GM Rolls Out GM 'Total Confidence Plan' for Buyers

At a press conference on Tuesday, General Motors has announced its "Total Confidence Plan," designed to offer buyers both financial and warranty protection for GM vehicles during the downturn in the economy. The plan, although similar to ones offered by Hyundai and announced in the past few days by Ford Motor Company, is touted by the company as providing additional protections to the customer.

The points of the plan, according to GM's press release, are:

* Payment protection for the first 24 months of ownership. GM will make up to nine payments for up to $500 per month if you lose your job.

* Finance a new GM vehicle and GM will help protect its retail value at trade-in time on your next GM vehicle.

* GM's in car security and information system, On Star, for a year

* 5 year/100,000 mile limited powertrain warranty with roadside assistance and courtesy transportation

During the press conference, GM was mocking Ford for having very little information about their own plan. Ironically, the GMConfidence.com website touted by GM during the news conference, is not working at this time, so details beyond the press release were rather thin.

While it understandable that General Motors is trying to do everything it can to spur sales, there isn't much in the GM Total Confidence plan to instill confidence in the buyer.

The payment protection plan is certainly a good start for people worried about losing their job, and is indeed currently best in the industry, with 24 months of protection (vs. 12 for Hyundai and Ford). But this type of coverage has the potential of being easily matched or bested by its stronger competitors. In fact, it is now even being offered by individual dealerships.

Protecting a car's retail value at the time of trade in is an interesting proposition. An an industry full of fine print, asterisks, and dense copy read at a rapid pace, it will be interesting to see how GM defines "retail value" when it comes time to trade in the car you buy today. And if GM's situation is as grim as President Obama's recent tough talk would lead us to believe, will there even be a "next GM vehicle" for you to purchase when you want to trade it in?

On Star for a year is probably the least value in this package. While GM's service is certainly nice to have if you're in a major accident, your car is stolen, or you've locked your keys in, how often do these events happen to the average buyer, and does having this feature make up for the lack of other standard technology in GM vehicles, most notably navigation systems.

The 5 year / 100,000 mile limited powertrain warranty with roadside assistance and courtesy transportation again is also nice, but something that other manufacturers could easily add to their offerings if they don't have it already.

The problem with all of these items is that they're being offered by a company with an unknown future, which is probably the single biggest issue that GM, Chrysler, and Ford have in trying to sell their cars. Nobody wants to buy a car from a company that is no longer in business or has restructured to the point where they no longer support what they sold in the past. Just ask Daewoo owners. Unless GM fleshes out the plan a little more, it is unclear if any of these confidence items, except for the payment protection plan, which is handled by an outside agency, will still be honored if the company is restructured, or worse, goes out of business. And given the fact that GM's quality is much improved, but still lackluster as a whole, it is difficult to imagine people wanting to take a risk on a $20,000 or $30,000 purchase of a GM vehicle without either some substantial discounts or some reassurances that there will be a General Motors around to support the vehicle. And then there is the question of the resale value of any GM product if the company goes out of business or restructures.

The GM Total Confidence plan is a nice additional incentive for GM buyers, but falls far short of providing GM buyers confidence that their major vehicle purchase is secure. Hopefully this is only a minor step in GM's attempt to regain its footing in the industry and save itself from failure.