GM's Money-Back Guarantee: A Good Thing?

Last week General Motors announced a new program that further attempts to boost consumer confidence in their vehicles. The money-back guarantee states that you can return the vehicle for any reason, no questions asked, up to 60 days after purchase.

A quote from GM's press release reads like this:

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.

GM's idea is that the program will prove that their vehicles are just as good as their competition. That might be, but there is likely even better consumer news just around the corner and that just might translated to further good news for the auto industry.

As most entrepreneurs will attest, it is almost always a good idea to offer a money back guarantee. And so it is extremely likely that several other major car makers will follow suit quickly offering very similar programs for their 2009 and 2010 models. The result? More hesitant consumers will see this as just one more reason to move from a very conservative fiscal stance to one that takes a bit more risk on a big ticket purchase. Why not? There will be nothing financially to lose for up to 60 days.

For GM, there is no guarantee that the program will only boost interest in their vehicles, but it does seem clear that if other automakers follow suit, the auto industry (and the economy as a whole), will likely benefit by this increased second half activity.

Comments

[George2:]

There must be some fine print (like a daily rental fee) for a returned vehicle. Otherwise one could go from company to company and have free use of new vehicles for two months each.

Sep 14 10:29 AM

[Selling Naked:]

Exactly George2, and if there is not... I intend to have a new BEATER every 2 months. I can just hear the tires burnin off my new Camero now.

Sep 14 01:55 PM

[TCK:]

They will end the program the first time someone brings back the car with more than 10,000 miles on it !

Sep 15 09:31 AM

[casey00001:]

So Government Motors is spending even more money. At this point in time they can promise anything. Must be great to be a company with an unlimited bank account of other peoples money. What about the IPO?

Sep 15 06:28 PM

[working at ...:]

who going to take the loss the dealer or the taxpayers?

Sep 16 12:45 AM