General Motors has begun offering an extended bumper-to-bumper warranty to its customers that matches the time span of the powertrain warranty. The new bumper-to-bumper warranty is available on new vehicles purchased on or after Oct. 15 for the 2018 or 2019 model year, according to the company.
The upgraded warranty would cover Chevrolet and GMC vehicles for five years or 60,000 miles and Buick and Cadillac vehicles for six years or 70,000 miles. The standard bumper-to-bumper warranties offer three years or 36,000 miles for Chevrolet and GMC and four years or 50,000 miles for Buick and Cadillac.
"Fleet owners look at total cost of ownership when purchasing their vehicles," said Ken Mac, director of Chevrolet, Buick, GMC, Cadillac Protection. "This total includes the initial purchase price, the cost to maintain and repair, and the resale value, as some companies tend to turn their vehicles over in just a few short years. The extended limited warranty can help fleet owners maintain a higher overall resale value as it offers the new buyer continued bumper-to-bumper coverage and the confidence that the vehicle has been repaired with GM original equipment parts."
Pricing would be set by the dealer, and GM has recommended a price from $1,000 to $2,000 depending on the model. Fleet purchasers can add the warranty after they ordered the vehicle but before it has been delivered. Once purchased, the warranty would stay with the vehicle, even if it changes ownership, which could increase its residual value, said Rita Kass-Shamoun, a GM spokesperson.
"We believe this could be a selling point from the original vehicle buyer to the second vehicle owner," said Kass-Shamoun. "We believe this will increase the residual value."
Commercial fleets that lease their vehicles typically keep a vehicle for about three years, but government agencies, especially those that purchase vehicles through local dealerships, tend to keep them longer. The warranty isn't available to daily rental fleets, according to GM.
"People who lease typically keep the vehicle for 24-36 months, so most of them are always covered by the base bumper-to-bumper limited warranty," Mac said. "But if you buy, analysts say you’ll likely keep your new vehicle for over six years. This true extended warranty can keep the average customers covered for most if not all of the time they own their vehicle."
The new warranty differs from service contracts offered by dealers to help buyers protect themselves against unexpected repairs. Any warranty service is completed without needing to file a claim or paying a deductible. The option would be included in the overall price of the vehicle and could be folded into a loan or lease.
Originally posted on Automotive Fleet