Issue Date: Warranty Administrator for Dealers Oct 15, 2010, Posted On: 10/15/2010
GMC and Buick to expand loaner vehicle program Tell me if you have heard this one before. Factory comes out with a great new idea that sounds like a total win-win-win for dealers, customers and the factory. The factory agrees to substantially subsidize the cost of the program and it is a deal too good to pass up. Then in about six to 18 months when the banners are taken down, the factory brass that dreamt up the program have moved on to new posts, and the bills start coming due. Suddenly, a program that has been promised to every customer is not being subsidized quite the way dealers envisioned.
Since the promise was made to customers, dealers are left stuck with the bill to satisfy the expectation. That could be the fate of a loaner program GM is proposing for GMC and Buick dealers. GMC and Buick are considering a courtesy loaner program for customers getting warranty service on their vehicles as a way to build awareness of the company's products. GM may start the service in the "next couple weeks," Brian Sweeney, vice president of sales for Buick and GMC, was quoted as saying in a Forbes article.
Here is the rub and why this program might be a little too good to be true. GM is looking at matching the efforts of high-end manufacturers like Lexus' TRAC vehicles in loaner service and BMW's Service Loaner Program. The difference is the volume of vehicles sold at your average BMW and Lexus store and those at a Buick store. Without GM underwriting almost the entire cost of the vehicle, why not continue to use Enterprise Rent-A-Car, as predominately done now, to offer alternative transportation.
The upside to such programs is that typically the payment or subsidy is handled as a direct payment or credit. Meaning no more rental vehicle claims, making the warranty administrator and advisor's job a little easier.