Automotive Digital Marketing

Professional Community for Car Dealers, Marketing, Advertising and Sales Leaders

Loading... Be Patient!

An article last month in USA Today, revealed that General Motors plans to dramatically cut the warranty coverage on Chevrolet and GMC vehicles beginning with 2016 models. Additionally, GM is halving those brands’ maintenance-free programs. According to the article, the main reason? GM thinks nobody cared.

This could create significant side effects for Chevrolet and GMC franchisees.


The warranty period of any vehicle is a highly important time in the customer retention lifecycle. The brief time when a vehicle is under warranty is also the period of time that a dealer will enjoy the highest level of customer loyalty – during this period consumers will naturally gravitate towards a franchise dealer to get repairs completed.


This news essentially represents a potential ticking clock counting down as GMC and Chevrolet dealers experience the highest levels of defection once vehicle warranties expire. The warranty period has always been the time to build and nurture customer relationships. By reducing this amount of time, these dealers will be forced to expedite any retention efforts or risk losing customers to independents. Customer retention is a challenge in itself, and the luxury that warranty coverage provides a dealer is time. Some of that will be taken away soon.


However, a potential positive side effect is that these dealers will be able to capture more of the most lucrative type of service work – customer pay –sooner than has previously been possible. They will also be able to increase their basic service revenue stream as soon as free maintenance disappears. This second side effect is, however, very much dependent on the dealer’s ability to retain the customer after the warranty expires. As well as to entice consumers to choose them for basic services immediately after purchase.


Perhaps this move by General Motors could present an opportunity for dealers to increase service department revenue earlier in the customer relationship. It will depend on if these dealers make an effort to build value, trust and loyalty early in the customer relationship. Dealers that fail to immediately improve their customer experience may find that the service work they used to rely upon disappears.

Views: 71

Tags: GM, chevrolet, customer, general, loyalty, maintenance, motors, repairs, retention, service, More…warranty


Oops... You need to stop "Lurking" on ADM and become a more genuine Automotive Professional by completing your membership registration. As a registered ADM Member, you can post comments, publish your own articles (be a star!) and start Forum discussions. Stop being an online "Peeping Tom" and JOIN ADM RIGHT NOW!

Join Automotive Digital Marketing

Automotive Professional Network and Resource Exchange for Car Dealers, Managers, OEM and Marketing Practitioners seeking Best Practices.

ADM Sponsor

William B. Terry
Rated by Super Lawyers

loading ...

ADM Badge


Based On Your Interests...

ADM Consulting, LLC

Onsite/Offsite Combination ADM Consulting, LLC Professional Services
Select the maximum monthly investment you plan to make
Sign up for

Automotive Marketing Tools

Get ADM Toolbar

Click here to take the ADM Member Survey

Getting too many emails from ADM? Click mailbox below to control which types of alerts and updates you are sent......



ADM Professional Services
Phone Consultation
Topic or Issue:

Top Automotive Marketing Forum Discussions

Share the Best Content w/AutoMarketing Community

© 2020   Created by Ralph Paglia.   Powered by

ADM Badges  |  Report an Issue  |  Terms of Service