GM & Chrysler warranties

June 5, 2009 Your Chrysler or GM vehicle may ride just fine now but what happens if it needs repairs in the future? Well, current and prospective owners of those cars can breathe easier. The New Chrysler and GM are promising to guarantee all present and future warranty claims.

When it rains, it pours inside Bill Buchecker's 2007 Jeep Wrangler. So Bill sued Chrysler under the New Jersey lemon law.

"They promised they would give me my down payments back and all my lease payments back."

Bill says Chrysler also agreed to terminate the lease.

"So I went out and purchased another car."

But Bill says after the auto giant filed for bankruptcy Chrysler started to change its tune about honoring the buy-back. And Bill still has not received any refund checks and he isn't the only consumer in this situation.

"The people who had claims and won weren't getting paid, there were people who had checks they received and bounced, there were people were who made promises that were just never fulfilled," said Robert Silverman of the Lemon Law Firm.

A judge approved the sale of most of Chrysler's assets to Fiat but consumer advocates say the previous agreement was unclear on how warranty claims would be treated.

The good news is now, after negotiations between a local lemon law firm and the car makers' attorneys, consumer rights are clearly and permanently protected.

Chrysler tells Action News it will: "honor all warranty repair requests and service contracts."

And Chrysler said when it comes to "judgements, settlements and new and ongoing complaints related to lemon law ... Chrysler will assume all warranty and lemon law obligations after the close of the transaction."

So consumers can go to Chrysler directly with issues.

"If that doesn't work they can hire a lawyer and now they have an avenue of redress to go after the New Chrysler because they are now accepting responsibility for any car sold 5 years back in time from the date of sale which will take place any day now."

If you're driving a car made by General Motors you can have the same peace of mind even though G-M has also filed for bankruptcy.

"They are maybe forming a new company, New GM, but the New GM is taking all the responsibility of warranty claims and lemon law claims with it after the transaction," Silverman said. "So consumers are seeing a delay in getting paid and a delay in handling their claims but it's a delay only."

Consumer advocates say GM and Chrysler consumers will get paid in the long run.

"It feels great but I still don't have the check in my hand," Bill said. "Until that check clears then I'll have a smile on my face."

More information:

Full Chrysler statement on warranties and lemon law:
On the record...Chrysler has supported our brands and our customers from the very first day we entered bankruptcy. Indeed, maintaining our warranty commitments to customers were among our first motions brought before and approved by the bankruptcy court, enabling Chrysler to honor all warranty repair requests and service contracts, goodwill and continue to produce and support quality vehicles. The only piece we were precluded from acting on were judgments, settlements and new and ongoing complaints related to Lemon Law because this activity was automatically stayed by the bankruptcy process. However, in the course of a complex and challenging bankruptcy process it was decided, and approved by the court, that Chrysler will assume all warranty and lemon law obligations after the close of the transaction.

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