Story Created:
Jun 16, 2009 at 6:42 AM CST
Story Updated:
Jun 16, 2009 at 6:42 AM CST
(June 16, 2009)
Main Topic: Your Dealership closes – What About the Warranty and Service?
Both General Motors and Chrysler have announced that they are effectively closing nearly a total of 2,000 dealerships across the country by not renewing their franchising contracts. After filing for Chapter 11 bankruptcy protection, Chrysler announced that it will terminate 798 franchise agreements with dealers across the U.S. this month. This amounts to about 25 percent of Chrysler dealers and affects approximately four million customers who bought or serviced their cars. General Motors has also announced that they will not renew agreements with 1,100 dealers in the U.S. and 300 of the 700 GM dealers in Canada.
When will the affected dealers close their doors?
Effective June 9, 2009, the affected Chrysler dealers will not have their franchise agreements renewed. Over 1,000 GM dealers have already received letters notifying them that GM will not renew their agreement and most affected dealers will see their contract expire in October of 2010.
What if I traded in my car for a new one and the dealer closes its doors without paying off the loan on my trade-in?
While a dealer is supposed to pay off the loan on a vehicle they accept for a trade-in, they might not if they go out of business. When this happens the original owner could be liable for making payments on both cars or the lender could go after the person who bought the used car from the dealer. While this is a rare occurrence, it can happen and states such as California have created funds to reimburse such victims.
Will my warranty or extended warranty be affected?
A warranty or extended warranty is offered by the automaker and is not affected by a dealer closing. Both Chrysler and GM have indicated that they are committed to honoring their manufacturer’s warranty despite declaring bankruptcy. Extended auto warranties, such as the protection plans offered by GM, are backed by a separate company which is affiliated with, but not financially tied to, the company that actually manufactures the vehicles.
How will I know where to take my car for service?
Both GM and Chrysler warranties will be honored by any respective certified dealer. Chrysler has stated that the millions of customers who bought their cars from affected dealers will be notified where they can take their autos for service. GM owners can use the dealer finder at www.gm.com/vehicles/dealer to find their closest option.
Scam of the Week: Telemarketing scam involving prescription drugs.
This telemarketing scam is especially effective in targeting seniors. If you are not a senior, you most likely have seniors that are relatives or close friend. The telemarketer calls and states that he or she is with some drug company and that the intended victim’s medicine is ready for shipment. The victim is asked to furnish a credit card number. Of course there is no medicine and no such drug company. Many seniors with health problems can easily be fooled with such a call since they are often waiting for a call about prescription medicine. If you are a senior caregiver, advise your senior about giving information like credit card numbers, social security numbers, etc. over the phone.
