GM dealers say they like the product focus of General Motors Co.'s satisfaction-guarantee program, but most consumers will take the program's $500 rebate offer instead of the 60-day trial period.
Last week, GM unveiled a program that gives consumers 60 days to return a vehicle and get their money back, coupled with advertisements featuring Chairman Ed Whitacre's “may the best car win” challenge. The offer gives consumers $500 cash if they elect not to participate in the trial period.
Some dealers said the satisfaction-guarantee announcement came too recently for them to have had chances to pitch the deal to many customers. But most customers at Tom Durant's six GM stores in Texas and Florida are taking the $500 option, he said.
“If they like the car, if they test-drive the car, most of the people would rather have a car to keep,” Durant said.
Dealer Chris Haydocy said he thinks most customers will take the $500. But sales staffs that use the $500 cash rebate to sell vehicles are missing the point, he said.
“Our salespeople are not permitted to talk about the $500. That is going to be disclosed in the business office,” said Haydocy, who owns two GM dealerships in central Ohio. “For this program to be successful, it's more important to talk about the money-back guarantee. It conveys confidence in the vehicles.
“It's not about the deal, but rather it's about the world-class products.”
Promoting the program
Haydocy has advertised the program through e-mails to 8,200 people and added it to his print ads. Fellow Ohio dealer Bill DeLord has added the money-back offer to his print ads, but that's not the centerpiece of the notices. Instead, the ads focus on the “may the best car win” concept.
“It's very encouraging that we are aggressively going after the competition with a program like this,” he said. “I don't know that we're going to talk too much about the $500 option. We're going to focus more on the perception that our product is great.”
Still, emphasizing competitive vehicles may not bring in enough customers to lift the “very slow” traffic DeLord said he's seen at his Cadillac, Buick, Pontiac and GMC store in Lebanon in the wake of the cash-for-clunkers program.
The federal incentive's offer of $3,500 to $4,500 for consumers who traded in gas guzzlers for new vehicles with better fuel efficiency sent last month's sales to their highest levels since August 2007. But fewer consumers have shopped for cars since the government rebate ended Aug. 24.
“I still believe strong incentives and competitive pricing is going to get people through the door,” DeLord said.
A lot of paperwork
GM's money-back offer requires consumers to keep each vehicle for at least 30 days before returning it, and they can't put more than 4,000 miles on their car. To qualify for a return, vehicles can't have more than $200 in damage, and they can't have been involved in an accident.
Sales taxes are refundable, but consumers don't get other fees back, including what they paid for registration, financing or insurance. The program doesn't let consumers get their trade-in back.
All those rules mean lots of paperwork for dealers, Haydocy said, but the satisfaction guarantee is simple for consumers.
Said Haydocy: “I can explain it to a client in 60 seconds.”