GM will offer 60-day, money-back guarantee on new cars
— -- Frustrated that many shoppers won't even consider its cars, General Motors says starting Monday, buyers of new GM models can bring them back within 60 days, no questions asked, and get back the price of the car.
GM's Vauxhall brand used a money-back guarantee in the U.K. some years ago, GM marketing chief Bob Lutz says, and only 2% to 3% of buyers brought vehicles back for refunds — about what he expects for the U.S. program.
"There is a certain amount of risk. So what? Doing nothing is not an option," he says.
GM's Saturn brand had offered buyers refunds within 30 days, but early in the 2004 model year changed to letting buyers swap for another Saturn instead. That ended in January and since then Saturn has had no refund or swap program.
As part of its Chapter 11 bankruptcy reorganization, GM sold Saturn to entrepreneur Roger Penske earlier this year.
The money-back program will be announced in an advertising blitz Sunday on morning talk shows and NFL footbal games. It will star GM's government-appointed chairman of the board, Edward Whitacre.
He will introduce himself, concede that he had doubts about GM products when he took the job, knows that shoppers share those doubts, and invite them to try a new GM vehicle risk-free.
That's the only ad that will use Whitacre, former CEO of AT&T, or mention GM prominently. Subsequent ads will focus on the company's four post-Chapter-11 brands: Chevrolet, Cadillac, Buick and GMC. Their vehicles will be directly compared to competitors, with the theme, "Let the best car win."
"If you do the comparison and a Toyota Camry meets your needs better than a Chevrolet Malibu, hey, help yourself," Lutz says.
GM says it believes Whitacre will come across as believable, self-effacing and someone who shares car shoppers' concerns.
GM sales of new vehicles in the U.S. are down a hefty 35% this year through August, according to industry tallymaster Autodata. The entire U.S. new-vehicle market is down almost 28%, so GM is underperforming a very bad market. GM's share of U.S. new-vehicle sales is just 19.5%, down from 21.7% a year ago.
No. 2 automaker, Ford Motor, sits at 15.8% of the U.S. new-vehicle market so far this year, up from 15% a year ago.
GM will provide more information starting Sunday at gm.com/guarantee.
Some details:
• The vehicle must be a new 2009 or 2010 Buick, Cadillac, Chevrolet or GMC.
• It must be returned between 31 and 60 days from purchase.
• It must have no more than 4,000 miles.
• The buyer can't be behind in payments.
• If the purchase loan included an additional amount to pay off the loan on a trade-in above what the trade-in was worth, that portion won't be refunded.
The conditions are meant to be simple. "We're not going to have a screen full of warnings like in those drug ads where you see the happy geriatric couple and a guy is telling you, 'Taking this medication while eating grapefruit can result in loss of eyesight'," Lutz says.
The program initially lasts through the end of Novermber, Lutz says, but could be extended, depending on how well it goes.