draw new buyers to the newly restructured company.
Currently, cars are sold with no "cooling off period" meaning that if someone decides they don't like the car they can't return it. Most products sold through other retailers can be returned for refund or exchange. Car dealers have strong lobbying power though and have resisted consumer protections.
GM has clearly been forced into this money-back guarantee due to slow sales. The new plan will be hyped during Sunday's football games by GM's government-appointed chairman Edward Whitacre.
Details of GM's new "Satisfaction Guarantee":
- Offer covers 2009 and 2010 Model Year Chevys, Buicks, GMCs and Cadillacs (except medium duty trucks)
- Customers (one per household) can return their vehicle between 31 and 60 days with less than 4,000 miles
- Customers will be informed in writing before they buy the vehicle of the terms of the Satisfaction Guarantee
- Customers must take delivery by Nov. 30
- The Satisfaction Guarantee covers the vehicle purchase price and sales tax, but not other add-ons like accessories, negative equity on a trade-in or other fees; other restrictions apply
- Leased vehicles are not included
- More details will be available beginning Monday, Sept. 14, at the websites for Chevrolet, Buick, Cadillac or GMC web sites.
This program will help buyers who don't do a thorough job of evaluating a vehicle during the often too-brief test drive. Some aspects of vehicles, such as seat comfort or ergonomics, take time to assess. If, after living the with vehicle for over a month, the buyer discovers something they don't like about the vehicle, they can return the vehicle to the dealer.
Furthermore, many buyers are pressured into purchasing a car which puts undue pressure on their family budget. Now, for GM vehicles at least, buyer's remorse is a thing of the past.
09-14-2009, 10:05 AM
#2
I had to check this out today. I stopped by a local GM dealership and asked about this 60 day/4,000 mile return policy. This is what I found.
He told me that 60% of car deals are done with trade ins. I asked if they hold these cars until the 60 days are up and he said no. OK, now we are down to the 40% who don't have a trade in. If I were to purchase a car for cash and return the car. When I returned it, the local dealer fee would be $700.. I would also be responsible for sales tax, property tax, and he said some other fee's (which he did not identify). I also asked if he had any cars on the lot without accessories and he said no. He said that I wouldn't want a car w/o accessories. He estimated that typically, there are $500, or more on the cars he sells. Based upon this, the very minimim, it would cost me on a $20K car, if I paid cash, would be:
Sales Tax = $1,200.
Property tax = 200.
Accessories = 500.
Dealer fee = 700.
Misc fees = ???
Minimum Cost = 2,600. + the Misc fee's, whatever they are.
Something North of $3K to drive a Chevy for 60 days. Does this sound like a deal you can't pass up?
He told me that 60% of car deals are done with trade ins. I asked if they hold these cars until the 60 days are up and he said no. OK, now we are down to the 40% who don't have a trade in. If I were to purchase a car for cash and return the car. When I returned it, the local dealer fee would be $700.. I would also be responsible for sales tax, property tax, and he said some other fee's (which he did not identify). I also asked if he had any cars on the lot without accessories and he said no. He said that I wouldn't want a car w/o accessories. He estimated that typically, there are $500, or more on the cars he sells. Based upon this, the very minimim, it would cost me on a $20K car, if I paid cash, would be:
Sales Tax = $1,200.
Property tax = 200.
Accessories = 500.
Dealer fee = 700.
Misc fees = ???
Minimum Cost = 2,600. + the Misc fee's, whatever they are.
Something North of $3K to drive a Chevy for 60 days. Does this sound like a deal you can't pass up?
09-14-2009, 10:22 AM
#3
VP Bob Lutz was on the Today show this AM. He said this was done before in the UK. He said the return rate was about 3%. The percent of buyers who bought the cars knowing they would be returning them was about 0.5%.
I bought an Acura once after too short a test drive. I then ordered one and drove it home on a Saturday. The dealership was about 45 miles away. By the time I got it home I knew I hated it...... the seats were too low and very uncomfortable for me. I parked it. On Monday I begged them to take it back and was willing to take a sizeable loss but they refused. I modified the seats but always hated the car and sold it within a year, taking a big loss. In turn I bought a Nissan Maxima which I drove for 18 years!
I bought an Acura once after too short a test drive. I then ordered one and drove it home on a Saturday. The dealership was about 45 miles away. By the time I got it home I knew I hated it...... the seats were too low and very uncomfortable for me. I parked it. On Monday I begged them to take it back and was willing to take a sizeable loss but they refused. I modified the seats but always hated the car and sold it within a year, taking a big loss. In turn I bought a Nissan Maxima which I drove for 18 years!
09-14-2009, 11:57 AM
#5
Former Moderator
Dave, I heard the Bob Lutz interview too. He actually made the ploy sound pretty good as a sales technique. People would be able to experience first hand the improved quality of the GM cars and be convinced that they had made a good purchase. And he felt that 97% of the buyers would keep the new cars. it will be interesting to see how it works out here.
09-14-2009, 12:11 PM
#6
Originally Posted by S1997,Sep 14 2009, 11:57 AM
Dave, I heard the Bob Lutz interview too. He actually made the ploy sound pretty good as a sales technique. People would be able to experience first hand the improved quality of the GM cars and be convinced that they had made a good purchase. And he felt that 97% of the buyers would keep the new cars. it will be interesting to see how it works out here.
09-14-2009, 12:41 PM
#7
GM is desperate to get people to give them a chance. That is what this is all about. The ads that Hyundai ran a few years back when it came out with the 100k warranty were a turning point for Hyundai; up to that point the public perceived the cars to be junk. GM is hoping (praying) for similar results. They believe they have good product now but the public isn't willing to even try them. As a taxpayer I hope for oursake it works. The program wasn't built to screw people who find the car doesn't live up to their expectations. If it does cost them thousands to do returns as suggested and if there are high volumes then the entire program will put the final shovel of dirt on GM IMHO.
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09-14-2009, 01:49 PM
#8
Registered User
Originally Posted by dlq04,Sep 14 2009, 04:41 PM
They believe they have good product now but the public isn't willing to even try them.
Alas, American-badged companies have a lot to make up for, and the perception won't change as quickly as has their upgraded products.
09-14-2009, 03:46 PM
#9
I don't think anyone buys a car with the thoughts of returning it high on the "to do" list. Most people know what they want, test drive it and make a decision. Do some folks regret their choice, sure. As Dave mentioned, it appears GM feels returns will be a very small percentage. It's not a perfect solution, but it is a possibility for some. Yes people will need to read the fine print and be well informed.
I'd prefer not to go with total negativity here. Let's give them chance before we write them off.
to Skip's post.
I'd prefer not to go with total negativity here. Let's give them chance before we write them off.
to Skip's post.
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