Q and A: GM Car Owners Still Covered
Yesterday, General Motors entered bankruptcy protection as Chrysler emerged from it. Both historic actions raise a number of questions -- especially for those who own vehicles made by the two struggling automakers.
I have a GM, Chrysler or Dodge vehicle. Is my warranty still good?
Yes, under the terms of the federal government's Warranty Commitment Plan announced in March. Extended warranties also are honored. The same is true for Chrysler and Dodge vehicles. Owners of GM vehicles purchased before bankruptcy will continue to have their warranties honored by the company.
Does bankruptcy mean GM is going out of business?
No. GM is entering a Chapter 11 restructuring in which a troubled company goes to court and asks for protection from its debts and time to figure out what to do next. Typically, debt-holders get a percentage of what they are owed so the company can remain in business. Another type of bankruptcy, Chapter 7, is a going-out-of-business exercise. It's when a failed company is sold off for parts.
What if I own a Hummer or a Saturn?
GM has been shopping its Hummer and Saturn brands. Their warranties will still be honored by the manufacturers, even if they are sold to a foreign automaker, GM said yesterday.
Is my GMAC loan affected?