Due to lack of interest, General Motors is cutting back its 100,000-mile/five-year powertrain warranty for 2016 Chevrolet and GMC models.
Automotive News reports the new warranty will cover the powertrain for up to five years or 60,000 miles, with courtesy transportation and roadside assistance still available for the period. The new standard matches those of Toyota, Ford and Honda. The coverage’s two-year free maintenance scheme will also be cut from four free visits for oil changes, tire rotations et al to just two.
Though the original extended warranty was meant to give consumers more confidence in GM products when first introduced for the 2007 model year, the memo sent out to dealers this week stated the following:
Through research, we have determined that when purchasing a new vehicle, included maintenance and warranty rank low on the list of reasons why consumers consider a particular brand over another. As a result, we have benchmarked our competitors, reviewed our current offerings and have concluded the following modifications to align closely with our customers’ needs and expectations.
Only the Chevrolet Volt will retain the 100,000-mile powertrain warranty for its battery pack and drive unit; Buick’s and Cadillac’s six-year/70,000 warranty will remain unchanged, as well.
Right. Consumers already know GM vehicles have a reputation for excellent reliability and don’t need a warranty.
You would think that in the wake of the ignition switch recalls, GM would actually do the opposite and provide a 100,000 mile bumper to bumper warranty (or best in the business warranty).
Except, this is GM we are talking about. #gmdeathwatch
From what I read elsewhere, the reasoning for dropping the warranty and free maintenance was that they were not part of the buying consideration customers used to make the decision to buy a GM product.
IMO, patriotism and the Buy American credo were the greatest motivation to buy a GM product; A feeling by GM buyers who believed that they single-handedly helped save a bankrupt and dead auto giant with bailouts, handouts and nationalization, with their taxes.
I think the reason for the cutbacks in warranty and free maintenance was the added costs that the bean counters had to figure in on each GM product in order to cover all the warranty expenses that would be needed, and the costs involved with the “free maintenance”. No free lunch. The buyer saw this added expense folded into the acquisition cost/transaction price of the vehicle.
The irony is of course, that even without the warranty and free maintenance, the MSRP of GM products has not come down.
And then there are all those recalls waiting to happen in the distant and not so distant future.
Why would anyone in their right mind want to expose themselves to all that?
Yes……….I can see a customer saying “No, I don’t worry about maintenance and repair costs”. sarcasm on…heavily on.
This is just a money grab. Warranty costs money. If you want the extra coverage you will have to pay extra for it.
GM is trying to figure out a way to get the consumer to pay for the ignition switch fiasco.
….Why would anyone in their right mind want to expose themselves to all that?….
Strap yourself in a C7 and your brain starts saying what recalls…CR even gave it an average reliability rating and a Recommended….but to tell the truth, I did buy the extended warranty because I will time out the factory warranty long before I mileage out….and all that stuff that makes the car so awesome looks awfully expensive to replace…
golden2husky, I’d love to strap myself in a C7 but I have neither the flexibility nor the reflexes to do it justice nor be able to enjoy the adventure.
Trucks are my game, my toys.
In the vernacular of lovers of the finer things in life, today, at my age, I see a sports car as pre-mature ejaculation, and pickup trucks, SUVs, CUVs as a trip around the world with a very happy and satisfyingly draining ending.
GM – Increasing their vehicle content of shifty supplier sourced components (most from China), ruining completely whatever few good “heritage/attributes” marques such as Cadillac (interior room, plush ride, boldness) had remaining, and actually working to undercut their own parent corporation’s image (e.g. Cadillac moving HQ to New York b/c Detroit holds an “unsavory” image).
Phukkin’ GM. Incompetent since AT LEAST 1975, blew massive cash & market share (51%), bailed out by taxpayers, could never successfully produce an entire vehicle that lasts in ways a Honda does, lost any styling sense a loooong time ago, found new, interesting ways to have people die in their vehicles (.50 cent ignition cylinder switches, known of for 10 years), etc.
what a trite biased BS response—^
hmm…that’s interesting. Although it must be said, that warranty is still longer then Holden’s warranty, which is a 3yr/100,000km warranty (which is extendable, of course) excluding the Volt’s batteries, which have a 8yr/160,000km warranty.
There’s also lifetime capped servicing under a new scheme announced not too long ago. Although that lifetime capped servicing scheme will cover every Holden ever made as they announced. Although it’s not entirely comparable, I admit, GM’s warranty is still longer.
Link’s here: http://www.holden.com.au/ownership-and-servicing/servicing/lifetime-capped-price-servicing
GM dealers are pissed off for the loss in add on warranty sales. Toyota does not offer a that warranty, they are masters of the add on warranty.
Interesting. It is surprising how many customers don’t compare warranties between new cars of different manufacturers when shopping. Most people probably couldn’t tell you what the warranty is on their car. However, when things break after the end of coverage, they care really quickly.
If I were GM, I probably would have kept it as it was as a customer sat initiative. Long warranties do end up as a selling feature for sh1t tier brands used to justify a purchase, but among mainstreams GM is probably right that it’s not high on the list. We’ll see how this pans out.
We only care about warranty if we don’t trust the brand. But if you don’t trust the brand, why buy?
When buying the CRV and comparing to Hyundai I never cared about their warranty as I don’t plan on needing it. The HK warranty is BS anyway.not transferable, which would have been good for resale. And from experience I know when something is not outright broken, but a general flaw (rattle, shifting) they say that is normal.
The 10/100 warranty that Hyundai/Kia offers doesn’t transfer…true. So where’s the numbers that just because the 100K warranty doesn’t transfer that affects resale? The 10/100 then becomes 5/60 for powertrain AND the bumper to bumper.
And from experience they’ve never denied anything I’ve asked. Including adjustments which are not covered 1/12K.
The Hyundai/Kia warranty is virtually useless if it’s not transferable, unless you’re one of the three people who buys new and keeps it for 10 years
I had a Hyundai Getz that I was only able to shift in 2nd gear when reving up 1st gear a lot. Dealer told me that is normal…..
You may not plan on needing it, but sure wished I had it when my Element’s manual tranny needed replacing at 88k miles for $3000.
It’s just another sign of the short term thinking by many car buyers. If you don’t expect to keep the car beyond 3-5 years, the difference in warranties don’t matter much.
Hope the people buying these things with 7 year loans take note.
ClutchCarGo – when I purchased my truck the sales manager said that the average turn around on a pickup was 38 months. I told him I see him again 3 turn arounds from now. He didn’t think that was a funny comment to make and lost interest in talking to me.
A long warranty doesn’t matter to the 38 month crowd.
I see Ford advertising “Get a new F150 every 2 years”.
Does that mean Ford will shorten their warranty too?
Another point is that it’s difficult to sell added-cost, profit-laden extended warranties and service contracts on vehicles that already come with a long warranty as standard. There’s lost revenue potential there too.
The last extended warranty I ever bought was in 2001 on my Avalanche. I lost – big time. The only thing that ever broke out of warranty was an axle seal – which was way less to repair than what I paid for the extended warranty.
Haven’t bought one since and so far, knock on wood, I’ve come out ahead in the out of pocket repairs department.
Cars are just overall a lot more reliable.
I bought an 2-year extended warranty on our 2012 Grand Cherokee from Fiatsler, and never used it.
I only bought it because I knew my 23-yo grand daughter would be driving the car and didn’t want her to be burdened with any break down expenses.
As it turned out, nothing has broken yet. Car still runs good with >75K on the clock today.
Buying an extended warranty is a waste of money if you never use it, but buys peace of mind if you buy it for that purpose.
You bring up a good point. If I look back at all my purchases a 5/100 warranty would crater out for me at the 5 – not the 100 – not even close on the 100.
The average American slob drives around 13K miles a year, that’s 65K miles over 5 years. I still think the positioning from GM is a big ball of corporate double speak covered in stinky crap and the tears of Cobalt owners.
If the “average” owner is cratering out the 5/100 more at the 5 year mark and not the 100, the percentage of owners going from 61K to 100K in five years would statistically get smaller and smaller as you climb the mileage ladder. So the cut is still complete crap – it screams, “we have a lot of problems at 61K miles and above, and even though these people are driving above average, it’s costing us.”
APaGttH – the Forest Resource company my brother works for finds that pickups used in rough environments tend to start costing a ton of money to keep running around the 80,000 to 100,000 km mark (50-62.5k miles).
It fits the pattern that GM is doing this strictly from a cost saving perspective.
“we have benchmarked our competitors”
Right, and God forbid you should actually try to surpass your competition. After all, everyone knows that having the best warranty in the business did nothing for Hyundai.
Toyota could probably roll back their warranty to 3/36 and get away with it. People don’t expect to need to use their warranty much with a Toyota. GM is not Toyota.
I assume GM Accounting got scared of all the cost. Like if VW gave a long warranty they’d be bankrupt.
My sentiments exactly. Plus the projected costs for the current recalls will be somewhat mitigated by limiting the costs of future warranty claims.
All in all, a pretty shrewd accounting measure.
Now, if GM could only make products that are as good, and sell as well, as Toyota.
Ye olde “Caveat Emptor” still applies to GM today.
If you want better than a benchmark, you must step up to Buick or Cadillac sir. Chevrolet is for the common, no-nonsense man on a budget.
GM trumpeted a new commitment to quality and customer care saying it would increase its key parts Mechanical Mean Time to Failure (MTTF) from 130,000 to 160,000 kilometers coincident with introducing a 160,000 kilometer 2007 powertrain warranty. The undertaking was shortlived. By 2010 the warranty had been downgraded. Now, commencing with the 2016 models, it will be reduced to 100,000 kilometers.
The cars are still not as good as competing Asian products and most people know it.
I’m surprised it’s been 8 years since GM extended the powertrain warranty. Time flies! I don’t think it’s that big a deal to dial it back to 60K miles given that the length of the warranty in time remains 5 years.
I’m not sure if I would have bought my Sierra without the 100k warranty. One nice thing about the GM 100k power train warranty was that it was transferrable to future owners (Hyundai/Kia’s 100k warranty is NOT, unless the used car is bought certified). That was always a selling feature I brought up when selling used GM vehicles on our lot.
“Due to lack of interest….”
Nonsense. More like “Due to much higher than anticipated costs……”
Yeah… “Lack of interest” made me do a double take.
LOL, wut?
love the word “benchmark”. One has visions of a dedicated team of specialists toiling away, gathering reams of data, comparing this and that, agonizing over minute details.
Reality is, they asked the office factotum and general dogsbody to spend 15 minutes on the Internet to print out Ford and Ram’s warranty.
Benchmarking. Yeah, that’s deep.
Ram’s powertrain warranty is still 5/100. So much for benchmarking.
And……………, the best powertrain combination of the RAM is the 5.7L version, regardless of incarnation. Virtually bullet-proof, reliable, durable, enduring of maintenance-neglect and long lasting.
People who own those RAM trucks drive the p!ss out of them, although to own one a person has to be totally indifferent to the cost of gasoline, especially if doing any kind of towing or hauling that requires all eight cylinders to be operating all of the time.
Then again, who buys a truck, any truck, for mpgs and fuel efficiency?
“Then again, who buys a truck, any truck, for mpgs and fuel efficiency?”
Some customers. It’s up there at 3rd or 4th on reasons to buy as shown by market research.
danio3834, I have never seen that list or a reasonably authentic replica thereof.
I have heard of all sorts of “lists” compiled by fee-for-service entities, but they were all skewed in favor of the entity that paid for the research.
Something along the likes of Nielssen or JDP where there is something for everyone in their findings.
But honestly, I have never heard of anyone shopping for a pickup truck having fuel economy as a criteria in their buying decision.
Please, if you have the time, would you launch me in the right direction with a link or reference point?
I wanna learn more about people seeking fuel economy in pickup trucks.
What’s next? Twin Turbo 3-cylinder engines in the F150?
Sorry, this article is unclear.
Is the warranty in question the standard no-additional-cost warranty, or is it an added-cost extended warranty?
Some of the comments above, and some statements in the article, seem to be based on the assumption it’s the standard warranty, and some on the assumption it’s an extended warranty.
The implications are drastically different between the two scenarios.
The warranty they’re talking about is the current standard powertrain warranty that comes with each vehicle at no extra cost. To get this coverage going forward, customers will have to purchase an extended warranty.
The cost of the warranty is already figured in and is spread over the projected number of vehicles, based on a statistical mean derived from actual warranty service performed over a given history.
Bean-counter domain, this. This is where bean-counters really shine — profit and loss centers, or where the cash-cows get separated from the herd.
Some vehicles need warranty work done, others never. The costs are projected and spread over all of the vehicles produced, regardless.
So every buyer pays for what only a certain percentage of buyers will need.
With the 2-year free maintenance it is a little bit different because every buyer is expected to use it, so the total costs are already figured in to the transaction price.
And OEMS do this to ensure the trackability of the vehicles they sell, by downloading the OBDII at these free service visits. A wealth of vehicle information is stored in OBDII memory.
OEMs and dealers just hate it, absolutely hate it, when buyers perform their own regular maintenance and service. Not only do they lose that opportunity for making a little bit of money, but they lose track of that vehicle and cannot monitor its progress as it ages.
I get that dealers are driving the bus more than they should. That’s probably where the lack of interest resides. They feel they’re losing money on the back end.
Instead they should be doubling down on the warranty and maintenance perks. If the dealers don’t like it they can give up their franchise.
It’s my understanding that GM in the US wasn’t planning on Pontiac “me-too” versions of the Cobalt and Aveo ten years ago, but dealers wanted it so we got G5s and G3s.
After some further research, it looks like this is purely a cost cutting move as GM increased their warranty reserves YoY at the end of 2014 by 34%. This indicates they see the wave of repairs continuing to rise in the near future.
LLN had this additional gem from the brain trust at Ren Cen.
…”We will reinvest the savings we will realize into other retail programs that our customers have told us they value more than these,” a spokesman said, without elaborating…
Jesus tap dancing Christ in a birch bark canoe are you kidding me? What a pant load of corporate double speak. What a steaming pile of you have to be kidding me.
The savings will be reinvested in further stock buy backs to put a smile on the face of institutional investors at the expense of safety, R&D, and product quality.
Fire up the GM death watch – oh they got money in the bank and product is selling, and it sure seems on paper they’re profitable – but it seems pretty clear that nothing has changed at Ren Cen.
Money saved? So does that translate into the bean counters ran their math and went, “holy crap, we’re paying a lot of money on warranty claims from 61K to 100K miles – we should kill this program!”
On included maintenance here is a little advice – buyers might actually care if you, oh I don’t know, actually advertised you had included maintenance in the first place.
“it seems pretty clear that nothing has changed at Ren Cen.”
This is news?
No, just further evidence.
I had all the oil changes and and other drivetrain fluids serviced at the dealership where we purchased our 2007 ‘Hoe. Solely because I wanted proof that all engine/driveline maintenance had been done to factory specs in the event that something went wrong.
I would think I’m not unique in that respect. So GM dealerships will lose service work they normally would get because of this. The ‘Hoe has a 108K on it and will probably never see a dealership again when I need work/maintenance done on it.
I bought the maintenance package on my F150 for 2 reasons. it gave me a “free” year of extended warranty and was basically a warranty on the brake pads for 100,000 km. In the past brakes have been an issue of F150’s.
I get a new set of wiper blades out of the deal every year and a tire rotation at each visit.
I know a few small business owners who went with the same plan and it gives them a predictable amortization of operational costs.
The time and mileage figures on my somewhat newer GM vehicles:
2001 Buick Park Avenue – 32,000 miles
2005 Buick Terraza CXL – 64,000 miles
2006 Buick Rainier CXL – 41,000 miles
2008 Buick Lucerne Super Wildcat – 31,000 miles
So yes, I did like the GM warranty as it came in handy during the five years on the 2008 Wildcat but I drive less miles now than when I lived in the high desert.
If GM offers the 5/60,000 miles warranty on their next Buicks I’m still a buyer.
Why?
Because I ONLY buy GM.
The longevity of my Toronados, Rivieras and Eldorados is enough evidence.
Ah, yes, Jeff, my Toronado was something to behold, drive and admire from afar.
Absolutely loved that 455!
“2008 Buick Lucerne Super Wildcat”
I had no idea this was a thing.
edit: I see from a Google search that you created this model yourself.
Yes, I had a 2007 Buick Lucerne CXS “Wildcat” on a 3 year lease. When the lease was over I retained the original emblems from 1965 and installed them on my 2008 Buick Lucerne Super “Wildcat”. I had visited Wikipedia to add the information about a “2007 Wildcat spied in Orange County, California” and that information was removed two months later!
I had actually forgotten GM offered that. They sure hadn’t been making a big deal about that for a while.
Call me crazy, but I get the distinct feeling that this is is because of GM planning to switch to turbo engines…
Maybe CVT planning as well?
All warranties are added to the price. In a perfect world, cars would come with no warranty and you would buy one based on your needs (miles per year and length of ownership). But customers are suckers, so included warranty appears to “add value” without adding cost in their minds. Maintenance is the same thing, only a bit sillier. Four oil changes retail is what, $160? Toss in a free air filter or something and make it $200. Not a reason to buy one car vs another, but customers are suckers for the word “free” even when it just means “included”. 100k for 5 years is 20k per year. Most people never would use this. The bumper to bumper is the only thing I even consider to have a understandable value to use figure. Also consider leasing customers, which is a direction more and more new cars are heading. Lease customers don’t care to pay for a warranty beyond their planned ownership.
How can the reduction of a warranty be in the interest of the consumer?
How can a lack of interest be the logic behind such a decision?
The decision is purely based on GM’s bottom line. It will save them money, with little concern for the consumer.
According to the company’s 10-k, warranty expenses went up about a billion dollars last year, roughly 30%. See note 13.
Nothing to see here folks. The consumer WANTS to undertake an additional billion dollar expense.
Just Checked Ford’s 10-k. They report warranty visits are down 66% since 2005. Their report came out last May, in fairness, but still…..
Tells you something about GM. A normal company tries to limit warranty expense by building a better product. GM’s approach to unexpectedly high warranty expense is to cut the warranty. Good old GM. Hasn’t changed a bit.
well my 2010 Malibu will be adding to GM’s warranty expenses as it’s transmission (6spd Daewoo automatic) just gave up the ghost this past Friday at 86k miles. It went the first time at 27k. So maybe the 3rd time is the charm?
In addition to the above comments which I agree with most. I think this is a ploy to boost sales this year, kind of a ” better buy your GM car/truck now before the 100k warranty goes away”. This might cause hesitant GM loyals to buy a new GM vehicle sooner rather then later. If sales start to fall they could always bring it back if needed. Of course this is just a theory.