Think Pieces

Michael's thoughts on the auto industry, its products, and/or this website.

The Logic of Out-of-Warranty Assistance

Just last month I added a section on extended warranties to the model information pages. It reads, "While for most people extended warranties will not pay off, for some they will pay for themselves many times over." Frankly, for most cars they aren't a smart buy. Unfortunately, my wife's PT Cruiser is not "most cars," and I don't always notice a smart buy when I see one. Some companies step up when a major part fails unexpectedly early. Chrysler did not, even though this would have been in its best interest.

Transmission fails at 52,000 miles

As detailed in the piece on leaky chrome wheels, due to corrosion all four wheels on my wife's car started leaking air around the valve stems about the time the warranty expired. We ended up replacing them a few weeks ago. Chrysler picked up half, leaving us with $500.

Soon afterwards we learned that the car needs new front lower control arms, to the tune of about $800. Apparently the PT's front suspension is poorly designed, making this a common problem.

The remote keyfob and horn have also ceased to operate, but these are relatively minor annoyances.

We've got bigger problems to contend with. Last Friday, the car broke down about 30 miles from home. We had it towed to the nearest Chrysler dealer. The diagnosis: a failed torque converter has also wiped out the transmission pump. At 52,000 miles. The bill: $1,690.

A bad bet

We don't have an extended warranty. When we bought the car, I thought it had a 7/70 warranty on the powertrain, as this is what the seller honestly claimed it had. But when I went to transfer the warranty, I learned it was not transferable. Chrysler introduced a 7/70 powertrain warranty around March 2002, then made it transferable around July 2002. This car was originally bought in May.

A dealer offered to sell us an extended powertrain warranty for about $1,000. I declined, as I couldn't mentally justify paying this much for something I thought we had already paid for. Also, powertrain failures are rare these days, so $1,000 seemed high for such limited protection.

Not rare enough.

The logic of out-of-warranty assistance

Facing a $1,690 repair bill, and with the lower control arms still to contend with, I called Chrysler Customer Care. Chrysler Customer Care put me on hold for about 20 minutes while it called the dealer, then declined any assistance because the car is out of warranty.

Chrysler has no legal obligation to cover this out-of-warranty repair. But it still makes a lot of sense for them to do so. Even if I were just a normal customer, they'd likely lose every sale for the rest of my life.

Beyond this, people in situations like mine talk. When people hear that Chrysler transmissions can fail at 52,000 miles and that, when they do, Chrysler Customer Care doesn't, they are either much less likely to buy a Chrysler or will not be willing to pay as much for it. The resale values for out-of-warranty cars will be depressed. Which will harm existing customers' ability to trade their cars in for new Chryslers. Which will increase the need for generous incentives to make the cars competitive.

Based on this logic, failing to pick up at least a portion of a transmission repair ultimately will cost Chrysler far more than $1,690.

Thanks for reading.

Michael Karesh, TrueDelta

First posted: October 5, 2006
Last updated: November 17, 2006

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