GM Bankruptcy -- How Safe Is Your Factory GM Warranty?

By: Justin Reynold

As a GM bankruptcy begins to become a very real, near term
possibility, I'm asked by many of my customers how this may
potentially affect their factory GM warranty. Will their
coverage be good tomorrow or will it be wiped out by the
bankruptcy?

When I was first asked these questions, I would have to admit
that I was a little tongued tied and unsure of an appropriate
response. Now, having given it much thought and after doing some
research, I have come to the conclusion that there are three key
factors to consider regarding the future coverage of a customers
GM warranty.

1) GM Would Never Recover

If GM were to hang hundreds, thousands and/or millions of
consumers out to dry, by not honoring their new car warranty,
then they would quite simply, Never Recover!

If that many consumers were to be "burned," GM would have the
near impossible task of rebuilding trust and credibility with
millions of consumers. With the already floundering sales of GM
products, a loss of even 20% of their loyal customer base would
be financially crippling.

2) Politicians and The Egg On Their Face

Our beloved politicians in Washington and their "To Big To Fail"
motto would not and could not let a GM bankruptcy negate the
coverage provided by the factory GM warranty.

They have simply invested too much tax payers money into GM at
this point and it would be a multi-billion dollar blunder that
would, more than likely, cost them their prized re-election next
term.

3) Treasury Departments Warranty Commitment Program

Source: WhiteHouse.gov 03/30/2009

For any new GM vehicles purchased during the GM bankruptcy
and/or restructuring period all factory GM warranty coverages
will be honored.

A reserve account will be established, and run by a third party
program administrator, in which 125% of expected warranty
service costs will be held. 15% of those funds will be provided
by the manufacturer and 110% will be provided by the US Treasury.

In the event that GM were to go out of business, then the US
Government would identify a qualified third party warranty
service provider to assume responsibility for all of General
Motors warranties covered by the program, in exchange for the
assets of the program.

Summary

I'm not a betting man, okay maybe a little, but I'd be willing
to bet that a GM bankruptcy will have absolutely no adverse
affects on existing factory GM warranty coverage and/or any
future sales of new GM cars, trucks and SUV's.

The GM new car warranty coverage is one of the best coverages
available and if you are currently covered, or will be with a
new purchase, then I think it's safe for you sleep well at
night, because your coverage will be good tomorrow.

About the author:
Justin has nearly twelve years experience in the car business
and is currently employed as a Finance Manager. For the best car
buying, selling and general automotive advice visit:=>
http://www.insider-car-buying-tips.com