Bankruptcy? What happens to my car warranty then?
If the manufacturer of your new car goes bankrupt, what will happen to your factory warranty?
Or if you have an extended warranty that's backed by the manufacturer, will that warranty still be honored?
Extended warranties from third party companies should still continue to be backed by those companies, but if the dealer network is no longer affiliated with a manufacturer, will the third party extended warranty company reimburse your repairs?
Lots of questions - who has answers?
Or if you have an extended warranty that's backed by the manufacturer, will that warranty still be honored?
Extended warranties from third party companies should still continue to be backed by those companies, but if the dealer network is no longer affiliated with a manufacturer, will the third party extended warranty company reimburse your repairs?
Lots of questions - who has answers?
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The Jeep Cherokee owners have kicked this potential problem around a bit in the What will happen to my Chrysler warranty? discussion. And there's Chrysler's New Lifetime Drivetrain Warranty that I guess is at risk of going away or being changed.
Not long ago if I were buying a BIg 3 car and getting an extended warranty I'd have been looking for one from the manufacturer rather than a third party. Now it might be exactly the opposite.
Someone wrote into our Help Desk asking about this, and it sounded like a good topic. One rather hopes it's all hypothetical. Maybe a Daewoo owner can pop in.
It is funny how things flip 180 degrees sometimes eh? I've always poo-pooed third party warranties (and I sure wish the FTC would jail those idiots who call me once a week to my number that's on the do not call list trying to sell me one).
Of course I'm not exactly the guy they want. We've got four cars. The only one under 110K is the CPO Ody which has loads of warranty left.
Ask the next one for a quote on the Daewoo that somehow escaped their notice... That could answer your question about them!
There's someone around her that has a Daewoo still. I see it maybe once every two weeks.
And it's possible, although not likely, that an approved plan of reorganization could change the warranty obligations.
For example, as part of their Ch. 11 plan, Chrysler could convert the lifetime drivetrain warranties to a 3/36 warranty. With court approval of course.
I can read CR online free through my library and will have to go take a look. Thanks for the heads up. (CR sold me down the river on a Gruman canoe instead of the much better ABS material back in '74 and I've never forgiven them either :shades: ).
discussion
It’s nowhere near as beleaguered as car companies in Detroit, but the ambitious privately-held electric roadster company, Tesla, has put plans for a San Jose-based factory on hold. The company, which has asked for a $400 million low-interest government loan, hasn’t been able to raise a necessary $100 million in venture capital to go through with the plans. Part of the issue could be politics: Silicon Valley wants its sexy automaker to stay local, but the government would require Tesla to take over a defunct factory elsewhere.
2001 BMW 330ci/E46, 2008 BMW 335i conv/E93
i ended up buying it.
one time the car died and i had it towed the the local dealer although it had a clause in it that you had to be 40 miles or more away from the selling dealer to get coverage under the warranty.
i guess the warranty company used the 'as the crow flies' method to determine the distance. in actual driving it was over 40 miles.
i ended up paying 2 hours diagnosis at dealer 1 because they were '38' miles away as measured by the warranty company.
i also had to pay for the tow back to the selling dealer.
to the warranty companies credit, they did reimburse a good portion of the towing bill and to fix the actual problem, although they would not accept the original diagnosis, which was correct.
It works better if people just talk about the topic.
Wow. What a concept. :P
Just expect bad service by a third party company. But hey, if you bought a GM your probably expecting to spend time at the service station anyway.
I read the news articles about the federal govt. honoring GM and Chrysler warranties.
"The program will cover consumers who buy a new GM or Chrysler vehicle during the restructuring period, according to a U.S. Treasury Department statement."
What if you already own a GM car with an extended warranty and they declare bankrupcy??
My son is going to college in the fall. We bought him a 2007 Malibu Maxx with all the extra safety features curtain & side airbags, etc. We also bought the extended warranty to cover him while he was away from home in college.
But what happens if GM goes bankrupt??? The current proposal by Obama's administration only covers cars purchased during an upcoming transition period.
We're still making payments on the car, including the cost of the warranty. I feel sick.
Thanks for any info anyone can share.
A concerned mom
I believe the GM factory extended warranty is underwritten by GMAC, which is a separate entity than GM. GMAC has been described as "cash-strapped," but isn't in such dire straits as GM itself.
If it makes you feel better, you can cancel the GMAC warranty and get a prorated refund. If you financed the warranty, I think the payoff goes to the lender, but this will reduce the principal balance of your loan.
I'm concerned about my wife's car which still has a supposed "factory warranty" through next summer (if she doesn't hit the mileage limit first). It's a CTS, which has been pretty trouble free. But as for buying a new car - not right now, no way, I like American cars but not Fords or Chryslers (Cadillacs for me thank you), and there's no way I'm getting sucked into this malestrom. I think I'll find a nice 1995-96 Fleetwood to replace the one i crashed before getting sent overseas. They'll be relatively inexpensive, can last forever and I LIKE them.
Not to scare anybody, but if my history is correct, no American car company has survived bankruptcy since Studebaker in 1934--which hung on another 32 years, probably thanks to WW II.
I think all Chrysler's are worthless but i agree that all used Chrysler's will take a huge hit in the resale value on June 9th esp. 1-3 year old cars. similar to what happened with Oldsmobile. You can probably buy a new Chrysler for cheaper than a 1-3 used one.
Interesting times. I'm about to get into the maket for a new/used car. should be fun.
If the dealer sells the car AFTER his franchise is pulled, Chrysler DOES NOT have to honor any warranty.
Why wouldn't the basic 3 yr/36k mile warranty not be honored? I understand the Limited Lifetime warranty wouldn't be honored.
Is this because the cars would be considered used cars?
Bingo.
Aftermarket parts can have a warranty through the aftermarket company. Aftermarket parts can void the manufacturer warranty if they cause trouble, but it's an unusual occurrence.
Grey market vehicles usually have the warranty blocked or severely limited. We occasionally see a vehicle built for Canadian sale that was brought south and sold as 'nearly new'. These were meant to be used in Canada-not the US, so the warranty is voided.
This will be a whole new situation. Most car dealers that just go out of business give back the cars or the bank takes them back and they are sold through other dealers. With several 1000 dealers losing their franchise no one will want the inventory and the customer could get screwed if they do not understand the difference between a legitimate dealer and one that is just selling cars he was stuck with. With Chrysler shut down the supply may dry up before the dealers lose their franchises.
bankruptcy would have invalided these.
good move on Fiat's part.
Fiat Agrees To Honor State's Lemon Law With Chrysler (courant.com).
"Leading national consumer groups late Tuesday appealed the decision of the federal bankruptcy court overseeing the Chrysler bankruptcy proceeding, asking the court to preserve consumer protection laws and the rights of victims injured by vehicle design flaws and defects to seek compensation from Chrysler.
With the stroke of a pen, the bankruptcy court exempted the new Chrysler/Fiat company that will emerge from bankruptcy proceedings from accountability to consumers who have suffered or will suffer injury or loss caused by defects."
Ruling that Undermines Lemon Laws in 25 States Should Be Overturned