AskPatty Certified Female Friendly Logo

Addressing Post-Bankruptcy Car Warranty Worries

Published Jun 15th 2009, 7:31pm by Jody DeVere in Featured Articles

lemonMany drivers of Chrysler and General Motors vehicles may be wondering about their recourse if they require warranty work, or if their car exhibits defects that may qualify it as a "lemon."

There's plenty of good news here, but also some bad.

For instance, according to a document released by the White House Press Office earlier this week, "GM will continue to honor consumer warranties." With Obama's announcement on Monday, the U.S. Treasury made its Warranty Support Program available to GM and $361 million was funded to a special program available to provide security for the orderly payment of warranties for cars sold during this restructuring period. And don't forget that President Obama created a "Warrantee Commitment Program"  in March specifically to provide backing for Chrysler and GM vehicle warranties and assure consumers that their new-car warranty would remain valid through its term.

So that's good news!

More good news: The U.S. Court overseeing General Motor's bankruptcy approved GM's request to continue honoring vehicle warranties, including GM's participation in the Better Business Bureau's Auto Line program for consumers that need help with any warranty-related dispute with the manufacturer.

090601_GM_logo_s "BBB Auto Line" is the world's largest out-of-court warranty dispute resolution program and has been administered for the past 30 years by the U.S. Better Business Bureau system for General Motors, as well as many other major brands. This service is available to consumers as an informal way to resolve any warranty disputes they might have regarding reoccurring problems with a vehicle that they believe may be a "lemon."

"Both GM and the Court understand that it is absolutely necessary to honor warranties and this decision benefits consumers by ensuring they will continue to have a free and easy way to resolve warranty disputes with the assistance of BBB AUTO LINE," said Steve Cox, BBB spokesperson.

Chrysler_logo However, you may have reason to be concerned about Lemons.  According to a blog at Consumer Reports,  "some checks that Chrysler sent to consumers as reimbursement for lemon-law claims have bounced. Chrysler has said that it will back warranty claims on its cars while in bankruptcy." According to the article, "All payments that have already been sent will be honored... However, any claims that have not had a check sent are now in limbo." Even though Chrysler has emerged from its bankruptcy, these reports certainly feed consumer fear for warranty claims for both GM and Chrysler after the carpocalypse.  

And unfortunately, even though General Motors has stressed a greater emphasis on customer support, some consumers fear they may have difficulty finding shops to honor their warranties. It's a realistic fear for owners of both Chrysler and General Motors vehicles, especially as brands are discontinued, dealerships are closed, and options for service are reduced.  This article at Consumer Reports says "Saturn owners in the Hartford, Conn., area are being given the runaround when it comes to warranty service. With two Saturn dealers closed and a third no longer servicing Saturns under warranty, consumers in the area are forced into a 54-mile round trip to the next closest dealer for warranty service."

Getting vehicles repaired under warranty has already become a problem for some, as demonstrated in this CBS Early Show Interview with Fritz Henderson. About halfway through this segment the anchorwoman tells him she checked with 20 dealerships in New York and New Jersey looking for warranty work for her Saturn and was declined by all but four.  Henderson responded that it was "regrettable" and admitted "we have some work to do," and emphasized "We have absolutely no intention at all of not taking care of customers." It's clear that dealerships across the nation may need additional education and enforcement.

In the meantime, what steps can you take if you need repairs on your GM or Chrysler vehicle?

Regardless of where you take the vehicle, this article at shares these tips from Jim Travers, Consumer Reports' associate auto editor, to ensure satisfaction when it comes to auto repairs and service:

"1) Shop around. Service prices can vary dramatically, even among dealerships of the same make.
2) Check your manual. When taking in your car for routine maintenance, use your owner's manual to see which services need to be performed at specific mileage intervals.
3) Get a quote. Don't allow a shop to do any work without you first approving an estimate for the job.
4) When a dealer is best: Go to a dealer for warranty repairs, recalls, and "service campaigns," in which the automaker offers to correct a defect. Also consider a dealer for a system that's exclusive to the car's brand -- especially electronics.
5) Look for a specialist. Independent shops that specialize in your vehicle's make are more likely to have the proper training and equipment.
6) Does the shop get updates? Make sure the shop gets the automaker's service bulletins, which tell mechanics how to fix common problems with a model.
7) Be specific. Tell the service writer or mechanic when the problem started, whether it happens only in certain conditions, and any associated noises, smells, or vibrations."

Finally, if you own a General Motors or even a Chrysler vehicle and have questions about warranty work, product defects, or "lemon" claims, you may want to check out the "Auto Crisis Hub"  at Consumer Reports. They've created an extremely detailed site which addresses many of the most common questions and concerns about GM's and Chrysler's bankruptcy, answering such questions as "What if my car brand is discontinued?"  "What if my dealer closes?"  and "Will parts and service be available?"


Jody-devere_president_askpatty Jody DeVere
President and CEO

Need Car Advice?

Ask The Experts!

Looking for a New or Used Car?

Search for our Certified Female Friendly® Car Buying Marketplace locations

Help Our Charities