GM's return policy may not be worth the hassle!

[Oracle of Delphi]

Dan Strumpf / Associated Press

You fell in love with that $22,000 Chevy Malibu because of its color, style and price. After driving it home, you realize it's not what you wanted. Maybe it's the way it handles on the highway, the location of the cup holders or the shape of the seats.

Don't worry. Bring it back for a refund, no questions asked, says GM's Chairman and new TV pitchman Edward Whitacre Jr.

But is it really as easy as returning an ill-fitting shirt to Macy's?

As with any deal, it's a good idea to read the fine print. As your love affair with the new car turns to hate, you'll need to drive very carefully and make sure to limit how many miles you put on the car. And don't expect your wallet to be made whole even if you follow the fine print to the letter.

Q : So, I can bring back my car or truck to the dealer anytime?

A : Not so fast. No returns are allowed within the first 30 days of purchase. It's anytime between day 31 and day 60 of ownership.

That seems like a narrow window, but the policy makes sense for GM. Buyer's remorse can set in within days for new customers, who grouse over things like knobs and cup holders appearing to be in the wrong place. Owners can grow more accepting of problems over time, says Jack Gilles, director of public affairs for the Consumer Federation of America.

Q : Do I have to cite a defect?

A : No. You can hate the color for all GM cares. But the policy says a returned vehicle can't have more than $200 in damage -- and GM, through an inspection, gets to decide what constitutes that much damage.

Q : Wow, $200? Doesn't even a small scratch or dimple caused by kicked-up gravel cost that much to fix?

A : It's true the cost of vehicle repairs -- even small, cosmetic ones -- can easily exceed $200. (Repairs covered by warranty are excluded.) But GM insists it had to set a limit to protect itself from customers returning badly damaged vehicles and expecting a full refund.

Gilles says the $200 limit is on the low side -- particularly when coupled with the prohibition on returning before 30 days.

"You combine that with the 30 days, it's easier and easier to get $200 in damage," he says. Plus, with GM making the determination on damages, "it may appear that the cards are stacked against you."

The lesson for consumers: Be extra careful during those first two months if you're thinking about returning your new ride. And no car can be returned if it's been in an accident.

Q : If I keep the car free of dings, I get all my money back?

A : In this case, "money back" doesn't mean all your money. Just the cost of the vehicle and sales tax.

GM won't refund the title, registration and other fees, which can add up to several hundred dollars depending on your state.

"It's not really unfair because otherwise you've rented the car for free for 30 to 60 days," says Terry Connolly, dean of the Ageno School of Business at Golden Gate University.

GM also won't refund any accessories purchased through the dealer, like paint or rust protection, aftermarket equipment and the like. So choose those add-ons carefully if you think you might return the car.

Q : What else do I need to look out for?

A : Don't go on a cross-country jaunt. The new car or truck cannot have more than 4,000 miles on it. Also, owners must be current on payments.

Forget buying his and hers pickup trucks. Only one return is allowed per household. In addition, leased vehicles are not covered.

And GM says if you die, no refund.

The program started Sept. 14 and runs through Nov. 30, which is the last day customers can take delivery of their new vehicles to qualify for a refund.

Q : How does this compare with the Hyundai Assurance program?

A : The Hyundai Assurance program, which the Korean automaker launched in January, also allows buyers to return their vehicle. But the key difference is a buyer is eligible only if he or she loses their source of income. In addition, the policy kicks in after two months of ownership, but is good for a year.

Q : If I return my vehicle and everything is in order, will I get my old car back?

A : No. According to GM spokesman Pete Ternes, dealers aren't obligated to return the car you traded in. In any case, after 30 days it's probably sitting on a used-car lot or in the hands of another driver. Instead, the dealer will treat the value of your trade-in as money toward your new car and refund you the full price, Ternes says.

Q : What happens to my returned car?

A : Dealers will put the returned vehicles up for sale on their used car lots. GM, through an insurer, then reimburses the dealer for any loss he or she takes on the refund.

Q : How much could this program wind up costing GM?

A : GM bought an insurance policy through the firm cynoSure Financial Inc. to cover the cost of any reimbursements, spokesman John McDonald says. The policy was purchased using funds from GM's marketing budget, which that automaker does not disclose.

Q : With all the restrictions, why would anyone want to participate in this program?

A : Several consumer experts say the hassle isn't worth it, particularly when you consider that GM is quietly offering an incentive NOT to participate.

Customers who waive the return policy receive a $500 rebate toward the purchase of their vehicle. The sensible choice seems to be to settle on the car you really want and take the rebate, says Gilles of the Consumer Federation of America. "In my book, spend a little more time checking the car out and take the 500 bucks."

Link: http://www.detnews.com/article/20090927/AU...orth-the-hassle

[regfootball]

so, Mr. dumba55 buyer, do your research and make SURE you have the car you want when you buy it.

DUH. GM shouldn't take a bath because someone doesn't like the cupholders.

IMM, here are legit reasons for returning a car....

mpg grossly off expectation

made wrong powertrain choice

made wrong vehicle type choice (i.e. small car vs SUV)

seats cause bad physical discomfort

driving the car safety is impaired (i.e. bad vision etc).

[balthazar]

I see nothing wrong whatsoever with the program or the 'fine print'. Undoubtedly, there will be some idiots that will feel 'cheated' because money paid to the DMV isn't repaid by GM or a car with a mashed quarter doesn't get full transaction price back, just like there will be those idiots complaining they canot return their hundai after 1 week (which frankly, seems far more likely).

Wow, "restrictions apply" - that's certainly new.

[Drew Dowdell]

The only people who would be upset about any of this are the people trying to scam GM for a free car for 2 months in the first place.

None of the restrictions are unreasonable. If you get a rock chip in the paint and you want to return the car, go spend the $250 to get the paint chip fixed. It's cheaper than $25,000 for the whole car.

[redtruck]

It is only a problem if you didn't want the car in the first place. A car is a big investment so if someone is that undecided they shouldn't buy. As far as not getting your trade in back that seems like if buying and undecided it would be best to keep your trade parked at home then if you do decide you want to return the car you still have transportation. And if you keep the car then sell your old car after the 60 days you will get more than the trade value and can put it on the loan.

[ShadowDog]

Anyone bitching about the unexpected cost for return need only be given a cheque in their pie-hole and a kick in the ass out the door. If a vehicle is the second-largest investment a person can make, that person should invest the appropriate amount of time to research and test drive their short list of choices. Oh well if people aren't so bright. That's no surprise.

The marketing campaign is a solid one. It's not as though they're saying, 'What have you got to lose?' No, they're saying, 'Give us a chance. We think you'll be satisfied.'

[hyperv6]

This whole deal was more of a statment. Most people will never use this as they will know what they want before they buy.

The stadards set here are resonable and expceted. This is GM not Avis as they sell cars not short term loans.

The fact remains there will be a few to test this and they will have the rules to follow that they were given in advance.

THis ain't just buy it and try it.

[BuddyP]

DId anybody actually thing you could just say "nah, don't like it" and take it back?

Like that old saying, if it's too good to be true, it probably is.

[GXT]

I think the fine print is fine. This is what suprised me:

"Customers who waive the return policy receive a $500 rebate toward the purchase of their vehicle."

So much for "GM putting their money where their mouth is".

[GXT]

DId anybody actually thing you could just say "nah, don't like it" and take it back?

Like that old saying, if it's too good to be true, it probably is.

I did think that, because that is what the commercial implies. Even with the fine print, I'm still under the impression that ""nah, don't like it" and take it back" is pretty much the deal.

[hyperv6]

I did think that, because that is what the commercial implies. Even with the fine print, I'm still under the impression that ""nah, don't like it" and take it back" is pretty much the deal.

That is the deal but the $500 rewards the people who know what they want. I would take the $500 long before I go for the return.

If I am buying a car it would not be till I know what I am getting. Too many people are idiots when they buy and never really check out a car first. You have to be crazy to buy on a $30,000 whim.

Besides I have had dealers give me cars to take home and keep for a day or so. In that kind of time you should know if you like it or not. I do not needs weeks to find this out.

Edited September 29, 2009 by hyperv6

[Drew Dowdell]

I think the fine print is fine. This is what suprised me:

"Customers who waive the return policy receive a $500 rebate toward the purchase of their vehicle."

So much for "GM putting their money where their mouth is".

The $500 is for people who already know they want a GM car and know they aren't going to use the return policy.

The return policy is for people who have driven Hondas for the past 20 years and are thinking of trying something new but just aren't sure if they'll like it.

[Camino LS6]

The whole mission here is to put butts in seats by giving the doubters a reason to give GM a shot again.

It's a sound program.

[aaaantoine]

And GM says if you die, no refund.

What's the reasoning behind this one?

[Drew Dowdell]

What's the reasoning behind this one?

Because it's not GM's fault that you died. Your estate gets to deal with the car.

[GXT]

That is the deal but the $500 rewards the people who know what they want. I would take the $500 long before I go for the return.

If I am buying a car it would not be till I know what I am getting. Too many people are idiots when they buy and never really check out a car first. You have to be crazy to buy on a $30,000 whim.

Besides I have had dealers give me cars to take home and keep for a day or so. In that kind of time you should know if you like it or not. I do not needs weeks to find this out.

I feel the same way. Buying a car is a huge hassle... I can't imagine having to buy, return, and then buy again.

[GXT]

The $500 is for people who already know they want a GM car and know they aren't going to use the return policy.

Justify it how you want, in the end there is no question that they are paying people to wave their right to return. And that flies in the face of "putting our money where our mouth is".

The return policy is for people who have driven Hondas for the past 20 years and are thinking of trying something new but just aren't sure if they'll like it.

This return policy is for PR. What kind of fool buys based on a gimmick like this? If anything GM is preaching to the choir.

This isn't going to sway Honda buyers for several reasons:

1) The problems with GM cars that drive people to Honda (safety, reliability, and resale) are either apparent up front or don't manifest in 30-60 days.

2) Honda buyers do research. I'm guessing they understand the purpose of a test drive as well as extended test drives.

Since I am already generalizing, I would also say that Honda buyers don't tend to fall for gimmicks (they bought a Honda even though Honda has very low incentives) and put a value on their time that would generally preclude the hassle of this plan (they will pay more up front for the expectation of less hassle in the long run).

I've said before that I could consider a CTS. But this kind of offer would do nothing to sway me. I will do the research and test drive. I will also expect a deal that will cover the extra cost of ownerhip of the CTS including my Saturday's wasted running it to the dealership for repairs and the dismal 29% 5yr residual. The ability to return the CTS doesn't even factor.

[redtruck]

Justify it how you want, in the end there is no question that they are paying people to wave their right to return. And that flies in the face of "putting our money where our mouth is".

You are right this is not GM putting their money where there mouth is. If the car is returned with close to 4000 miles on it they will lose more than $500 when they have to resell it as a used car.

What would be better would be if you decide to keep the car after the 60 days then you get the $500 refunded. This way they would be closer to putting their money where there mouth is.

[GXT]

What would be better would be if you decide to keep the car after the 60 days then you get the $500 refunded. This way they would be closer to putting their money where there mouth is.

But in a way that is still paying people not to return the car.

I think what would have been even better would be for them to NOT have taken out the insurance policy to cover potential losses. This is kind of like bragging how confident you are that you have built a fire proof house and then buying fire insurance.

Don't get me wrong... I think it would have been silly for GM not to get the insurance or to try to disuade people from returning because in the end this is a silly gimick and I am sure GM knows that. But just don't pretend that you are taking some big stand of confidence when you are doing all this hedging.

[Drew Dowdell]

But in a way that is still paying people not to return the car.

I think what would have been even better would be for them to NOT have taken out the insurance policy to cover potential losses. This is kind of like bragging how confident you are that you have built a fire proof house and then buying fire insurance.

Don't get me wrong... I think it would have been silly for GM not to get the insurance or to try to disuade people from returning because in the end this is a silly gimick and I am sure GM knows that. But just don't pretend that you are taking some big stand of confidence when you are doing all this hedging.

I'm sure you would have ridiculed White Star for taking out insurance on the "unsinkable" Titanic.

[GXT]

I'm sure you would have ridiculed White Star for taking out insurance on the "unsinkable" Titanic.

To the best of my understanding (which isn't much in this area) White Star didn't take out insurance. They also didn't avoid sailing when ice bergs were present. They also didn't slow down or go out of their way to avoid the ice field. And they certainly didn't pay people $500 to bring a inflatable raft with them

As I wrote, "Don't get me wrong... I think it would have been silly for GM not to get the insurance or to try to disuade people from returning", I think it is a smart move for a company to cover themselves when they are clearly unsure of something. But then don't be surprised when people call you for explicitly stating that you are "putting your money where your mouth is" when you are hedging your position in multiple ways.

[CARBIZ]

To the best of my understanding (which isn't much in this area) White Star didn't take out insurance. They also didn't avoid sailing when ice bergs were present. They also didn't slow down or go out of their way to avoid the ice field. And they certainly didn't pay people $500 to bring a inflatable raft with them

As I wrote, "Don't get me wrong... I think it would have been silly for GM not to get the insurance or to try to disuade people from returning", I think it is a smart move for a company to cover themselves when they are clearly unsure of something. But then don't be surprised when people call you for explicitly stating that you are "putting your money where your mouth is" when you are hedging your position in multiple ways.

Sigh again. Someone send this man to a Business 101 course: preferably in highschool!

First of all, any business (let alone Big Business!) does not like a vacuum. Accountants and the actuarial guys go ballistic over 'unknowns;' therefore, a quantifiable insurance policy (or bribing a customer to the tune of $500 which may or may not be the actual cost of the policy itself on an individual basis) places a dollar value on any potential losses. Happy beancounters keeps them off the backs of the marketing guys.

Another reason for the $500 'discount' (and this is coming from my 11 years of car sales experience) is that it shuts up certain types of buyers who will inevitably whine "well, I don't want to return the car, so what are you going to do for me?"

[Drew Dowdell]

Another reason for the $500 'discount' (and this is coming from my 11 years of car sales experience) is that it shuts up certain types of buyers who will inevitably whine "well, I don't want to return the car, so what are you going to do for me?"

Good thing we don't have any of those types around here....

[CanadianBacon94]

i love how the last post is the ad about the gm 60 day money back gaurantee