General Motors has announced a new program attempting to boost consumer confidence in their vehicles. The idea is that you can return the vehicle, no questions asked, up to 60 days after purchase. GM believes that if people give their cars a try, they will see that they are at least as good as those built by other manufacturers. Will this new program matter? (And vote after the jump to let us know if you'd buy a GM car based on the new program.)
Here's a blurb from GM's press release:
General Motors announced today that it will offer a Satisfaction Guarantee to eligible buyers of new Chevrolet, Buick, GMC and Cadillac vehicles. The guarantee allows customers to return their vehicle to their dealer between 31 and 60 days of purchase and receive a refund of the purchase price for the vehicle.
In essence, this program acts as a sort of extended test-drive. Obviously, nothing would have gone wrong with a car in just two months (I hope), so it's not like you can conclude that the car will run fine for several years because it did well for two months. The only thing you can really learn from an extended test-drive is whether you enjoy driving the car, which must be what GM has in mind.
So who will this appeal to? A program like this might seem to be geared towards people who have little experience with GM, are skeptical about their vehicles and like other manufacturers' cars already. I'm not convinced this program will be enough to cause them to give GM a chance. Unless you're unhappy with your current manufacturer, then there's little reason to give GM a shot. If you weren't intrigued by their product before, I don't know how this program would suddenly conjure up new interest.
Instead, it could mostly appeal to those who already like GM, but are worried about its cars quality going forward, now that the government has its hands in the firm. For those individuals, this could persuade them to purchase from GM again. Now, they have two months to see if the new vehicles are still up to their expectations.
The only other group that might find this program attractive is Americans who feel guilty for driving foreign cars. This gives them two months to determine whether GM's cars are tolerable enough to drive, while satisfying their conscience. Of course, they could just take a Ford for a shorter test-drive instead of dealing with a firm that the government had to rescue from the deep abyss of failure. This is also probably a relatively small portion of Americans.
One final observation is that there is definitely one consumer behavior to worry about. Let's say you need to rent a car for two weeks. Just go to GM, "buy" a new car and return it two weeks later, no questions asked. Unfortunately, there isn't really any way for GM to guard against this sort of thing. Luckily, I doubt there are enough evil geniuses out there to really engage in this sort of behavior, so this will likely happen only a handful of times.
But what do you think? Would you be more interested in a GM car because of this program? Voice your opinion in the poll below!
This seems like another gimmicky "money-back guarantee" like those on other big-ticket items like mattresses and exercise equipment. You may be able to return the item, but it's such a hassle that barely anyone would find it worthwhile, and you would lose money if you did.
Is someone really going to go through the process of obtaining financing for a vehicle only to bring it back a month or two later when they've already started paying interest on the vehicle? Do you get your "tax, title, and license fees" back? Unless GM is generous enough to allow themselves to be heavily taken advantage of, this will just be another gimmick.
The most basic essence of marketing is to "positively differentiate your product form competitors".
This program does that since no competitors offer it. It says "GM is willing to put its money where its mouth is".
It's similar to Lee Iacoca's "If you can find a better car, buy it" ad that accompanied Chrysler's all new 5 year, 50000 mile powertrain warranty - an industry first. That worked and worked big time.
Whether the GM program will be successful remains to be seen. My guess is that there is a part of the population that is unhappy with Government Motors so they'll be resistant. Another part of the population fears that GM (and Chrysler) will go belly up, so they'll be resistant. Another part of the population simply refuses to consider any American brand, whether due to actual or perceived deficiencies in those products.
Lastly, GM is short on CAR models with broad appeal and faces stiff competition in the CAR area from all other manufacturers.
All of the above negatives, give me the feeling that the program will not be a huge success.
I wonder if they are going to resell the returns as new or used? If new, are they going to tell the second buyer that the car has been driven for two months and returned?
I guess they won't be able to reset the odometer though, so if you see lots of miles, that would tip you off.
This silly policy doesn't fulfill a need; it's just a sign of desperation. Government Motors is trying to game people into taking on more debt for something they don't really need. Haven't we had enough of that already?