Just received this email from John Sternal:
Hi Robert,
With GM’s decision today to offer a 60-day, money-back guarantee on new cars, we figured it would be fitting to ask what kind of reasons a person returns a car within 60 days? There are all kinds of reasons why a person would go through buyers remorse and we see it all the time here in our car lease trading marketplace. Keep in mind that LeaseTrader.com helps a person escape a car lease they no longer want, so we’d like to share the 20 most common reasons why a person would fall out of love with a vehicle – even as quickly as within 60 days.
Is it realistic to think that many people are dissatisfied with a car only 60 days in? That’s one heck of a short honeymoon period. Financial reasons and dissatisfaction may be two of the larger reasons why a person would want out before the honeymoon is over, but here is a list of many other reasons why people would do an about face on their car-buying decision based on actual reasons why people come to LeaseTrader.com to escape a lease:
1) divorce/breakup
2) death
3) health
4) relocation
5) family growthThese first five reasons make up 65 percent of all customer situations. Here are the reasons that make up the remaining 35 percent.
6) deployed to military
7) lost income/job
8) gas prices
9) dissatisfaction
10) disability
11) new company-issued car
12) child went off to college
13) car safety
14) retirement
15) environmental
16) parking too expensive
17) public transportation
18) weather
19) social pressure
20) feature upgrade
Over the years I’ve known 2 guys who bought cars without consulting their wives. 1 car lasted 1 week, the other 1 day. These were bought cars.
Each took it in the shorts bringing them back.
GM calculates that only 1% of all sales will actually go into “buyback”. At time of sale, customer will be offered $500 in lieu of return program. Maximum money back to the consumer is sale price (no greater than MSRP) + sales tax. Customer will not be reimbursed negative equity, aftersell, doc fee etc.
#12 is ridiculous. As if a child going off to college is something that catches anybody by surprise! You only have about 18 years to prepare for it
Sure beats the 10-year warranty that EVERYONE FREAKIN WANTS instead
1A: Any mechanical or cosmetic problem with the vehicle that causes me to return to the dealer, and isn’t accompanied by said dealer bending over backwards to fix same immediately.
Here’s the keys Ray Hutson. No, really. Keep ’em.
Interesting list.
I’m surprised that “it’s a lemon” is not on the list (included in #9?). I would suspect the frustration with frequent problems would be a major reason to return a car.
Twotone
#12 is ridiculous. As if a child going off to college is something that catches anybody by surprise! You only have about 18 years to prepare for it.
Exactly. Plus, if your family goes from 3 to 2 you need a smaller vehicle? Puh-lease.
John
The only reason I could imagine is if someones confused aunt/mother/sister/MIL somehow got bamboozled into paying sticker for a Pontiac G3 or some other craziness.
I’m surprised “saw a better deal elsewhere” isn’t in the Top 20.
As for GM, this deal only lasts 11 weeks, so how meaningful can it be?
What happens to the returned vehicle? Does the vehicle get to drink the CFC death potion? Or does GM resell a defective vehicle (if that’s the problem) to a consumer who is now not covered under the 60-day guarantee?
I doubt the college reason is due to a reduction in people, but is more about the new financial burden. Sure, you could argue they should have planned better, but a co-worker sold his 1yo Lexus to pay for some of his daughter’s tuition when Citibank withdrew from the student loan program last year.
I’m guessing people were counting on loans or work/study programs or whatever to materialize and they didn’t.
As for GM’s 60 day return, I have to wonder what happens to that returned vehicle which is now used. Is GM going to eat the depreciation? How is it going to set the used value so dealers don’t take advantage?
From what I know so far, GM’s doing this all wrong. If every buyer of a new GM product gets this benefit, than certainly some will return cars/trucks for the reasons listed in this article. These were all folks that were buying a GM vehicle anyways.
GM needs to convince the hard-core foreign buyers (like Toyota/Honda types that are on their ninth Camry/Accord) to consider GM cars. A better and more productive program would have required the trade-in of a competitive brand vehicle in order to qualify for the 60-day trial return option on the new GM vehicle. Of course, if you return your new GM product, you don’t get your trade back.
Everyone else who buys GM products just gets the same treatment as before – you own it when it goes over the curb.
Also, a friend of mine could seriously abuse this program. He drives 800-1000 miles a week covering his territory. He could get 2 months of use for basically the dealer and doc fees and probably an oil change without taking the vehicle depreciation.
The real problem with this deal is the tone: we know you are going to be so unhappy with our POS that you will probably return it in the next two months.
Contrast that with Hyundai: We know you’ll love our car so much that you will want to keep it for 10 years, so don’t worry about any major expenses popping up that would force you to get rid of that car you love.
Not that I think anyone actually loves a Hyundai, but it is a lot more positive.
@Detroit-Iron: You’d be surprised, but there are people who are really happy with Hyundai/Kia products. Particularly in the last couple of years, they have made really good cars (and a few interesting ones, as well).
GM bought insurance to protect itself should more people than projected return their new car.
So if you want to stick it to The Man, go out and buy a CTS, Corvette or Camaro, flog it and then return it, lol.
@bleach: The fine print in the deal also limits the mileage to 4000 miles, so your friend wouldn’t really get very far. And in the end, you still end up without a car. But only losing doc fees in exchange for no depreciation is a pretty good deal for the buyer.
Given the evidently poor margin on GM’s cars, one wonders how many extra sales they need/expect from this gimmick to justify the statistical probability of these buybacks, and the subsequently lower resale by the dealer.
I once bought a 4-month-old Grand Voyager that had no problems for years. The dealer’s pitch was that the vehicle was “too high” to step into for the driver. Whatever – I saved thousands of dollars.
Yet another plan we the taxpayer foot the bill for. Remember we are in 70% on this company.
I wonder about the accounting aspect of this. I suspect GM might be valuing topline (number of cars sold) more than bottom line (money made on them).
Sell a new car = increase sales numbers reported to the media, etc. “Our sales were up 50% last quarter, which is a sign that the changes management has made at GM are making a positive impact on the company’s performance, etc. MORE AMERICANS ARE CHOOSING GM!”
Get it back = affects bottom line. So what. No one expects GM to make money, right?
There have been times when GM has obsessively focused on market share to the exclusion of nearly everything else. Now, rather than focusing on being “the biggest in the world,” it is focused on proving that people wants its cars. If you sell 1000 cars, get 900 back, and take a big loss, you can still trumpet in the media that you sold 1000 cars.
I know, it’s idiot logic, but that’s GM.
I suspect GM might be valuing topline (number of cars sold) more than bottom line (money made on them).
GM hasn’t sold cars at a profit in a while. There’s no reason they should stop chasing sales over profits just because of something silly like a bankruptcy.
There has to be more reasons (weasel clauses) you can’t return it than just the $500 in lieu of return. What if it’s in an accident?
What if you don’t test drive it, don’t like it and return it? Every time I read that some people don’t test drive cars, I think dumbshits or it’s an urban myth.
In theory, this will universally drive everyone to the bottom price. “I want to return this car because my friend Joe paid $1500 less for the same car.” Although many will be too lazy, won’t know someone, or will have paid a low enough price that the loss of the doc fees, etc. would make it academic, there is a potential that anyone who buys a car from GM is buying it with a “if you find a lower price in the next 60 days we’ll match it” guarantee.
I can’t imagine dealers being too thrilled with this program. If the car is returned, the dealer has done all the work with zero to show for it. Should they wait 60 days before paying commissions?
“At time of sale, customer will be offered $500 in lieu of return program.”
A-ha! It’s just a gimmick. That $500 will be standard. And $500 off in one place will show up in another. In fact, I assume the dealer will find some way to pocket that $500, if it is real money from GM.
Is it realistic to think that many people are dissatisfied with a car only 60 days in? That’s one heck of a short honeymoon period.
You’ve obviously never owned a GM car, have you?
Reason #21 (and most common): WTF was I thinking buying a GM POS??? Must pass sobriety test before choosing a car brand.
The title of this article is completely wrong.
The question to ask is “Why would Anyone want to own a GM to begin with? Why would ANYONE want to step foot on one of their dealer’s lots…let along spend an 2 hours negotiation a ‘deal’, going back and forth on figures, etc….only to end up with a steaming pile of S*&T???” Why…that’s G-U-A-R-A-N-T-E-E-D!!!
The idea of psychiatric help come to mind….and yes, I believe the so-called “customers” need it…quite badly.
You should be grateful for a momentary appearance of reason…such that they DO want to turn the POS back in…if they can.
The sad thing is that GM is putting effort into marketing BS like this rather than building cars people want and providing a solid warranty to go with them.
Guarantee My Ass
“At time of sale, customer will be offered $500 in lieu of return program.”
That’s not a “guarantee”. You’re basically purchasing Buyer’s Remorse Insurance, and paying a $500 premium for it.
The Math
Suppose an incredibly high 10% of buyers who participate in this program actually return their cars.
GM will have gotten $5000 ($500 * 10) for every one of those returned vehicles. I suspect $5000 will offset a couple of months of depreciation just fine.
Im going to buy a new Aveo, just so I can throw the keys back in their face.
Here’s a reason you wouldn’t want to trade in your 59-day-old GM product, even though you hate it.
Stockholm Syndrome.
Yup, you become the prisoner of a lease payment. At first you liked the car, then you hate it after several lease payments.
Do not confuse Stockholm Syndrome with Trollhatten Syndrome or Goteborg Syndrome. I suffered from both. Those two diseases are caused by excessive repair bills and warranty claims. For older patients, it’s either treated or caused by retreated trips to the u-pull-it lot.
Most people who succumb to Trollhatten Syndrome and Goteborg Syndrome discover their symptoms can be relieved with therapy from Asia.
#12 – Take my sister for example, the day b4 she was to leave for the AF academy she changed her mind (having also not applied for universities in the two states she could have received instate tuition) I’m quite sure that my dad would have returned the car he had just bought her.
So I can say that 12 is a valid reason.
I think they would be better off extending the bumper to bumper warranty to 5yr/50K (and drivetrain to 7yr/100K). That would make people feel better about buying a GM product.
I did it once, i was unsure about buying a saturn sl or ls in 2000. I finally signed for the sl (cheaper) while looking at the silver ls they had…used the sl for 28 days and brought it back at no cost (they had a 30 days satisfaction garantee). Drove off in my silver ls for a few bucks more a month…never regretted it!
#12 is ridiculous. As if a child going off to college is something that catches anybody by surprise!
Most of these reasons are ridiculous. You’d have to be a complete idiot to buy a car without anticipating most of these issues…. either that or you found a better deal and are looking for an excuse to weasel out of the first one.
Having said that, similar marketing ploys have worked for companies like Hyundai and probably won’t do GM any harm.
Why isn’t “I drove a competitor’s vehicle” on the list?
This is a list of reasons associated with lessors having buyer’s remorse, who end up using this lease trader service. May not apply to purchasers.
Considering the length of the list other than dissatisfaction with the vehicle, GM’s 1% allowance may be w-a-a-a-y underestimated.