GM Dealers Opting Out Of 60-Day Satisfaction Guarantee

Some GM dealers have elected to opt out of the car company’s 60-day satisfaction guarantee program. Under the terms of the promotion a buyer can purchase a Chevy, Buick, GMC or Cadillac, and keep it for 30 days. If the customer is not satisfied after 30 days, he has 30 more days to bring it back. GM will refund the actual price the customer paid to the participating dealer, less any rebates plus applicable sales tax.

GM says that 3.5% of its dealers are not participating in the program. That is 149 of the firm’s 4,000 dealers. Other sources say that the number is much higher.

Phone conversations with a number of GM dealers show that there is some confusion about the program. Several of the largest dealers in the country including Potamkin will not offer the promotion at all.

The reasons that the dealers who are shying away from the program have decided against offering it include:

1. They dislike the new ad campaign promoting the 60-day promotion. The campaign TV commercials star new GM Chairman Ed Whitacre, former head of AT&T (T). Whitacre has no experience in the auto industry.

2. Dealers believe that they are running financial risks by taking cars back from customers. Whether this is true or not is hard to tell. Some dealers are worried that once they pay customers it may take time for them to get money from GM.

3. Higher end dealers, particularly those who sell Cadillacs, believe that the marketing program is a sign of desperation that cheapens the brand.

One source told 24/7 Wall St. that close to half of the GM dealers in some large metro areas have either decided not to be in the program from its inception or are leaning toward dropping out of the program after only a few days.

Douglas A. McIntyre