GM: 100,000-mile used car warranties
LAS VEGAS -- General Motors Corp. said Friday it will extend its
five-year/100,000-mile powertrain warranty to used cars going back to the
2002 model year, another move to convince customers that its cars and trucks
are as reliable as those made by its Japanese rivals.
The warranties apply to all GM Certified Used Vehicles and are fully
transferable. They become available March 1.
"This is what you'd expect from a company like GM -- a company that wants to
remain a leader," said Troy Clarke, president of GM's North American
operations who announced the deal in Las Vegas at the National Automobile
Dealers Association annual convention. "Quality will not be a reason for
people to not buy our cars."
The world's largest automaker has made strides in improving quality, but its
cars and trucks still are widely perceived by consumers as inferior to
Japan's Toyota Motor Corp. and Honda Motor Co.
The new warranty covers hundreds of components that comprise the engine,
transmission and final drive assemblies. It applies to all GM Certified Used
Vehicles from Buick, Chevrolet, GMC, Oldsmobile and Pontiac sold in the
A similar offering soon will be made for Saturn vehicles, Clarke said.
The warranty will help GM in its fight to maintain its lead over a surging
Toyota and keep its title as the world's No. 1 automaker because, Clarke
said, a strong reputation translates to sales.
Dealers had been pushing GM to back used cars with a warranty, and the
automaker wanted something that would help it stand out in a market where
overall vehicle quality is good.
"The No. 1 thing a used car buyer is afraid of is problems," said Ed
Bozarth, a Chevrolet dealer with eight Chevrolet outlets in Topeka, Kan.,
Grand Junction, Colo., and the Denver area. "This is a safety net. It's
More importantly, the move is a statement that GM is confident its vehicles,
even used ones, will hold up, said Tom Libby, senior director of industry
analysis at J.D. Power and Associates.
"They would have had to compute the costs of doing this and determined that
the cost was worth it," Libby said. "That right there tells you the quality
GM also plans to bolster the online presence of its used vehicles by adding
Cars.com to its online vehicle-listing program.
The move will effectively double the number of GM Certified Used Vehicles
for sale on the Internet.
Certified Used Vehicles now come with a three-month, 3,000-mile
bumper-to-bumper comprehensive limited warranty.
The powertrain warranty also includes a 24-hour roadside-assistance plan
valid through five years or 100,000 miles.
Owners of Certified Pre-Owned Saabs and Hummers already get a six-year,
100,000-mile bumper-to-bumper limited warranty.
GM has been on a mission to improve the perception of its brands.
Like its domestic rivals Ford Motor Co. and DaimlerChrysler AG's Chrysler
Group, GM is still working to overcome a history of selling vehicles
notorious for their shoddy quality.
Turning that image around is vital not only to sell vehicles, but also to
raise their resale values. Poor resale value makes vehicles less attractive
to consumers and cuts into dealers' profits.
The first major move from GM came last fall when it announced that,
beginning with 2007 models, it would include an enhanced powertrain warranty
of five years or 100,000 miles on all new cars and light-duty trucks.
The company is also making strides in respected quality surveys. Toyota and
its luxury Lexus brand won top honors in eight individual categories in J.D.
Power and Associates' 2006 Vehicle Dependability Study, which measures
customer satisfaction after three years of vehicle ownership. But several
models from GM and Ford also were named the best in their segments.
"I have tried to live my life so that my family would love me and my friends
respect me. The others can do whatever the hell they please."