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Chrysler Guarantee Takes a Hit

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On: Sat, May 30, 2015 at 12:46PM | By: Gary P Garry


Chrysler Guarantee Takes a Hit

The Chrysler Corporation has had its ups and downs over the years. This venerable member of the American Big Three was founded all the way back in 1925 by Walter Chrysler. The company was originally formed out of a reorganization of the Maxwell Motor Company.

Chrysler was responsible for some huge innovations during the earlier years. Today, the automotive sound systems that we have are off the chain, but there was a time when you couldn't get very good music in cars. In 1955, Chrysler teamed up with Philco, and they developed the very first all transistor radio for automotive use. The company was also the first auto manufacturer to offer electronic fuel injection.

Things started to go bad for Chrysler during the 1970s. They attempted to expand, both domestically and internationally, but the timing was not right. The 1970s were economically turbulent. There were multiple recessions, and there was an oil shortage that changed the automotive landscape forever.

The company was teetering on the brink by the end of the decade, and they went to the government looking for a bailout in 1979. They got a $1.5 billion loan, and Lee Iacocca ultimately righted the ship.

If we fast-forward to 2009, we see deja vu all over again as Yogi Berra would say. Chrysler filed for bankruptcy, and the government once again stepped in with $8 billion of cash in hand.

Chrysler has tried to repair its image, and this certainly is not the first time. Part of the effort was a solid “we stand behind our product” stance. This can build consumer confidence, and it is something to hang your hat on.

To prove their level of confidence in their products, they have been offering a five-year, 100,000 mile powertrain guarantee on their automobiles. Without question, when you know that the powertrain is guaranteed for six-figure mileage, you can buy with a certain peace of mind. You may be paying for the car for five years, so you want to be certain that the vehicle will last that long.

Now, it appears as though Chrysler's confidence is not what it used to be. The company has announced that they will be reducing the guaranteed mileage. Starting in 2016, the five-year figure will still be in place, but they will be offering a 60,000 mile powertrain guarantee.

This is consistent with most other auto manufacturers, including the other two members of the American Big Three. However, it is a step backward, and it makes you wonder about the quality of these cars.

For the record, the best warranties are offered by Mitsubishi, Kia, and Hyundai. If you're a first-time buyer, they guarantee their new car powertrains for 10 years or 100,000 miles.




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