By Mark Huffman
ConsumerAffairs.com
September 11, 2009
When you buy a new car, it's yours once you drive it off the
lot. The dealer doesn't want it back until you're ready to have it
serviced.
But in a high stakes gamble - a gamble with taxpayer dollars, by the way - General Motors is offering new car buyers a 60-day money back guarantee on eligible purchases of new Chevrolet, Buick, GMC and Cadillac vehicles. The guarantee allows customers to return their vehicle to their dealer between 31 and 60 days of purchase and receive a refund of the purchase price for the vehicle.
GM is the first U.S. automaker to ever take such a bold step.
"We think if consumers give us a fair chance and look at the facts on the things that matter most to them, like design, fuel economy, warranty and safety, our vehicles are the best choices - that's what makes an offer like this possible," said Bob Lutz, GM vice chairman, Marketing and Communications.
The offer covers covers 2009 and 2010 Model Year Chevys, Buicks, GMCs and Cadillacs but does not include medium duty trucks. Customers must take delivery of the vehicle by November 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. The carmaker says other restrictions apply, and will be spelled out fully when the program is launched next weeks.
In a flurry of leaks before the announcement, GM sources said the ad campaign surrounding the program will be "may the best car win." According to sources, some of the ads will feature GM CEO Ed Whitaker, in a throwback to an earlier era. When Chrysler mounted a successful campaign to turn itself around in the 1980s, CEO Lee Iacocca served as TV pitchman, telling consumers "if you can find a better car, buy it."
Dealers dinged
GM is also leaking word of a restructured deal with its dealers. Reuters quotes an unnamed source as saying GM is cutting dealers' profit margins by a half point to make GM more competitive.
GM emerged from bankruptcy in July, using about $50 billon in federal aid to bolster its cash flow as it regroups. GM sales are down about 34 percent through August, though it did get a lift from the government's "cash for clunkers" program.
GM apparently is aiming to restore consumer confidence in its brand, tarnished by the automaker's collapse, beginning at the end of last year. The campaign's message is that GM believes in the quality of its product so much that it's willing to back up each sale with a guarantee.
Skeptical consumes
Such a campaign would likely be targeted at consumers like Ronald, of Rosedale, New York, who said he took his 2008 GMC Arcadia to the dealer five separate times because the check engine, AWD, tracking and stabilizing lights would flash on his dashboard and shut the car down.
"When returning the vehicle, the mechanics seemed to not have a clue to what the problem was even after putting the vehicle on a diagnostic machine several times," Ronald told ConsumerAffairs.com. On one occasion, my alarm was removed because they stated it was the cause of the problem. To date, the problem has not been rectified and my car is still without an alarm, which they have failed to replace since it was not the cause. I have insisted that if they are unable to fix my vehicle, they should replace it or refund me of its value according to the Lemon Law."
In its story on the marketing ploy, the Wall Street Journal cites a source who said GM will "spend heavily" on advertising and will cover a wide range of media, including the Internet. GM will reportedly stage events around the country to allow skeptical consumers to drive GM vehicles on a test track. In fact, some GM commercials have already featured such scenes.
