GM Warranty Could Help Perception, Sales
February 05, 2007
General Motors' new extended warranty on used vehicles similar to the one offered on its new models could boost GM sales, improve its resale values and increase consumer confidence in GM vehicles, say analysts for Edmunds.com.
The expanded warranty covers GM Certified Used Vehicles from the 2002 model year on. The fully transferable, limited warranty covers the powertrain for five years/100,000 miles with no deductible. This fall, GM announced a similar warranty on its new 2007 models. The extended warranty is intended to impress upon consumers that GM's quality has improved and provide them with peace of mind to buy GM vehicles.
While GM boasts the limited powertrain warranty covers more than 900 components, Alex Rosten, Edmunds.com's manager of pricing and market analysis, notes the actual cost of the warranty to GM is negligible. "The extended warranty applies primarily to the drivetrain, traditionally the most reliable components on GM vehicles," he says. "In essence, they are backing up parts that they know are most likely not to fail within the five-year/100,000-mile period."
Still, Rosten notes, the new warranty makes GM much more competitive and should help increase sales as well as provide a slight boost to GM's resale values.
Edmunds.com analyst Jesse Toprak adds GM's actual product quality has been coming very close to that of many of the highly regarded imports in recent years. "But," he says, "the company's perceived quality is nowhere near reality for most consumers. That is a significant issue for GM. This extended warranty will help close the gap between perception and reality, and create confidence for consumers considering GM purchases."
Posted by Michelle Krebs at 11:05 AM under Companies | Comments (2) | digg this | Seed Newsvine
The warranty is more marketing than substance and proves nothing about GM's so called improved quality and reliability. First, you'll need to tell me how many vehicles, outside of those destined for rental fleets, are driven anywhere close to 20,000 miles per year. Fifteen thousand - maybe; 12,000 miles per year is what a typical owner puts on a vehicle per year (even less if its a leased vehicle with a mileage restriction such as 10,000 miles per year). This "improved warranty" is as transparent as plastic wrap.
Tell them to put there money where there mouth is! Why don't they offer 10 years or 100,000 miles like Hyundai and Kia do (I know why - it's REALLY EXPENSIVE)? Who are they kidding with bumping ONLY the mileage component of their warranty? I will give them credit - they do have some very bright people in their marketing department.
Pasadena Local
Posted by: Pasadena Local | February 07, 2007 at 3:55 PM
>>Why don't they offer 10 years or 100,000 miles like Hyundai and Kia do (I know why - it's REALLY EXPENSIVE)?
Please tell me you have read the warranty on these vehicles before asking for it on a GM.
The GM 100,000 mile Powertrain Coverage is of true value. GM as a manufacturer offered previously to customers an option to purchase a GMPP Value Guard, an extended service contract, to its customers purchasing used or new vehicles. The GM 100k coverage is this same coverage for a 5 year period and 100,000 miles. Providing the consumer VALUE at the expense of the manufacturer. This same coverage would have ran the consumer from $500-2000 before this 5yr/100k committment.
Read More at http://www.ExtendedGMWarranty.com
Posted by: Warranty Specialist | April 14, 2007 at 10:07 AM