Dealers Predict GM Buyers Will Take Rebate over Trial Period

Although General Motors dealers have said that they appreciate the quality focus of GM’s new satisfaction-guarantee program, they maintain that most buyers will opt for the program’s $500 cash rebate rather than the 60-day trial period.

One week ago, GM debuted a program that offers buyers 60 days to return a car for a refund. Advertisements for the satisfaction-guarantee program feature Ed Whitacre, GM’s new chairman, challenging competitors with “may the best car win.” If buyers refuse to participate in the trial period, they will instead receive $500 in cash.

A common complaint among GM dealers is that the satisfaction-guarantee program’s recent unveiling has prevented them from promoting the offer to very many buyers. So far, most GM buyers appear to be opting for the $500 cash rebate option.

“If they like the car, if they test-drive the car, most of the people would rather have a car to keep,” explained dealership owner Tom Durant, the owner of six GM stores in Florida and Texas.

Another GM dealer, Chris Haydocy, also believes most buyers will take the rebate. However, he contends that dealer salespeople who use the $500 in cash as an incentive for buyers are missing the program’s point.

“Our salespeople are not permitted to talk about the $500. That is going to be disclosed in the business office,” explained Haydocy, the owner of two GM dealerships in Ohio. “For this program to be successful, it’s more important to talk about the money-back guarantee. It conveys confidence in the vehicles.”

“It’s not about the deal, but rather it’s about the world-class products.”

Advertising the Program

Many dealers have promoted the satisfaction-guarantee program through emails and additions to longstanding print ads. Although the cash rebate is a part of most dealers’ promotions, it is not the focal point. Rather, most dealerships have chosen to focus on the “may the best car win” slogan.

Dealers remain skeptical that an emphasis on quality vehicles will bring traffic through their doors, particularly in the aftermath of the Cash for Clunkers program. The Clunkers program brought the sales of dealerships across the country to a two-year high, but customer traffic has substantially waned since the program ended. Dealerships fear that a paltry cash rebate and a marketing vote of confidence in GM vehicles won’t be enough to encourage cash-strapped consumers to buy.

Prohibitive Paperwork

Another potential downfall to the satisfaction-guarantee program is the copious amount of paperwork. Buyers must keep their GM vehicle for at least 30 days, put no more than 4,000 miles on it, and have less than $200 in damage to the vehicle. Although most of the fees buyers paid for the vehicle are refundable, they will not get their trade-in back, nor will they receive refunds on financing, insurance, or registration.