GM cutting warranty, maintenance programs
General Motors Co. is cutting the mileage limit of its powertrain warranty on Chevrolet and GMC vehicles — from 100,000 miles to 60,000 miles — starting on 2016 models. The five-year powertrain warranty limit will remain unchanged.
The Detroit-based automaker on Thursday said the reduction is because the warranty is not a high priority for potential buyers. GM said it also is cutting its two-year free maintenance program from four to two visits a year for the same reason.
“We talked to our customers and learned that free scheduled maintenance and warranty coverage do not rank high as a reason to purchase a vehicle among buyers of non-luxury brands,” GM said in a statement.
GM said it will reinvest savings from the reduced programs “in features consumers value more, such as advanced connected-vehicle technology.”
The reduced warranty coverage, which was first reported by Automotive News, matches that of other competitors such as Ford, Toyota and Honda. It’s also more in-line with GM’s other brands; Buick and Cadillac have six-year or 70,000-mile coverage, which was changed two years ago from five years or 100,000 miles.
The 100,000-mile or five-year extended powertrain limited warranty was introduced by GM in 2007 as a way for the company to tout its reliability and quality.
The free maintenance program was announced in 2013 for most 2014 Buick, Chevy and GMC models. Then-CEO Dan Akerson introduced the program as a way to retain customers. According to GM, customers who perform routine maintenance with a dealer are twice as likely to purchase another one of the automaker’s vehicles. The reduced free maintenance schedule also will start with 2016 models. The program includes free oil changes, tire rotations and other services.
Kelley Blue Book doesn’t expect the cuts in warranty or service to hurt the resale value for GM’s 2016 model-year vehicles.
“Extended warranty coverage and free maintenance will lower a vehicle’s cost of ownership, yet these features tend to go unnoticed by the majority of new-car shoppers,” said KBB senior analyst Karl Brauer. “It’s unfortunate more buyers don’t value these items, but for a large automaker like GM it’s possible these features add substantial costs while having minimal impact on sales.”