Car Warranties If Auto Makers or Dealerships Go Under

While the US auto industry is struggling to survive, many people who have already purchased a car have some very valid concerns. Major car makers scramble for financial stability, and this impacts many other companies too. Those companies who make the parts for cars depend, in a large part, upon large orders from the new car plans. In addition, local car dealers and service departments work with the large car companies. If the car maker goes under, and the auto parts makers go under, how can local auto dealers and their attached service centers survive?

What Does This Mean For Consumers?

If the biggest car companies, like GM and Ford, can hang on, experts assume they will do everything they can to honor the car warranties that have already been issued. They must keep consumer confidence, because if the word gets out that people have trouble getting warranty work done, sales will certainly fall.

In fact, the major automakers have already made statements to assure their customers that honoring auto warranties will be a major priority. Even though the creditors could, in theory, try to block the expense of warranty work, they will probably understand that this obligation is an important one if they want the debtor to maintain their business and ever turn things around.

What About Local Car Dealerships?

But the reality is that repair work and service get performed at the local level. Many car buyers go to the same dealership where they purchased the car. If that dealer closes, work may get transferred to another dealer. The process of getting a car repaired could become less convenient. In addition, car parts makers may have trouble providing a supply of parts, and everything could take a lot longer.

Warranties will almost certainly still be honored, but getting that work done may take more effort and patience on the part of the car owners. If possible, this may be a good time to make sure that the warranty, or a private auto club, includes a subsidy for renting alternate transportation if you depend upon your car every day.

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