GM's Flying Cars

Yesterday I found myself sitting in sort of a media epicenter, Deutsch Inc., an advertising giant, hearing ad-speak about GM's new beefed up warranty. GM's Michael A. Jackson, VP of Marketing and Advertising, shared the floor with Deutsch's Eric Hirshberg and they screened the new ads that showed GM cars rising out of gridlocked streets and flying above lesser cars. They also waxed poetic about the "viral" and "guerilla" marketing campaigns that were planned...

While I listened to all this sizzle, I couldn't help think about the steak. If that analogy eluded you what I mean is that we often lose the content in the presentation. While we look at ads showing flying cars, it is meant to represents some poor schmo schlepping his broken car into a dealership for free repairs.

Is there valuable content to this warranty program? Let me answer that by saying that a friend of mine recently bought a Toyota Prius and got the hard sell in the F&I room for an extended warranty. He bought the warranty only after finding that it had a cancellation clause. Should he cancel it, he asked me? I pointed out that the car already had a three-year/36,000 mile bumper to bumper warranty. The extended warranty wouldn't even go into effect for three years. Did it make sense to tie up your money for something that wouldn't kick in for a long time? Besides, the hybrid powertrain was covered for eight years.

While the new GM warranty extends the powertrain coverage to five years/100,000 miles, it is also fully transferable and provides roadside assistance. This will make it easier for most car buyers to turn down the extended warranty with a clear conscience. That's a big savings and a lot of coverage. So maybe there is some steak behind all this sizzle.

Posted by

Philip Reed September 7, 2006, 8:32 AM

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