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I read yesterday that General Motors (NYSE:GM) is extending warranties on 2007 cars and trucks from 36,000 miles to 100,000 miles. Assuming that the goal is to demonstrate product quality and win back buyers from Toyota (NYSE:TM), Hyundai, et al., I don't think it will work -- there are enough manufacturers pushing 100,000-mile warranties that GM doing a warranty "me too!" won't matter.

So here is a better idea: GM should skip ahead of its competitors and take warranties out to a million miles. Assuming GM takes my million-mile warranty advice, there are two things that could happen:

1. GM could go bankrupt, in which case the super-warranties won't matter.
2. GM could stay solvent, in which case it might be able to afford the super-warranties. If the super-warranties drive it into bankruptcy, see point 1).

The first point is self-explanatory, if unabashedly cynical. The second point, while somewhat circular, and more than a little tongue in cheek, still has statistics on its side. According to the U.S. Department of Transportation, the average life span of a vehicle is 12 years or 128,500 miles. While that might seemingly imply that huge numbers of car would be in warranty for their entire driving lives, my guess is that the distribution is actually skewed considerably to the left, with the median life of car
considerably lower than 128,500. In other words, increasing warranties from 100,000 miles to a million miles might have less of an effect than you'd imagine.

I could be wrong, of course, and the result might be GM's bankruptcy. But hey, that's the alternative anyway, isn't it?

GM 1-yr chart:

GM 1-yr chart

Source: GM's New 100,000 Mile Warranty Plan: Pie in the Sky