General Motors Has Filed For Bankruptcy. Should Cadillac Owners be Worried?

With the anticipation of 1,100 GM dealers in the US and 300 Canadian dealerships soon to close their doors Cadillac owners are understandably concerned. With fewer dealerships available it could be necessary to travel further for service and repair. There are also other concerns about getting stuck with payments for vehicles traded in if dealerships choose not honor the original trade in agreements. Questions about warranty coverage will also be on the minds of many Cadillac owners. Should they be worried?

The good news is…

Although over a thousand US dealership closures may sound crippling, GM will still have more dealerships across the nation than do competing manufacturers. GM anticipates having 3,600 dealers by 2010 while Toyota currently has 1,470 dealers and Honda has only 1,304 dealers across the nation. GM has selected which dealerships will be closed based on the lowest sales and customer service volume. Most of these dealerships will close in October 2010. Therefore, the most popular dealerships will likely remain open and those that are slated to close will be around for some time. GM owners looking for the closest dealers to perform service on their vehicles can visit the GM Dealer Finder at www.gm.com/vehicles/dealer. Cadillac owners can locate Cadillac dealerships by visiting www.cadillac.com or calling the Cadillac Customer Assistance Center at 800.458.8006

The GM bankruptcy filing also affects Buick, Chevrolet, GMC, Hummer, Pontiac, Saab, and Saturn. To locate a specific dealership; consumers can contact the Better Business Bureau Auto Line.

What about getting stuck with payments for a trade-in vehicle?

If dealerships go out of business before paying off the loans on trade-in vehicles it is possible that the customer could still be liable for these outstanding amounts. However, according to the Better Business Bureau, this happens rarely. In the event that it does, states such as California have established funds to reimburse GM customers.

What about the warranty?

The U. S. Court overseeing the GM bankruptcy has agreed to allow General Motors to continue to honor its warranty commitment. GM owners can still utilize warranty coverage for repair, repurchase or replacement of vehicles. In some cases negotiation might be necessary. For example, in the event that a comparable replacement vehicle is not available and the customer is not pleased with a proposed solution a repurchase option may be arranged. All warranty negotiations can be made directly with the BBB and do not require legal representation.

For warranty disputes the U.S. Court has included The Better Business Bureau’s Auto Line program as a source of resolution. GM is contractually bound to BBB to abide by their decisions and awards granted. Claims that were established through Auto Line prior to the bankruptcy and those filed after will continue to be honored and processed as before. For specific warranty questions and additional assistance consumers can contact the BBB Auto Line at 800-955-5100

Extended service contracts will not be affected by the bankruptcy. The General Motors Protection Plans (GMPP) are provided by a subsidiary of GMAC LLC which is separate from GM. The extended service contracts are backed by MIC Property and Casualty Corporation (MICPAC) also distinct from GM and not included in the bankruptcy case. One further assurance is that GM vehicles sold during the bankruptcy restructuring will be backed by the U.S. government, as noted by the Obama administration in March.

GM reliability will still remain intact as well. GM will continue to test and monitor the safety of their vehicles. In the event of a safety recall GM must still comply with the orders issued by the National Highway Traffic Safety Administration (NHTSA) and continue to notify customers.