Wednesday, February 14, 2007

GM: 100,000-mile used car warranties

Saturday, February 03, 2007
GM: 100,000-mile used car warranties
Automaker will extend engine guarantee on certified used vehicles.
Sharon Terlep / The Detroit News

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 United States.

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 huge."

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 is up."

GM also plans to bolster the online presence of its used vehicles by adding 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.

You can reach Sharon Terlep at (313) 223-4686 or

© Copyright 2007 The Detroit News. All rights reserved.


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