What’s this? Good news from General Motors? Looks like that just might be the case, that is, if you’re worried about being able to make payments on your new GM car or truck. General Motors call it the “Total Confidence Plan”, and it looks quite similar to other plans already out there by Hyundai and (I want to say) Ford. So even though GM might be teetering, and a lot of people might be worried, General Motors says, “Don’t be.”
Is this for real? Let’s see.
Announced on April first, but apparently no joke, the General Motors’ Total Confidence Plan promises to protect a customer’s paycheck, investment, vehicle and family within a tough economy. Or at least that’s the line in the press, and I’ve got to say I’m skeptical about it protecting your family.
Essentially the newly announced plan protects customers in case of job loss by providing up to $500 a month for payments, for up to nine months. OK, that’s very nice of them, and that amount is aimed squarely at the middle class, which is also quite nice. But it also doesn’t leave you completely off the hook. Note that you only have nine months to get your act together and start paying, or you’ll still end up getting a visit from Otto the Repo Man.
It’s more than just taking care of your payments for you for nine months, The package also protects the resale value of the car, after half the payments have been made, should it become worth less than the balance of the loan. That’s also very nice & considerate and yadda yadda yadda … but the first question that raises for me is: “What would cause the resale value of my new GM car to drop THAT much that it puts me underwater on the loan?”
Well, one thing that COULD lower your resale value on a car your still paying off is if the company goes bankrupt, and/or completely folds. And if that’s the case, will GM still honor this? Would they have to as part of a bankruptcy filing? Jesus, I don’t know, because when you get into finances at this level and start talking about one of the largest companies on the planet going belly up and how it might affect car loan holders, I’m WAY out of my area of expertise.
Anyway, as part of this newly announced Total Confidence Plan, you also get one year of OnStar standard and fully backed, 5 year/100,000 mile limited powertrain warranty with roadside assistance and courtesy transportation. Again, this is all nice frosting, and I wouldn’t turn it down, but the ultimate question is this: Will this help the sale of GM cars?
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