Dealer Wants to Buy Back My Wrangler
01-17-2011, 07:29 PM
#44
JK Freak
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01-17-2011, 07:36 PM
#45
JK Freak
My discussion with a sales manager informed me of the following.. I can't swear to the accuracy, but this is the gist of what I was told.
Chrysler lost an arbitration hearing and was forced to replace a worn-out automatic transmission in a 2007 Chrysler that had 108,000 miles on it. It seems that the warranty does not specifically state that excess wear and tear are not covered by the lifetime warranty. Indeed, the the arbitrator noted that Chrysler specifically pushed this via their 5 year inspection policy. Clearly the intent was to originally cover normal wear and tear. This is the legacy of Cerberus Capital Management's mismanagement of Chrysler. This decision freaked-out Chrysler's new ownership, and they had their bean counters do an analysis of the cost associated with keeping just 10% of vehicles (of a total of more than 3 million sold) with this warranty on the road for 10 years. The cost was estimated at $2,300 per vehicle and in excess of $5k for 15 years. Thus, Chrysler offers incentives to buy back, or accept in trade any vehicle sold with the Lifetime Power Train Warranty. Dealers have a set figure that they can use to negotiate a buy-back or trade allotment. This allows them to make generous offers. Once these vehicles are sold or traded, the Lifetime Warranty is voided. Used Chrysler vehicles are then resold with a fixed mileage/time warranty. This mitigates risk and potential loss. In the meanwhile, dealers are moving new stock off of the lot.
Incentives are based upon the residual value of the vehicle. Jeeps, especially Wranglers, have very high residuals. Thus, there is more wiggle room for dealers to negotiate a trade or buy back.
My 2008 JK has the Lifetime Power Train Warranty and the Lifetime Bumper to Bumper service contract ($100 deductible). I see no reason to trade in my '08, as I'll never spend more than $100 for any repair for as long as I own it. I will own it for a very long time, much to Chrysler's anguish.
Chrysler lost an arbitration hearing and was forced to replace a worn-out automatic transmission in a 2007 Chrysler that had 108,000 miles on it. It seems that the warranty does not specifically state that excess wear and tear are not covered by the lifetime warranty. Indeed, the the arbitrator noted that Chrysler specifically pushed this via their 5 year inspection policy. Clearly the intent was to originally cover normal wear and tear. This is the legacy of Cerberus Capital Management's mismanagement of Chrysler. This decision freaked-out Chrysler's new ownership, and they had their bean counters do an analysis of the cost associated with keeping just 10% of vehicles (of a total of more than 3 million sold) with this warranty on the road for 10 years. The cost was estimated at $2,300 per vehicle and in excess of $5k for 15 years. Thus, Chrysler offers incentives to buy back, or accept in trade any vehicle sold with the Lifetime Power Train Warranty. Dealers have a set figure that they can use to negotiate a buy-back or trade allotment. This allows them to make generous offers. Once these vehicles are sold or traded, the Lifetime Warranty is voided. Used Chrysler vehicles are then resold with a fixed mileage/time warranty. This mitigates risk and potential loss. In the meanwhile, dealers are moving new stock off of the lot.
Incentives are based upon the residual value of the vehicle. Jeeps, especially Wranglers, have very high residuals. Thus, there is more wiggle room for dealers to negotiate a trade or buy back.
My 2008 JK has the Lifetime Power Train Warranty and the Lifetime Bumper to Bumper service contract ($100 deductible). I see no reason to trade in my '08, as I'll never spend more than $100 for any repair for as long as I own it. I will own it for a very long time, much to Chrysler's anguish.
Last edited by Widewing; 01-17-2011 at 07:43 PM.
01-18-2011, 02:02 PM
#46
JK Super Freak
this makes perfect sense as you are right the lifetime warranty is not transferrable.. and with used car prices high right now.. they suffer no loss on these vehicles.. move their new inventory and lower their liability for the future...
ie.. the mess GM got into with retirement funds.. couldve been chrysler with lifetime warranty repairs as these vehicles all aged out at the same time...
great post!
-Christopher
ie.. the mess GM got into with retirement funds.. couldve been chrysler with lifetime warranty repairs as these vehicles all aged out at the same time...
great post!
-Christopher
My discussion with a sales manager informed me of the following.. I can't swear to the accuracy, but this is the gist of what I was told.
Chrysler lost an arbitration hearing and was forced to replace a worn-out automatic transmission in a 2007 Chrysler that had 108,000 miles on it. It seems that the warranty does not specifically state that excess wear and tear are not covered by the lifetime warranty. Indeed, the the arbitrator noted that Chrysler specifically pushed this via their 5 year inspection policy. Clearly the intent was to originally cover normal wear and tear. This is the legacy of Cerberus Capital Management's mismanagement of Chrysler. This decision freaked-out Chrysler's new ownership, and they had their bean counters do an analysis of the cost associated with keeping just 10% of vehicles (of a total of more than 3 million sold) with this warranty on the road for 10 years. The cost was estimated at $2,300 per vehicle and in excess of $5k for 15 years. Thus, Chrysler offers incentives to buy back, or accept in trade any vehicle sold with the Lifetime Power Train Warranty. Dealers have a set figure that they can use to negotiate a buy-back or trade allotment. This allows them to make generous offers. Once these vehicles are sold or traded, the Lifetime Warranty is voided. Used Chrysler vehicles are then resold with a fixed mileage/time warranty. This mitigates risk and potential loss. In the meanwhile, dealers are moving new stock off of the lot.
Incentives are based upon the residual value of the vehicle. Jeeps, especially Wranglers, have very high residuals. Thus, there is more wiggle room for dealers to negotiate a trade or buy back.
My 2008 JK has the Lifetime Power Train Warranty and the Lifetime Bumper to Bumper service contract ($100 deductible). I see no reason to trade in my '08, as I'll never spend more than $100 for any repair for as long as I own it. I will own it for a very long time, much to Chrysler's anguish.
Chrysler lost an arbitration hearing and was forced to replace a worn-out automatic transmission in a 2007 Chrysler that had 108,000 miles on it. It seems that the warranty does not specifically state that excess wear and tear are not covered by the lifetime warranty. Indeed, the the arbitrator noted that Chrysler specifically pushed this via their 5 year inspection policy. Clearly the intent was to originally cover normal wear and tear. This is the legacy of Cerberus Capital Management's mismanagement of Chrysler. This decision freaked-out Chrysler's new ownership, and they had their bean counters do an analysis of the cost associated with keeping just 10% of vehicles (of a total of more than 3 million sold) with this warranty on the road for 10 years. The cost was estimated at $2,300 per vehicle and in excess of $5k for 15 years. Thus, Chrysler offers incentives to buy back, or accept in trade any vehicle sold with the Lifetime Power Train Warranty. Dealers have a set figure that they can use to negotiate a buy-back or trade allotment. This allows them to make generous offers. Once these vehicles are sold or traded, the Lifetime Warranty is voided. Used Chrysler vehicles are then resold with a fixed mileage/time warranty. This mitigates risk and potential loss. In the meanwhile, dealers are moving new stock off of the lot.
Incentives are based upon the residual value of the vehicle. Jeeps, especially Wranglers, have very high residuals. Thus, there is more wiggle room for dealers to negotiate a trade or buy back.
My 2008 JK has the Lifetime Power Train Warranty and the Lifetime Bumper to Bumper service contract ($100 deductible). I see no reason to trade in my '08, as I'll never spend more than $100 for any repair for as long as I own it. I will own it for a very long time, much to Chrysler's anguish.
01-18-2011, 02:22 PM
#47
JK Freak
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right but if your dealer isn’t mod friendly they could push even the 33inch tires on your vehicle voids the lifetime...
my old dealer was very mod friendly ( if they did the work) . but I suspect the leadership in Chrysler will start to look into these claims with more and more scrutiny. I plan on upgrading to the new engine anyways. I need a vehicle that gets more mileage than this one, and as the price of gas starts to rise and rise and rise most of us will too.
Id hold off for the new engine, yeah your jeep will get some more miles and be worth less... but there is no way im trading mine in for more or less the same vehicle (new int. and trackbar doesnt count in my books) with more years of paying the same money... not worth it IMHO
my old dealer was very mod friendly ( if they did the work) . but I suspect the leadership in Chrysler will start to look into these claims with more and more scrutiny. I plan on upgrading to the new engine anyways. I need a vehicle that gets more mileage than this one, and as the price of gas starts to rise and rise and rise most of us will too.
Id hold off for the new engine, yeah your jeep will get some more miles and be worth less... but there is no way im trading mine in for more or less the same vehicle (new int. and trackbar doesnt count in my books) with more years of paying the same money... not worth it IMHO
01-19-2011, 04:11 AM
#48
JK Super Freak
im not sure when ill upgrade to the new engine (if and when it comes out)... the reality is that a Jeep wrangler is still a Box and though I agree more efficiency can be achieved.. there are still certain laws of physics that need to be overcome to move a Jeep down the highway...
for gas mileage im just going to go out and buy a SMART and then ill have my Jeep for fun times and vacations.. and the SMART for daily commuting and sitting in traffic...
Chrysler picked the wrong time to start offering lifetime warranty... during very good economic times people trade their vehicles in very often.. and so the Lifetime would sell the vehicle initially.. and it would often be traded or sold before the end of the 3/36 or the 5/60 extended let alone the lifetime coming into play..
most often the people then that bought new vehicles and held onto them forever is the group of people who would take very good care of their vehicle.. often servicing it at the dealer, or at least making sure all maintenance is performed.. while not completely eliminating the chance of breakage down the line.. good maintenance practices surely reduce the chance of a claim.. so that group wasnt a concern..
enter in the economic collapse of the united states.. and what we have are several things..
1] people being forced to keep their new vehicle longer and longer
2] people that cant afford to perform every little maintenance item
3] people commuting farther to go to the job they are able to get..
so you end up with lots more miles.. lots quicker and with less PM being done on their vehicles.. which is a good recipe for a lot of money being lost by chrysler..
esp when i know of someone with a late 2007 Sahara that got a brand new engine for free... at 160,000 miles....
and as an added bonus.. since the dealer already had their Jeep apart.. went ahead and replaced the clutch at a greatly discounted price...
-Christopher
for gas mileage im just going to go out and buy a SMART and then ill have my Jeep for fun times and vacations.. and the SMART for daily commuting and sitting in traffic...
Chrysler picked the wrong time to start offering lifetime warranty... during very good economic times people trade their vehicles in very often.. and so the Lifetime would sell the vehicle initially.. and it would often be traded or sold before the end of the 3/36 or the 5/60 extended let alone the lifetime coming into play..
most often the people then that bought new vehicles and held onto them forever is the group of people who would take very good care of their vehicle.. often servicing it at the dealer, or at least making sure all maintenance is performed.. while not completely eliminating the chance of breakage down the line.. good maintenance practices surely reduce the chance of a claim.. so that group wasnt a concern..
enter in the economic collapse of the united states.. and what we have are several things..
1] people being forced to keep their new vehicle longer and longer
2] people that cant afford to perform every little maintenance item
3] people commuting farther to go to the job they are able to get..
so you end up with lots more miles.. lots quicker and with less PM being done on their vehicles.. which is a good recipe for a lot of money being lost by chrysler..
esp when i know of someone with a late 2007 Sahara that got a brand new engine for free... at 160,000 miles....
and as an added bonus.. since the dealer already had their Jeep apart.. went ahead and replaced the clutch at a greatly discounted price...
-Christopher
01-19-2011, 06:39 AM
#49
JK Enthusiast
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this makes perfect sense as you are right the lifetime warranty is not transferrable.. and with used car prices high right now.. they suffer no loss on these vehicles.. move their new inventory and lower their liability for the future...
ie.. the mess GM got into with retirement funds.. couldve been chrysler with lifetime warranty repairs as these vehicles all aged out at the same time...
great post!
-Christopher
ie.. the mess GM got into with retirement funds.. couldve been chrysler with lifetime warranty repairs as these vehicles all aged out at the same time...
great post!
-Christopher
01-19-2011, 07:30 AM
#50
JK Jedi Master
When I bought my '08 JKU a few months ago, the salesman and the finance manager both told me that the lifetime powertrain warranty WAS transferrable, and showed me the paper that it was, too. Unless they didn't know what they were talking about I got a little screwed on that, seeing as how that was one of the reasons I bought my Jeep.
The Chrysler lifetime warranty the '08 would have come with is most certainly not transferable.
It really doesn't matter what the salesman and finance manager think.
This is Chrysler's own words from the '08 warranty book:
2.4 Lifetime Powertrain Limited Warranty
A. Who Is Covered?
You are covered by the Lifetime Powertrain
Limited Warranty if you are the first registered
owner or lessee for use of the vehicle sold and
delivered on or after July 26, 2007. Subsequent
owners or lessees, even if they are within the
same family or business, are not covered.