GM And Chrysler Warranty Assistance To Come From TARP Fund

March 30, 2009

In our post about President Barack Obama's address regarding GM and Chrysler's restructuring, we told you earlier that the government has promised to back all warranty claims from both companies in the event of Chapter 11 bankruptcy proceedings or worsening financial troubles. Said Obama: "Let me say this as plainly as I can. If you buy a car from Chrysler or General Motors, you will be able to get your car serviced and repaired just like always."

Analysts claim that bankruptcy is looking more and more certain for the two automakers whose financial situations continue to worsen in step with the economy. Obama's pledge to cover warranty costs answers one of auto execs' biggest claims against Chapter 11; they've stated that potential buyers would be wary of cars from companies that might not be able (or solvent) to repair them and honor warranty claims.

Should government assistance be required for warranty service on Chrysler or GM vehicles, it would come from Congress' $700 billion TARP fund.

[source: AutoWeek]

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