60 Day Satisfaction Guarantee Dealer Participation Agreement
On Monday, September 14, 2009, GM will begin to offer a national 60 Day Satisfaction Guarantee program to eligible customers. The Program will be announced initially through November 30, 2009. As a dealer, your full participation in this program is absolutely critical to the Program’s success. The terms and conditions of your participation in the program are fully explained below. We urge you to participate in this exciting Program designed to help drive traffic and build confidence in you and in your products. Starting on September 11, 2009, dealers can go to www.gmprograminfo.com to opt-out of this program. Click on the “GM 60 Day Guarantee Program” button, and then click on the “I Decline Participation” button at the bottom of the page. If you do not opt out of this Program by the close of business Tuesday September 15, 2009, you are participating under the terms and conditions described below.
Each participating dealer agrees to the following terms and conditions.
1. Program Documentation. The Program is fully described in a set of Customer Terms and Conditions available to you atwww.gmprograminfo.com. As a participant in this Program, you agree to provide to each consumer, prior to the sale or delivery of an eligible vehicle, a copy the Customer Terms and Conditions. Delivery of these Customer Terms and Conditions prior to a sale of the vehicle is a critical aspect of your participation. Each and every customer must be offered a free and clear opportunity to take advantage of the 60 Day Satisfaction Guarantee.
2. Cash Back Alternative. Each eligible customer will also be offered the opportunity to select a $500 cash back alternative, in lieu of the 60 Day Satisfaction Guarantee. The customer will therefore have 2 options under this Program: (a) participation in the right to return the vehicle under the 60 Day Satisfaction Guarantee, or (b) $500 cash back. You agree to fully explain these choices to the customer, and to allow the customer to select the option they desire. You must explain both choices and leave the decision to the customer. Dealers who choose not to participate in the 60 Day Satisfaction Guarantee will not be able to offer the cash back alternative to their customers.
3. Buyback Price and Acknowledgement Form. Buyback Price means the actual price the customer paid to you for the eligible vehicleitself (after any rebates, discounts, employee discounts, or supplier discounts) plus applicable sales taxes you actually paid. Prior to the delivery of the vehicle, you agree to prepare and explain to each customer who chooses the 60 Day Satisfaction Guarantee, an Acknowledgement Form, which will help the customer understand the Buyback Price that will apply if they later choose to return the vehicle. You must ensure that the customer and an authorized representative of your dealership both sign the Acknowledgement Form. You must deliver a copy of the Acknowledgement Form to the customer and retain another copy in the deal jacket. You must also email a scanned copy of the Acknowledgement Form to CFI at redemption@cynosurefinancial.com. The Buyback Price is after any applicable cash rebates or incentives and is intended to pay the customer only for the factory-equipped vehicle they purchased, plus any applicable sales tax they paid. Nothing else is included. The Buyback Price does not include the costs of any taxes (other than sales taxes), licensing, titling or registration fees, insurance, dealer installed accessories, aftermarket products or add-on equipment (other than factory options ordered with the vehicle), dealer fees of any kind, extended warranties or service contracts, finance charges, any negative equity (the amount by which a loan on a trade-in vehicle exceeds the dealer’s purchase price for the trade-in) or any other expenses incurred by the Buyer in relation to taking delivery of the Eligible Vehicle.
4. Limit on Price. In cases where the customer chooses the 60 Day Satisfaction Guarantee, you agree that the retail price for the vehicle itself, excluding the items described above, and therefore the Buyback Price will not exceed the Manufacturer’s Suggested Retail Price of the eligible vehicle plus sales tax.
5. Discounted Sales. For Vehicles Purchased under the GM New Vehicle Purchase Program (GMS) or the GM Supplier Vehicle Purchase Program (GSU), the Buyback Price is the GMS or GSU price listed on the Customer-Dealer Agreement Sheet (after any applicable cash rebates or incentives), plus sales taxes. Other items as listed above in paragraph 3 are not covered.
6. Return of Vehicle. As a condition of your participation, you agree to repurchase and accept delivery of and title to any vehicle returned by a customer under the 60 Day Satisfaction Guarantee which meets the Customer Terms and Conditions and to pay the customer the Buyback Price in accordance with the Terms and Conditions of the 60 Day Satisfaction Guarantee and the Acknowledgement Form executed when the vehicle was delivered to the customer. You may not resell the returned vehicle to the customer or any member of the customer’s household. You also may not resell the customer a vehicle he/she previously traded in when they bought the eligible vehicle.
7. Claims and Compensation to Dealer. The administrator of this program is cynosure Financial, Inc. (“CFI”). Upon submission to CFI of completed claim forms from you, and fulfillment of the conditions below, CFI on behalf of GM will pay to you an amount equal to the Buyback Price for the vehicle less:
a. On a 2009 model, sixty seven percent (67%) or on a 2010 model seventy four percent (74%) of the vehicle MSRP for each eligible vehicle returned under the Terms and Conditions of the 60 Day Satisfaction Guarantee;
b. Sales tax; and
c. $1,000 (which will be payable upon delivery of the returned vehicle to a subsequent purchaser as described in paragraph 8 below).
The resale of the returned used vehicle to another purchaser, and any related loss or expense, is solely your responsibility. The terms and conditions applicable to your receipt of the initial payment are:
i. You must pay off any lien on the vehicle;
ii. You must provide a copy of an appraisal from an approved appraiser to CFI; and
iii. You must provide any other documentation reasonably requested by GM or CFI to verify that the vehicle is eligible for the 60 Day Satisfaction Guarantee.
8. Disclosure to Subsequent Purchaser. Upon the return of an eligible vehicle under the 60 Day Satisfaction Guarantee, and submission of a claim to CFI, Morley, Inc. will contact you with information about any title requirements and disclosures to subsequent purchasers in your state. Upon submission to Morley of documentation demonstrating that appropriate title requirements have been met and appropriate disclosures were made to any subsequent purchaser, CFI on behalf of GM will pay you an additional one thousand dollars ($1,000.00). You are responsible for ensuring that all disclosures to subsequent purchasers comply with all applicable laws and regulations and that appropriate title requirements are met for vehicles returned under the 60 Day Satisfaction Guarantee.
9. Program Administration. The Program is administered by CFI. You agree to cooperate with CFI in the implementation of the Program in regard to each of the following:
a. Scheduling appraisal appointments for returned vehicles;
b. Processing vehicle returns
c. Providing supporting documents, including an executed Acknowledgement Form
d. Assisting in paying off any lien on a returned vehicle
10. Sales Tax. You are responsible for obtaining a refund, if applicable, from any state and local taxing authorities if you so choose.
Gosh, another GM program run through cynoSure, just like Total Confidence. I wonder about the connection there…
A big question: having been titled to a customer–unlike a demo, for example–can GM dealers put buy-backs back on their floorplan (new vehicle inventory financing)? Or, in addition to assuming the carrying cost (and risk) of the sales tax rebates and the thousand bucks (that supposedly gets refunded when the car is resold–wtf?) do dealers also potentially get left holding the bag to finance a bunch of very late model used cars?
I feel fortunate that all we had to deal with when I was a car dealer were old-fashioned rebates and traditional subsidized financing! In a multi-franchise store, at times it was hard enough keeping the sales people up to speed on all the offers. I can’t imagine the information (and most definitely misinformation) that must flow through the typical new car sales department these days.
After seeing the details of this, I’ll throw my lot in with those urging GM to forget about overly-clever sales gimmicks and just increase the damn warranty on their product.
Jeeze… part 7 sure sounds like GM is screwing the dealers to me. Unless I am not reading it correctly.
It looks to me like GM is only going to return a 67% or %74 percent of the price of the car. So I assume the dealer has to eat the gap there.
And the dealer has to wait for the state to refund the sales tax, however long that takes. Yea, I’m sure the tax department bends over backwards to issue refund checks.
It doesn’t say where the $500 discount for customers who decline comes from. It doesn’t say that GM will reimburse the dealer for that money. It sounds like the dealer just has to offer it.
It doesn’t say how long GM or their insurance company has to pay a claim. What if they sit on it for months? Can the dealer tell the customer “You’ll get your money when I get mine”?
I dunno… If I were a dealer, this sounds like nothing but trouble to me.
My predictions on this blackmail scheme:
1. Since the buyer is effectively purchasing the money-back guarantee for $500, the return rate of buyers opting for this guarantee will be very high.
2. In the aftermath of CFC and its complications for the dealers, many dealers will not sign up for this program, and will provide equivalent or better offers to potential customers. This just looks like another opportunity for the dealer to get bilked. The paperwork just isn’t worth the few extra sales.
Who would want to be a GM dealer in these times?
So the plan is to buy off as many customers as possible for $500.
Have I totally misunderstood 7(a)? But to me it appears that the dealer only gets:
– 2009MY approx 33% (100% Buyback Price -67% MSRP)
– 2010MY approx 26% (100% Buyback Price -74% MSRP)
plus they own the vehicle to resell!
Is that correct!!!???
It looks to me like GM is making its DEALERS stand behind its product. “We’re so sure you’ll love your new GM vehicle that if you don’t like it, you can bring it back and your dealer will suck up the loss and try to re-sell it as a used car to someone else.”
Lovely
yankinwaoz: Other way around. Basically, if the customer returns a car the dealer gets to keep the fees and GM pays them 26-33% of the purchase price plus $1000.
On the surface, that’s not too bad…but lightly used cars are really hard to sell without significant discounts, as buyers are justifiably wary. The real scam is that once the initial sale is made it’s the dealer’s problem and GM gets to count it as a sale, regardless of whether it’s returned later.
Durr, I’m retarded. GM pays them all but 26-33% of the purchase price, to cover depreciation. The dealer keeps the car.
Who eats that 26-33%? Taxpayers?
Is this plan vulnerable to making GM eat the depreciation on those 60 days for nothing, made especially easy if the buyer is related to the dealer?
1. Buy new car
2. Return car immediately
3. Re-buy car with 26-33% + 1K discount
Does the owner gets a new car and a big discount for the pain of going through the process here?
I love the fact that they are basically offering customers “regret” insurance for $500. Anyone that falls for this is a complete idiot. 1) If you are concerned about buying the car… enough that you’d think you’d possibly want to return it… maybe you shouldn’t buy it in the first place. 2) You are paying for a $500 insurance policy in case you hate the car! It clearly isn’t free!
It is a gimmick to get people in the door, nothing more, nothing less. It actually reduces my faith in GM products considering that they are “standing behind their product” by selling you an add’l insurance policy.
I wonder if a customer could game this program to their advantage to get out of a used car they did not like. Step 1, Buy an expensive car, and negotiate in a way to take MSRP on car, but get a high trade in value. Step 2, return car after 30 days. Step 3, buy something else used. I have a car I bought off ebay a couple years ago that has been having too many issues, wonder if this is a chance to stick it back to GM. ( I guess this would be sticking it back to the taxpaying public.)
The $500 extra rebate is a smart move on GM’s part. As for the “regret” insurance not being free–of course it’s not free. Do you think that the “free maintenance” included with some cars is free? Nothing that costs an auto maker money is free–the difference here is that if you don’t want to pay the cost of this program, you don’t have to.
I am interested in knowing the percentage of people who opt for the insurance rather than the $500.
The flaw in the amount the dealer is paid, which initially appears generous, is that every dollar in rebates appears to come from the dealer’s pocket. They should give the dealer some fixed percentage of the buyback price. If the buyer gets a large discount plus large rebate on the car, the dealer will get much less than if this wasn’t the case.
Other than that, looks like a fine way to handle this to me.
“Does the owner gets a new car and a big discount for the pain of going through the process here?”
I think it’d be up to the dealer. I didn’t see any language in the program prohibiting it. But, a dealer is not going to go through the return & resell paperwork for nothing.
“Have I totally misunderstood 7(a)? But to me it appears that the dealer only gets:
– 2009MY approx 33% (100% Buyback Price -67% MSRP)
– 2010MY approx 26% (100% Buyback Price -74% MSRP)
plus they own the vehicle to resell!
Is that correct!!!???”
You have it backwards. Dealer gets 67% and 74% respectively.
Now I am more confused.
So the dealer now owns the car AND they get 74% percent of the original sales price? So they then turn around and sell it as used. This means the dealer gets a lot more money if the customer returns it.
So if they sell a new car for $30k, take it back a month later, they get $22.2k from the insurance, and they get to sell the car, let’s say for $23k, as almost new. That means the dealer pockets $53k for a car they paid only, lets say, $25k for.
Wouldn’t that give a perverse incentive for a dealer to try to get customers to return their cars?
The program prohibits selling the same car back to the customer as used. But the dealer can sell the customer ANOTHER returned car. If they can get enough customers to participate in such a scheme, the dealer could make a nice profit from insurance claims alone, and the customers would end up with very cheap, slightly used cars.
Here how this works. Two customers work with the dealer. Each customer buy the cars the OTHER customer wants. One month later they both return their cars and buy the other as used for a fraction of the original price. Both customers go home in the car for less than they could have got anywhere else. And the dealer makes more money than it would have with just a straight up sale to each.
I admit I’m still a little fuzzy on the math here. But leave it to TB&B to tear this thing apart, looking for the (loop)holes.
This program looks just buggy enough to have been “suggested” (in a Chicago way) by GM’s overlords, no?
I don’t like this whole thing. Why third party administration of a program. Smells like pocket lining to me. Just stinks!
ca mon, GM can’t administer this program themselves?
ran the numbers today at work and FAIL is the address where GM can mail the details.
The problem is the way the text is worded above. It definitely says
“CFI on behalf of GM will pay to you an amount equal to the Buyback Price for the vehicle less:
a. On a 2009 model, sixty seven percent (67%) or on a 2010 model seventy four percent (74%) of the vehicle MSRP for each eligible vehicle returned under the Terms and Conditions of the 60 Day Satisfaction Guarantee;
Meaning = Buyback price minus 67% or 74%.
It also says: “You must pay off any lien on the vehicle”. Which I dont even understand how the dealer pays of the customers note when they dont have the reimbursed funds yet.
Makes no sense.