The Service Department Finger-trap: GM Cuts 100k Mile Powertrain Warranty to 60k

Back on March 12, 2015 Automotive News.com reported that GM is cutting their 100,000 mile powertrain warranty to 60,000 miles on 16 2016 model year vehicles.

“Through research, we have determined that when purchasing a new vehicle, included maintenance and warranty rank low on the list of reasons why consumers consider a particular brand over another,” reads the dealer memo, sent by Chevrolet vice president Brian Sweeney and GMC vice president Duncan Aldred.

 

“As a result, we have benchmarked our competitors, reviewed our current offerings and have concluded the following modifications to align closely with our customers’ needs and expectations,” it said.

 

This irks me, but let’s continue with the article:

GM rolled out the free-maintenance program as a customer-retention move. At GM’s annual shareholders meeting in June 2013, then-CEO Dan Akerson said it was meant to “forge even stronger relationships” between GM dealerships and customers and “to kick the ownership experience off on the right foot.”

 

Some dealers have said that many customers don’t bother to take advantage of the program, which includes a 27-point inspection.

 

There’s a lot in the two quotes that speak to the percieved value of customers once they buy a brand’s vehicle.  The latter speaks to the wisdom of vehicle owners–or lack thereof.

Hyundai pioneered the 100,000 mile warranty  back in the late 80’s as a way to assuage worries about the build quality of their low-price vehicles.  Folks who can’t afford medium priced used cars should still be able to buy new.  Low-priced cars shouldn’t equal low quality.  Hyundai exploited this niche, which was soon followed by other Asian carmakers, namely sister company Kia.  Even though Hyundai shipped us some really shoddy vehicles for the first few years, they were willing to fix factory errors on the back end.

To me, they used the 100k warranty program to build a brand rooted more in service than in reliability.  As build quality increased, the understanding was already out there that Hyundai stood by their vehicles.  Eventually domestic carmakers followed suit and began to extend their warranties from the 3-year, 36,000 mile standard.

We all know the top-of-mind exercise for the American automotive consumer.  Fords are built better than Chevy.  Unless you’re interested in Chevy, then it’s vice-versa.  Japanese marques are built better than American.  European marques are built better as well, but are more expensive to service.  Unless it’s French, then stay away.  Also, run from anything made east of Germany.

All of this is part of the game, and allows car salesmen and marketers an opportunity to make a living.

But at the end of the day, it is all a crapshoot.  Cars break more often than many of us would like to think.  For whatever reason.  Ask a service advisor or technician.  No matter the year, make or model, they all pass through the garage doors.

So to pull back on warranty for reasons to sell to new customers is, to me, a statement of how you stand by your existing customer.

Now let’s look a portion of the second quote:

Some dealers have said that many customers don’t bother to take advantage of the (free maintenance) program, which includes a 27-point inspection.

 

This is irksome as well.

I believe car owners need to take better care of their vehicles.  Automakers need to emphasize scheduled maintenance more than they do.

Maintenance is the key to mitigating automotive repair expenses.  It also tips you on when to start the replacement process.  Unfortunately, Americans aren’t as good at maintenance as they need to be.

Part of Hyundai’s 100,000 mile warranty required owners to bring their vehicles in for scheduled maintenance.  If you didn’t, there was a chance that the warranty wouldn’t cover the repair.  Which makes sense.  We teach our kids to take care of things.  Why should that not apply to us?

Talk about warranty and maintenance does nothing to sell cars, I know.  But it helps the owner relationship, in my own mind.  I may not be happy I had to pay, but if a regular inspection caught something, I should understand the value of probably paying less now.  If it’s covered by warranty, I should be even happier.  The automaker and dealer did right by me; something you don’t hear everyday.

There are some that automakers will never make happy.  If they gave these people gold, the complaint would be about the weight.

But I think Hyundai was on to something.  If you’re under warranty and don’t drop the $9.99 to change the oil, or $24.99 for an oil change and inspection, then maybe you should pay when there’s a problem directly connected to your oversight.  If your maintenance is free, then there should be a kill switch a dealer could throw to get you to come in.

I understand we’re busy.  I get the need to juggle the household budget.  But your car is the lifeline for an overwhelming number of us to make a living.  Maintaining it shouldn’t taken lightly.

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Sebastian James

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