General Motors Company (NYSE:GM) is dealing with a massive recall right now due to an ignition switch defect that affects over 1 million vehicles. GM said that it is not going to buy back the cars from angry customers, but will offer a $500 rebate towards one of the new, non-recalled models.
These details were posted on a memo on the NHTSA website today. General Motors is facing a criminal investigation from the U.S. Attorney’s Office for the defect that linked to 13 deaths, involving the Chevy Cobalt, Saturn Ion and several other vehicles that were built between 2003 and 2007.
Here is what the GM memo says:
“Please explain that we understand their concerns. General Motors is not offering repurchase as a remedy. To assist dealers in helping customers who are involved in this recall that request assistance, we are announcing a special cash allowance in the amount $500 available when these customers purchase or lease a new 2013/ 2014 / 2015 model year Chevrolet, Buick, GMC or Cadillac. This special cash allowance must be passed on to the eligible customer at the time of the transaction and is in addition to other national and regional offers. The special cash allowance is not transferable and is intended to assist those customers who are unhappy and may want to trade out of their vehicle or buy a new GM product. Advise customers that at this time, the special cash allowance is effective through April 30. GM will not market or solicit owners using this allowance. We ask that Dealers do not market to or solicit these customers either. This special cash allowance is not a sales tool; it is to be used to help customers in need of assistance. The allowance is effective today.”
GM issued the memo to dealers on March 5th and the deal is good until April 30th. GM bought back at least 13 Cobalts in 2005 and 2006 due to complaints from owners, according to Detroit News.