MNVette

In the local paper today (Minneapolis Star Tribune, page D1) appears a story that should give anyone thinking of buying an after-market extended warranty a reason to think twice.

The story involves what happened to thousands of people who bought extended warranties through a company called "Ultimate Warranty Corp." They sold extended warranties through various car dealerships across the U.S. Well, UWC has gone out of business, leaving approximately $15,000 in assets in their warranty fund to cover an expected $48 MILLION in claims. UWC's insurance carrier has been put into receivership (like a bankruptcy) in South Carolina because of these losses, so that means that more than 137,000 people WHO PAID FOR AN EXTENDED WARRANTY now have nothing. And, of course, the car dealerships (who got 10-50% of the warranty purchase price in commission) are claiming that it isn't their responsibility to help their customers with worthless warranties.

This is exactly why extended warranties will never be purchased by me.

Thoughts?

kornfreak_401

bad bull

ZL-1

As I always tell my friends, buy FACTORY extended warranty or NO extended warranty.

MNVette

The GMPP is administered by a private third party, not GM. You aren't actually buying a "factory" warranty, but a guarantee that someone else will cover the bills.

Dogue

I'm not big on extended warranties but I plan on purchasing a GMPP extended warranty before mine is up. I would never purchase one from a third party, like the one mentioned in the story, but GM's plan isn't too bad and can't hurt when it comes to sell or trade.

User 020720

This is why I purchased a GMPP.

vetdude

No news here. Many of the "fly by night" warranty companies have many out of millions of dollars. GMPP for the Z06; Acura Warranty for the MDX have saved me hundreds.

MNVette

Again, GMPP is NOT administered by GM - a third party takes care of it, and the third party takes care of the bills, not GM. If this can happen to UWC, it can happen to GMPP as well. That is the point I'm making.

GM's own GMPP website makes it clear - it states that GMPP is the only plan "endorsed" by General Motors. Why would GM need to "endorse" something it controlled? Short answer - it is a product offered by a third party that GM happens to promote. GM isn't standing behind it - the third party is.

Joe C

i've purchased GMPP extended warranties on my last two corvettes. both times, i traded them in, cancelled the warranty, and GM pro-rated the coverage and refunded the balance. i get the extended warranty for three reasons - one, usually anything major repair is going to be kinda pricy, two, if i ever try to sell the car outright, having a GM transferrable warranty is a big selling point. finally, just for my own peace of mind. i get the GMPP's on-line just before the factory runs out, and usually get 4 additional years, 40K miles, and $0 deductable. pricing about $1100.

ZL-1

It doesn't matter who administers it, its not going to "fold" after collecting premiums for a few years, as we've seen so often (unless GM folds, LOL)...GM couldn't let that happen.

Victoryred 08

I Agree.

Joe C

if this is true, i would think GM would stand behind the warranty contract - ???? just exactly how do you know that GM subs the policy out to a third party? all my paperwork came from GM and nowhere does it state a third party adminstrator.

MNVette

This is directly from the sample contract as posted on the GMPP website:

"The obligations of the provider under this Agreement are covered by a policy of insurance issued by MIC Property and Casualty Insurance Corporation, Executive/Administrative Offices: 300 Galleria Officentre, Suite 200, Southfield, MI 48034."

What about this confuses all of you? GM is NOT backing any of this. Some company called MIC is the ultimate backer of the warranty, and they're licensing GM's logo, etc. to market themselves. GM agreed to promote them as their "endorsed" extended warranty provider.

Everyone in here thinks GM is going to back their extended warranty. It doesn't say that anywhere in the contract they have posted online, so why do you think GM is going to pay for your repairs if this MIC company folds?

There is also reference in the contract to GMAC Service Acceptance Corp. being the initial provider of services. GMAC is part of GM's failing lending arm that it recently sold off, so this really isn't GM offering you anything at all. Anyone feel good about GMAC remaining solvent in this housing market?

As for the PR issue, I agree that GM would be smacked pretty hard if it didn't honor warranties, but if it comes down to having to write checks for millions of dollars or suffering some PR issues, which do you really think will win?

User 020720

Is the sky falling yet?

Low12s

Never buy em. They are pure profit for the seller

05C6spdvert

If I were going to buy one, I would wait until the factory warranty was just about up. I don't get why people cough up the money when it isn't needed for years to come.

With the new powertrain warranty, they aren't needed as much either.

VatorMan

Unless you have a $4500 part replaced under extended warranty. BTDT.I will always get an extended warranty for my car.

crazyeddie

You obviously did not buy my C6. If you could ever make a case for an extended warranty, mine is it. As far as buying a third party warranty, well suckers are everywhere-- eddie

Corvette SSX

I have never understood this either.

C6ToGo

Ouch...what part costs $4500?