The Devil is indeed in the details.
GM's return policy may not be worth the hassle
You fell in love with that $22,000 Chevy Malibu because of its color,
style and price. After driving it home, you realize it's not what you
wanted. Maybe it's the way it handles on the highway, the location of
the cup holders or the shape of the seats.
Don't worry. Bring it back for a refund, no questions asked, says GM's
Chairman and new TV pitchman Edward Whitacre Jr.
But is it really as easy as returning an ill-fitting shirt to Macy's?
As with any deal, it's a good idea to read the fine print. As your love
affair with the new car turns to hate, you'll need to drive very
carefully and make sure to limit how many miles you put on the car. And
don't expect your wallet to be made whole even if you follow the fine
print to the letter.
Q : So, I can bring back my car or truck to the dealer anytime?
A : Not so fast. No returns are allowed within the first 30 days of
purchase. It's anytime between day 31 and day 60 of ownership.
That seems like a narrow window, but the policy makes sense for GM.
Buyer's remorse can set in within days for new customers, who grouse
over things like knobs and cup holders appearing to be in the wrong
place. Owners can grow more accepting of problems over time, says Jack
Gilles, director of public affairs for the Consumer Federation of America.
Q : Do I have to cite a defect?
A : No. You can hate the color for all GM cares. But the policy says a
returned vehicle can't have more than $200 in damage -- and GM, through
an inspection, gets to decide what constitutes that much damage.
Q : Wow, $200? Doesn't even a small scratch or dimple caused by
kicked-up gravel cost that much to fix?
A : It's true the cost of vehicle repairs -- even small, cosmetic ones
-- can easily exceed $200. (Repairs covered by warranty are excluded.)
But GM insists it had to set a limit to protect itself from customers
returning badly damaged vehicles and expecting a full refund.
Gilles says the $200 limit is on the low side -- particularly when
coupled with the prohibition on returning before 30 days.
"You combine that with the 30 days, it's easier and easier to get $200
in damage," he says. Plus, with GM making the determination on damages,
"it may appear that the cards are stacked against you."
The lesson for consumers: Be extra careful during those first two months
if you're thinking about returning your new ride. And no car can be
returned if it's been in an accident.
Q : If I keep the car free of dings, I get all my money back?
A : In this case, "money back" doesn't mean all your money. Just the
cost of the vehicle and sales tax.
GM won't refund the title, registration and other fees, which can add up
to several hundred dollars depending on your state.
"It's not really unfair because otherwise you've rented the car for free
for 30 to 60 days," says Terry Connolly, dean of the Ageno School of
Business at Golden Gate University.
GM also won't refund any accessories purchased through the dealer, like
paint or rust protection, aftermarket equipment and the like. So choose
those add-ons carefully if you think you might return the car.
Q : What else do I need to look out for?
A : Don't go on a cross-country jaunt. The new car or truck cannot have
more than 4,000 miles on it. Also, owners must be current on payments.
Forget buying his and hers pickup trucks. Only one return is allowed per
household. In addition, leased vehicles are not covered.
And GM says if you die, no refund.
The program started Sept. 14 and runs through Nov. 30, which is the last
day customers can take delivery of their new vehicles to qualify for a
Q : How does this compare with the Hyundai Assurance program?
A : The Hyundai Assurance program, which the Korean automaker launched
in January, also allows buyers to return their vehicle. But the key
difference is a buyer is eligible only if he or she loses their source
of income. In addition, the policy kicks in after two months of
ownership, but is good for a year.
Q : If I return my vehicle and everything is in order, will I get my old
A : No. According to GM spokesman Pete Ternes, dealers aren't obligated
to return the car you traded in. In any case, after 30 days it's
probably sitting on a used-car lot or in the hands of another driver.
Instead, the dealer will treat the value of your trade-in as money
toward your new car and refund you the full price, Ternes says.
Q : What happens to my returned car?
A : Dealers will put the returned vehicles up for sale on their used car
lots. GM, through an insurer, then reimburses the dealer for any loss he
or she takes on the refund.
Q : How much could this program wind up costing GM?
A : GM bought an insurance policy through the firm cynoSure Financial
Inc. to cover the cost of any reimbursements, spokesman John McDonald
says. The policy was purchased using funds from GM's marketing budget,
which that automaker does not disclose.
Q : With all the restrictions, why would anyone want to participate in
A : Several consumer experts say the hassle isn't worth it, particularly
when you consider that GM is quietly offering an incentive NOT to
Customers who waive the return policy receive a $500 rebate toward the
purchase of their vehicle. The sensible choice seems to be to settle on
the car you really want and take the rebate, says Gilles of the Consumer
Federation of America. "In my book, spend a little more time checking
the car out and take the 500 bucks."