GM Increases Warranty Coverage Across Lineup

Photos

General Motors launches its new warranty with a creative ad campaign. (Photo: General Motors)

Solstice being held down with chains at the launch of the new warranty. (Photo: General Motors)

Expect to see ads on TV, the internet and billboards, plus hear them on the radio. (Photo: General Motors)

Can GMs new warranty really make you fly above the crowd? (Photo: General Motors)

Buick, Cadillac, Hummer and Saab buyers still enjoy a 4-year, 50,000 mile comprehensive warranty, while GMs lesser brands get 3-year, 36,000 basic coverage. (Photo: General Motors)

Extending Warranty Smarter than Pushing Profit Depleting Incentives

For the most part, reliability isnt one of General Motors most pressing problems. Two of its brands, Buick and Cadillac, rate amongst the top 5 nameplates in J.D. Power and Associates 2006 Vehicle Dependability Study (3 and 4 respectively), and four more, one of which is now defunct (Oldsmobile) make the lists top 20; Pontiac, GMC and Chevrolet are positioned within the upper half of a total of 37 brands surveyed. So why then has the General surprised many with one of the most aggressive warranty programs in the industry?

No doubt, adding the incentive of a stronger warranty is more cost effective, at least over the short term, than heavily discounting prices to move product. GM has learned that, while an effective tool in reducing outdated stock, programs such as employee pricing and zero percent financing eat away at the bottom line, eradicating its already thin margins. Whats more, with a history of reasonably good reliability, increasing its warranty coverage probably wont cost all that much more in the long run.

Moving up from one of the least enticing warranties in the industry, at 3 years, 36,000 miles limited coverage (more or less bumper-to-bumper except for the battery, tires, etc.), and 5 years, 60,000 miles powertrain for Chevrolet, GMC, Pontiac and Saturn vehicles, plus slightly better coverage for Buick, Cadillac, HUMMER and Saab vehicles at 4 years, 50,000 miles comprehensive and the same powertrain warranty, GM has extended its powertrain coverage to 100,000 miles for every car and light truck in its arsenal.

“Weve been telling everyone how strong GMs cars and trucks are in terms of value, design, quality and durability. Now were going to back it up,” Chairman and CEO Rick Wagoner said. “This new warranty, combined with GMs outstanding quality, competitive pricing, relevant technologies and a strong new lineup of cars and trucks, provides motorists with an unprecedented level of value and peace of mind.”

Regular readers will note that this is not necessarily the best coverage in the industry, as the Detroit-based automaker claims, with Mitsubishi Motors, Hyundai and Kia the clear leaders at 5 years or 60,000 miles of comprehensive coverage and 10 years, 100,000 miles of powertrain coverage, whichever comes first.

Still, bumping up powertrain coverage an additional 40,000 miles will be positive news to those who drive more than average, and also important to Saturn, HUMMER and Saab customers who dont enjoy the same level of dependability as GMs other brands according to the same J.D. Power and Associates study, which places these nameplates in 31st, 33rd and 36th place out of 37 brands.