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Goodbye, lifetime service contracts!

Discussion in 'Mopar News' started by Dave Z, Dec 4, 2018.

  1. Dave Z

    Dave Z It's me, Dave
    Staff Member Level III Supporter

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    Take yourself back to July 26, 2007. Chrysler Corporation had been taken over by Daimler-Benz a mere nine years ago, and had apparently spent most of that time denigrating the quality, design, and engineering of their American conquest. Now, in July, Chrysler was run by Cerberus Capital Management, and with a stunning amount of high-cost debt to pay off.

    [​IMG]

    How could Chrysler both assuage customers’ fears of poor quality and raise cash quickly? One answer, dating back decades, was longer warranties; another was letting customers buy lifetime service contracts. If anything should go wrong, Chrysler would pay the bill for fixing it. Don’t worry about your transmission or engine, Chrysler said; if anything goes wrong, we’ll take care of it. Just pay us some money now (say, $2,000), and we’ll cover powertrain, or air conditioners, or the entire car.

    The deal wasn’t just to make sales, either; buyers could get a policy that would cover any car they’d purchased (new), going back four years. That meant that, in theory, the buyer of a 2003 Dodge Neon would buy a lifetime service contract that would keep his or her car alive into 2018, at little cost.

    [​IMG]

    Fast forward to 2018, and Chrysler—or, rather, FCA US—is doing much better. Net debt is about to become zero, or has already become zero; retail sales have skyrocketed. But there are thousands and thousands of owners with old service contracts, and every time something goes wrong—a water pump fails, a transmission starts slipping—FCA Service Contracts is on the hook for the repair.

    Service contracts were a terrific idea in 2007; maybe not so much in 2017. So, after an eleven year run, FCA US has finally dropped the plans (now dubbed Mopar Vehicle Protection), as of December 1, 2018.

    Buyers can still get a wide range of vehicle protection plans that cover just powertrain, just a/c, oil changes, or the entire car. The top plan, though, only goes up to eight years or 125,000 miles.

    [​IMG]

    Current lifetime contracts will still be honored until either the cars disappear, through crash or sale, or the value of the car sinks below the cost of the next repair. At that point, Chrysler has the right to pay for the value of the car, rather than the repair, and buy themselves out of the contract. Until then, if you have that 2003 Neon and lifetime contract, just keep racking up those $200-$1,200 repairs. Have that air conditioner evaporator replaced! Just don’t try to get anything fixed if it costs more than $1,580, and drive very, very carefully.

    Lifetime contract owners must have their vehicles periodically inspected by a dealer.

    Read the whole post here.
     
  2. HotCarNut

    HotCarNut Defender of Reality
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    Glad I bought my new Jeep GC Trailhawk when I did this summer. Got the Lifetime Warranty and I'll be happily making FCA pay to keep it on the road until 2038! ;)
     
    superduckie5000, Bajanbuoy and Dave Z like this.
  3. Tin Man 2

    Tin Man 2 Active Member

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    Please remember that when Daimler stole Chrysler we were the most profitable auto company in the world, We were bled dry to fund Daimler Benz who had big quality issues. Now we make big profits and Fiat will spend 5.7 BILLION to rebuild their plants. Big Banking and Big Government strike again.
     
  4. HotCarNut

    HotCarNut Defender of Reality
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    Seriously? It's 11% of the capital budget. The other 89% is being spent OUTSIDE OF ITALY. I'd bet money that over 50% of capital spend is on the plant shuffle in the US, including what was invested into Toledo for JL and JT. I'm all about American jobs and American investment, but posts like this completely ignore the money that is being invested and spent here. I guarantee you that there are Italians right now pissed that the ancestral home of the Agnelli family and FIAT is only getting 11% of the capital allocation AND that workers are being laid off at some Italian plants.

    FCA is a global company with a global manufacturing footprint. That means that capital and resources will be invested globally too.
     
    T_690, Bob Lincoln, Doug D and 3 others like this.
  5. Dave Z

    Dave Z It's me, Dave
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    I have to agree. The first thing Sergio did was end the Daimler policy of outsourcing, and have Chrysler start making more of its own parts. He moved from Mexican and Chinese suppliers to American in-house production and suppliers. He then invested in almost complete rebuilds of just about every plant, replacing robotics and other machinery that Daimler had neglected since taking over.

    You can’t criticize FCA every time it invests in Italy or Brazil; it’s invested very heavily in the USA. Had they taken the approach of Daimler, Cerberus, or, well, the one you're suggesting it takes, (Dodge/)Ram and Jeep would probably be continuing their Daimler-era dive to the bottom - because then they would have invested more in Italy. As it is, they are trying to rebuild Maserati and Alfa Romeo, because they have rebuilt Dodge, Ram, and Jeep, and tried to rebuild Chrysler in a sortakinda way (brand new 200, brand new minivan, redone 300).
     
  6. valiant67

    valiant67 ...

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    There are too many brands to maintain (given present resources) so they will always be rebuilding them.
     
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  7. 55Plaza

    55Plaza Well-Known Member

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    I can only wish that when I bought my 2012 durango that my dealer had told me of the availability of lhe lifetime service contract ;)
     
    HotCarNut likes this.
  8. GasAxe

    GasAxe Well-Known Member

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    I still want to believe the completion of the 0 net debt quest will free up capital to finally update/flesh out the brands. As time drags on though, the backlog of new product "coming" seems like an unrealistic tidal wave of new models. I guess I'll keep giving them the benefit of doubt that the 2020-22 reveals are on schedule, but I won't be surprised if a healthy portion of the plan gets "revised".
     
  9. awyseguy

    awyseguy Well-Known Member

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    Worst part is that the Warranty brochures Chrysler provided us with as salespeople.. Stated NOTHING about the repair being more than the value of the vehicle would allow them to buy their way out of the warranty. That's not even in the fine print contract that finiance provides to the customers whne they purchase.

    Our 2006 Chrysler Pacifica shows in DealerConnect that it is supposed to be covered until 999,999 miles or Feb 12, 2089. Apparently they decided to change the rules in the middle of the game. I think Fiat will end up in legal disputes for these deceptive practices. We still have the original documentation that we were passing out to customers to sell warranties. When they said lifetime, sales and management went on a scavenger hunt to find the loopholes and fine print.. Sales, Service, and the District Manager could NOT find this information.... Perhaps because they had not yet decided to make an excuse to get them out of warranty repairs.

    While our car may have 205K miles on it.. It's gotten by the last 12 years with only 3 door dings and center caps that terrible.
     
  10. HotCarNut

    HotCarNut Defender of Reality
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    Yep, and that’s why I was willing to buy it on my $56k GC, but told my brother-in-law not to bother on the Dodge Caliber he bought back in 2012. I figure even 20 year old GCs go for $3-5k, so unless it blows a piston through the block I should be covered for nearly everything. Hopefully with good maintenance I can get 300k mikes out of it!
     
  11. CudaPete

    Ad-Free Member

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    They'll be fixing Wranglers with lifetime warrantees for a long time..........Dealer just offerd me $15k for my 09.
     
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  12. red-jk

    red-jk Well-Known Member

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    I have a lifetime warranty on my 08 Wrangler. 212,000 miles on it. They have not had to do much, but it will be with me forever.
     
    Jerry Simcik and Charger Red like this.
  13. BRANDM

    BRANDM Well-Known Member

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    When I bought my maxlife policy I was specifically told by the sales person that when the repair cost was more than the truck value they would buy out the contract, so apparently he had the information.
     
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  14. Bob Lincoln

    Bob Lincoln "CHECK FAULT CODES"
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    If it's not in writing, it's a court case....
     
  15. superduckie5000

    superduckie5000 THE MAD DUCK
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    DARN !
    The Lifetime Service Contract we Have on Our 2010 4-All Wheel Drive Dodge Journey R/T has Paid for It's Self 2.5 Times Over !
    I was Looking Forward to Buying Another One !
     
    Manic59 likes this.
  16. svevar

    svevar Well-Known Member

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    This limitation is also stated very clearly (in all capital letters!) on the first page of the printed contract that Mopar mails to owners upon plan initiation. The plans include a 60-day penalty-free cancellation period (also clearly stated), so anyone surprised by the terms would have ample time to back out.
     
    Dave Z likes this.
  17. somber

    somber 370,000 miles

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    Oh, that yellow NSRT-4 posted at the top - makes me long for one. Awesome car.
     
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  18. Dave Z

    Dave Z It's me, Dave
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    They are probably pulling back for the same reason GM and Ford are talking layoffs and closings: the economy is expected to slow down quite a bit in 2019.

    Not surprising when you look at the stock market over the last two weeks. (It was pretty inflated to begin with, IMHO, so some of this could be written off as natural correction, but it still influences buying patterns.) Dow Jones and S&P ended up lower than on Dec. 12, 2017, Nasdaq’s up 2%. Still doing pretty well compared with 2016, but it's the movement that people think about.
     
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  19. awyseguy

    awyseguy Well-Known Member

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    When did you get your warranty? We got ours in 2006 when I was still in sales, and the only information anyone could tell us then, as if the repair was under $6000 they were supposed to automatically do it, over that, call for authorization. And THAT was what we relayed to the customers from then on. The last year or so, it seems more like they're changing the fine print. Even the parts covered is different in the fine print from the sales materials we were passing out. I have a few originals left. Maybe we should start circulating them through corporate.. I'd just like to know we're going to have Lifetime Warranty as long as we want to drive it. We've had 2 of our other cars since the early 90s too.
     
  20. BRANDM

    BRANDM Well-Known Member

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    I thought it was in the contract, but couldn't remember and didn't get a chance to look at it last night, but didn't want to say that without being sure. Thanks for the infromation.
     

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