GM to cut powertrain warranty to 60,000 miles

[LoneStar1]

http://finance.yahoo.com/news/gm-cut-chevy-gmc-powertrain-warranty-60-000-143947688--finance.html

DETROIT (Reuters) - General Motors Co said on Thursday it plans to cut its powertrain warranty on Chevrolet and GMC vehicles for the 2016 model year because the offer was not a strong enough selling point.

The five-year, 100,000-mile powertrain coverage, in place for nearly a decade, will be reduced to five years and 60,000 miles for the 2016 models.

The Detroit automaker said it also will scale back its offer of two years of free maintenance, including oil changes and tire rotations, on most new Chevy, GMC and Buick vehicles. The brands will reduce the number of free service visits to two, from four, starting with 2016 models.

[tatest]

Warranty and prepaid service are sales tools, they carry a cost, that cost makes it into the vehicle price.

Reduce the warranty cost, lower the price. Lower price is another sales tool.

This is all pretty much a marketing decision. Chrysler, before even the first bailout in the 1970s, introduced longer warranty periods to help overcome a market perception (based on 1950s - 1960s buyer experience) that Chrysler Corp cars weren't lasting as long as those from GM or Ford. May not have been real, but it was a perception that marketing had to deal with.

Hyundai was the first import to use the warranty tool for the same purpose, trying to overcome the perception that Korean cars could not be as good as Japanese cars. It helped them gain market share, even before the actual cars started catching up in features, styling, finish and performance. More market share helped them recruit more dealers as well.

We've been in a warranty numbers race. 50,000 vs 75,000 vs 100,000 miles hardly means anything to the original buyers, and I think the manufacturers are starting to figure that out. 50,000 from Chrysler when everybody else was still at one year/12,000 or less, that was enough to help pull them out of a hole.

[colliehauler]

Ford Man wrote:
If I owned a GM I would want a Lifetime Warrantee on it.

Yours or the company?

[Ford_Man]

If I owned a GM I would want a Lifetime Warrantee on it.

[LimogesMan]

Lessmore wrote:
...snip...
My experience test driving new vehicles from GM, Ford and Chrysler demonstrated very clearly to me, just how good new vehicles from these three companies are nowadays.

I wasn't interested in testing other manufacturers vehicles, as have found that the domestic manufacturers' vehicles generally have more comfort, leg and shoulder room for larger guys, with bad 'hockey' knees like myself. 😄

Les

Well said. I agree about comfort.

J.

[FishOnOne]

A guy at work has a 06 (?) RAM 1500 has the factory lifetime unlimited warranty on his RAM truck. I think all he has to do is bring it in to have it inspected and check maintenance records.

[mich800]

Ironically, it doesn't really matter what the mileage limit on the warranty is. Inevitably something will fail just outside this period no matter what it is and the consumer will be angry.

[Hannibal]

I've thought for quite a while that the 100k mile warranty, while I like it, was a stretch by the manufacturers. Just the same, I'm glad I haven't needed it for my F250 with 83k miles on it, my rattle free and trouble free Prius Xsp with 30k miles or my previous Hemi powered 2500HD with 120k when I traded it.

[Paul_Clancy]

GM has been aggressive about recalls since the ignition switch issue and these have no doubt cost money. Personally I will give up that mileage if I know a safety issue is covered pro actively and off warranty. I feel the general drive train quality is very good and warranty failure is rare. What does fail are rubber inter cooler boots -water hoses and belts -wear parts affected by heat. Not warranty anyway after the 3 year.

[Gr8life]

Ford, GM, Toyota, and all the other manufactures can come pretty close to estimating the effect on their bottom line of changing a vehicle's features. If they thought that it would improve profitability to warranty a rear axle housing for 200,000 miles, they would do it. Would cost them almost nothing.

Only three or four contributors on here want to purchase a GM product and care about the 100k warranty. The rest don't care or are not going to purchase one anyway.

[down_home]

We drive about30,000 miles a year per vehicle except the little black car about 10,000.
A 100,000 mile drive train warranty is a strong selling point. It means something breaks don't have to dig into you pocket big time.
They are doing just like everything else. They want you to buy another disposable three years down the road.
Cutting the warranty will cost them some sales no doubt about it but they figure they will sell more vehicles, as Customers don't want to hang onto something that might cost an unplanned big chunk of change.
Lots of people that live in the country rack up a hundred thousand miles in a couple years. Our pu is 11 years old and 182,000 miles. I'm going to do whatever is necessary to keep it another 11 years. It will still cost way less and it rides great.
Americans want dependability. They may trade their Buick in three years but find a used pickup anywhere for sale.

[Cummins12V98]

45Ricochet wrote:

NJRVer wrote:
nobody keeps a car for more than 3 years.
Almost nobody "buys" a car, they lease it.

Count me in as " nobody " :B Mine are approaching or past the 10 year mark and were paid for with cash up front. Still running strong BTW.

I used to be the same as you. 99 Tahoe 12 years now, 81 VW PU 15 years, 86 C20 20 years.

But I like NC's method now of buy every 2-3 years trade then repeat! :B

[Bird_Freak]

Guess I am a nobody also. Never leased a car in my life. never made since to me to pay for something I will never own.
As for GM dropping their warranty I think their biggest problem with sales will be customer perception of why they cut it back to 60K.

[ksss]

Gr8life wrote:
If the extra long warranty is not seen as a value to the consumer then there is little incentive for the manufacturer to offer it. If I thought my Silverado, Ram, or Super Duty was going to have a catastrophic drive train failure in the first 100,000 miles, I would not buy one in the first place. I am another one who "leases", in that I trade long before the vehicle is worn out.

According to an article on the GMI forum this is the reason for the reduction. My personal thought it is on it's face it would appear to be "stepping over a dollar to pick up a dime". The existing warranty limits may play a larger roll in a purchase decision than GM thinks. Since all the OEM's are basically the same currently, most don't really pay any attention to it. However lower the GM warranty and now you could see it becoming an issue, especially for fleet owners. 10 pickups that run out of warranty 40K sooner than other options puts more of a potential financial burden on the company.

Ironically we will soon be seeing the larger transmissions that were co-developed by Ford and GM. Perhaps this has something to do with the reduction in warranty.

Lastly, it will be interesting to see what the other two OEM's choose to do. Will they try and capitalize on reduction of GM's warranty, or will they quietly all get on the same sheet of music and step back as well?

[Dave_H_M]

Here is another twist on the warranty. We decided to trade in on a 2015 Toyo Highlander. Never even considered the warranty in that I assumed it was the standard. After arriving at an agreeable price, we get the low down on the lifetime power train warranty the dealer was throwing in.

I don't know what it is worth thought, This being the 4th Toyo, we have yet to have one in the shop for anything besides service.

[Gr8life]

If the extra long warranty is not seen as a value to the consumer then there is little incentive for the manufacturer to offer it. If I thought my Silverado, Ram, or Super Duty was going to have a catastrophic drive train failure in the first 100,000 miles, I would not buy one in the first place. I am another one who "leases", in that I trade long before the vehicle is worn out.