I bought an extended warranty on my HHR and am concerned if it'll be a worthless piece of paper if GM goes bankrupt, restructures, sells off GMAC etc.
Anyone have any thoughts?

 

Couldn't tell you what would happen in bankruptcy a judge would decide that.
I would think that GMPPs (General Motors Protection Plan) money is seperate from GMs money.

GMAC is already half owned by the investment group Cerebus, who also own Chrysler. GMAC doesn't have anything to do with GMPP other than they will finance the plan when you purchase a vehicle.

When you pay for a GMPP that money goes into their fund to pay for claims as they arise. I have no idea how GMPP is doing, but haven't heard that they are in financial trouble.

 

That's the biggest concern about the bankruptcy talk. People aren't buying cars because nobody knows what will happen with the warranties.

In the short run, if GM were to file and obtain DIP financing, all the warranty claims are fine until the final phases of the bankruptcy. If the company is eventually liquidated, then the court will either find a buyer for the warranties, the government will create a warranty claims corporation, or the warranties will become worthless. Nobody knows for sure because a bankruptcy with a company as large as GM has never happened before, so it's not really clear if it'll happen like Daewoo (dead warranties) or AMC/Jeep (Chrysler picks 'em up).

In the end, there's nothing you can do except either get a refund of your warranty, or keep it and hope for the best.

 

The following paragraph appears in my GMPP contract (page 7):

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. In the event the provider does not pay any CLAIM or make any refund or consideration due, including the return of any unearned provider fee, within thirty (30) days after proof of loss has been filed or the provider ceases to do business or goes bankrupt, YOU may apply directly to MIC Property and Casualty Insurance Corporation for the protection afforded by this agreement.

 

As Circuit City went out of business I found out that the warranty I purchased for my Television last year will be handled by someone else.

When they bought their debt they apparently bought their warranty obligations as well? I am sure they bought it for pennies on the dollar tho.

 

That seems to sum it up.

 

Decision made...requested a refund. Learned a bit too! The amount you pay for the extended warranty begins depreciating immediately.....NOT once the factory warranty runs out. My 08 is still under factory warranty, but I've lost 500 bucks on the extended warranty already! Granted, $100 is an admin. fee. I'll take the cash back now and learn from this. The money I paid would pay for lots of repairs after the factory warranty. Its only AFTER this that I'd start losing. Which brings me to the idea of...if a vehicle requires an E.W. why buy the vehicle in the first place? If it proves to be a headache during the factory warranty, I'll trade it before extended warranties become an issue! Live and learn....

 

Because a lot of parts just aren't that cheap.

When I was working at Carmax, we had a guy who bought a used Range Rover. Added an extended warranty for a little over a grand. Two months later the BMW-sourced engine blew a head gasket. The warranty company had the engine replaced at the local Land Rover dealer for $10,000.

The customer was out the $50 deductible.

 

Yeh, I hear ya. I bought it originally for that reason, but I'm deeply concerned about the future of GM, GMPP, its dealer network, parts supply etc. I love my HHR and other than oil changes, its been great! I'm just not wanting to roll the dice 2-3 years out......

 

This is probably not the right place to post this... But I heard this last night on the news. A gallon of gas cost more than one share of GM stock...... And yes, I was also wondering about my extended warranty!