Ed Wallace

When Things Break

It’s hard to say when this particular consumer demand phenomenon started, but it’s a fair bet that it stems from the “goodwill” automobile manufacturers once gave, fixing things that broke outside of the vehicle’s normal warranty. That is, assuming certain conditions were met. Honda, for example,would replace items that broke prematurely if the car was not registered to a company and the maintenance had been done flawlessly by a franchised dealer. Ford,years ago, was fixing everything trying to hold onto its customers, until corporate accountants pointed out that the more Ford did, the more defections from the brand it encountered.

Of course, we should remind everyone how it used to be and how we got where we are today. Fifty years ago, the average new car warranty was just12 months or 12,000 miles, with squeaks and rattles covered for just 90 days.MIC, GM’s insurance arm, sold extended warranties but only for the seven major components; $135 bought 36 months’ protection. The standard bias-ply tires never lasted for more than 20,000 miles, brakes about the same, and used car managers would check trade-ins for rust even if the car was just a year old.

Farther back, in the early Fifties, engines rarely lasted 50,000miles before needing an overhaul. Historian Jeff Guinn’s new book, The Vagabonds, covering the annual camping trips of Henry Ford, Thomas Edison, Harvey Firestone, and John Burroughs, details one camping trip in Pennsylvania: A rock punctured the lead Packard sedan’s radiator and broke all the blades off the cooling fan; and when the guys stopped for lunch they realized that they couldn’t see the canteen vehicle. Its driveshaft had broken some miles back. Not bad for about 50 miles of driving.

Things Fall Apart

During the early Twenties, former Ford head of production Big Bill Knudsen, then running Chevrolet for GM, was asked what improvements he was going to add to the next year’s Chevy sedan. Knudsen replied that he was going to hang a small-mesh net underneath the car to catch the bolts that fell off running Chevrolets. Today a joke like that would cost somebody their career, but Knudsen’s honesty didn’t keep him from being GM’s president in the Thirties.

Twenty years ago, listeners emailed me all the time about something that had broken on their vehicle outside of warranty; how could they get the manufacturer to cover it? It’s not an easy answer, other than the basics. Some manufacturers do goodwill fixes, others don’t or do the bare minimum. But I had no idea how well any of the emailers maintained their vehicle, or whether they dogged it to death driving it. On a side note, it’s stunning how many think that the only maintenance a new car requires is simply changing the oil — often thousands of miles late.

Then again, there’s the contract law aspect. If you have a vehicle with a 5-year, 50,000-mile warranty on it and something breaks at 60,000 miles,how is asking that it be repaired free any different from having an insurance policy for five years, letting it lapse, having a wreck a year later, and calling your former agent to demand that they pay for your vehicle’s repairs?

There’s one other aspect to this worth discussing. A couple of years ago I received an email from an attorney in Dallas who drove an imported luxury sedan. He was not partial to any dealer; as he freely admitted, he took it in for service to whichever dealer had a free loan car that day. One dealer told him it appeared he had an oil leak; it wasn’t bad, but should be corrected. He ignored it because “it wasn’t bad,” and sure enough, just outside of his factory warranty, his engine blew. And so he writes me for advice on how to get the manufacturer to pay for his out-of-warranty engine.

I made two quick points. One, he had shown no loyalty to any dealer, even the one he purchased that car from. Therefore, it was doubtful any dealer felt much loyalty to him, which is critical for getting the manufacturer involved. Also, he had been warned his engine was leaking oil, but had done nothing.

But my third point was stronger: At what point during the purchase of his extremely expensive luxury car had he been offered the extended warranty and turned it down? You know, the relatively inexpensive insurance policy that would have paid for his $20,000 + engine. His response was refreshingly honest: He’d been offered the extended warranty and refused it numerous times during the course of his ownership. His selling dealer even wrote before his factory warranty expired, to remind him that he could still buy the full extended warranty on his sedan.

It Should Be Perfect, Forever

The number of emails I get from individuals who believe the manufacturer should be responsible for things breaking at 150,000 miles or more— because, apparently, nothing should break on any car, ever — has kept growing over the past few years. And they all follow the same pattern. They point out that they have gone online and found lots of other owners with the exact same problem. Or there was a technical service bulletin from years ago that sounds exactly like the problem they’re having. Or there was a recall, and they didn’t know anything about that until after the end date for the repair. But that’s tipping their hand.

If they’d been doing the major maintenance with their dealer, TSBs and recalls come up in dealers’ computer systems when they input your serial number. If you didn’t know about them, you haven’t been to the dealership.

Here’s the real deal. Name any product of any substance that sells in any volume and has the potential for abuse, and you’ll find lots of comments online about problems with that product. Yet no one, sometimes including the media, ever checks to find out if the customer ever did any maintenance, abused the car, or what.

I’m reminded of the Toyota oil sludge problem decades ago; it was all over the news. Mechanics were even quoted as saying Toyota engineers had narrowed the engines’ oil channels, so sludge happened. Toyota sent a team of engineers around the country to examine its vehicles and compare its products to others with similar mileage. And finally, it was revealed that the woman who owned the Sienna minivan that started that parade hadn’t changed the oil in her vehicle for at least 20,000 miles. Oops.

Twice I’ve gotten emails from individuals with failed continuously variable transmissions and, when I researched their story, found they’d had them serviced outside their dealership; the “mechanic” had put automatic transmission fluid into their CVT, not the proper fluid, which destroyed them. When I bring that up to others who complain about a CVT, I’m immediately informed that an unknown person on the Internet, with an unverified complaint and unverified story, is apparently far more credible than I am.

I keep forgetting that facts no longer matter.

They Can’t Tote that Note

Now, many people have a legitimate complaint about something breaking that shouldn’t have. I just threw away a 10-year-old Pioneer Elite Kuro widescreen TV because they no longer make the $80 chip that blew out — and they don’t make that TV anymore. Therefore, I do have sympathy with this, but I have a bit more realism, too. Things break, and when they do it is never convenient; and, sadly, the high cost of repairs hits many Americans with brutal force.

I suspect that the repair cost is primarily why the number of calls and emails about things breaking on much older cars or high-mileage units,in which the owner is almost demanding that the repair should be covered by the manufacturer, is growing. Years ago, before the advent of modern subprime financing, people with poor credit scores or little in the way of funds used “Tote the Note” lots. When one of those older vehicles broke down, the owner of that kind of used car operation would often fix the vehicle and add the cost of the repair to the buyer’s weekly car payments. But those operations aren’t as numerous today, and that may be part of the reason complaints are rising.

Just so you’ll know, the Dallas attorney with the high-end luxury car agreed with both my positions — he should have been loyal to one dealer, and he would have been well served by buying that extended warranty. As he pointed out, he’d never had a problem like that before, so he had declined the policy. As I pointed out, I haven’t been in an automobile accident in 20 years, yet I still carry insurance.

Still, for those living paycheck to paycheck, or close, major auto repairs can mean disaster. When they’re driving overpriced, high-mileage used cars and hampered by higher-than-normal loan interest rates, unable to afford a high-quality extended warranty, things going wrong on the vehicle can cascade into everything going wrong in their life.

Sadly, that’s not an automotive problem, It is a socioeconomic one.

Ed Wallace is a recipient of the Gerald R. Loeb Award for business journalism, bestowed by the Anderson School of Business at UCLA, and hosts the top-rated talk show, Wheels, 8:00 to 1:00 Saturdays on 570 KLIF AM. Email: edwallace570@gmail.com

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