Federal Government Gets Out of the Car Warranty Business

The federal government's automotive task force has declared that the new General Motors and Chrysler, which have emerged from bankruptcy, are ready to stand on their own. Yesterday, new task force head Ron Bloom announced that the feds are withdrawing the government-backed warranty guarantees on new vehicles sold by GM and Chrysler. Those guarantees were designed to make potential buyers feel secure about pulling the trigger while the two companies reorganized.

"With the successful emergence of the new companies, consumers can now feel assured that the companies have the financial wherewithal to meet their warranty commitments on a continuing basis," Bloom told a House Judiciary subcommittee.

The Obama administration invested $641 million in the warranty program, all of which has been returned to the Treasury -- with interest. GM says it never actually needed to use that money, and Chrysler doesn't comment on warranty figures, according to Automotive News.

Posted by

Joanne Helperin July 23, 2009, 12:13 PM

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Automotive Consumer News, Car Warranty, Chrysler, General Motors

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Automotive Task Force, Car Warranties, Chrysler Bankruptcy, General Motors, Ron Bloom