To refund or not to refund?

Let’s play a role for a while. Pretend you are a car buyer and you’ve saved enough money to buy a vehicle you’ve been itching to have in your garage for years. You finally are able to get such a vehicle, but after several months it starts to have different problems until it gets stuck for weeks at the dealer who sold it to you to undergo a major repair.

What do you do?

You may be thinking of what David Huang has thought: Ask the dealer for a refund or a complete replacement.

"The unit I bought was really a lemon," said Huang in describing the P1.16-million Opel Vectra station wagon he bought from GM Autoworld in December last year.

Huang, a finance expert, says his Vectra has had too many troubles since he bought it. In the first month, its wiper blades broke. On the second month, its suspension had to be replaced. On the third month, it got new engine sensors. And soon thereafter it showed signs of overheating, had busted fuses, and its engine emitted an abnormal noise when cold.

What made Huang declare the Vectra a lemon, however, was this: On the sixth month of the vehicle, its automatic transmission got stuck up and would not go on reverse. The solution? GM Autoworld said it needed a new transmission.

Huang wrote GM Autoworld president Harold Koh on July 16 asking that the vehicle be replaced completely. But Mike Nacua, GM Autoworld’s manager for after-sales service, replied that it was against the company’s policy to replace any car. He offered a one-year extension on warranty instead.

Donabele Syquia, GM’s public relations chief, declared Huang’s case an isolated one. "We have sold about 300 units of the Vectra since 1998 and this is only the first time that we encountered these problems with the car," she said. "It was an isolated case and I want to assure GM buyers that we are doing everything to ensure the quality of our products."

Huang’s wife Emmeline said they bought the Vectra because of her fondness for GM vehicles. Her father, David Sycip, used to head Northern Motors, which used to distribute GM cars and trucks in the country. And she owns an Opel Manta and an Opel Rekord up to this day.

"I am very much aware of GM’s concern for excellence, having grown up with a family directly involved with GM from way back," she told Nacua in an e-mail. "In fact I was a great promoter of GM vehicles even as a child. You will perhaps better appreciate why this matter is very disappointing and frustrating on our part, and probably on your part too."

Syquia said they’ve thought about replacing Huang’s Vectra seriously, but decided against it since the car already had logged 15,000 kilometers. "And it’s really against company policy," she said. "The most we can do is extend the warranty."

A different case

Now let’s take another case. This time, involving a sport-utility vehicle brought to the manufacturer’s plant for repairs.

The SUV is an Isuzu Trooper 4x4, bought by another businessman David dela Cruz of Palanan, Makati. A 4x4 enthusiast, Dela Cruz bought his Trooper for about P1.6 million in February last year. In October, he said he noticed that the vehicle, which had an automatic transmission, wouldn’t go on overdrive. He brought it to the dealer who, in turn, sent it to Isuzu Philippines Corp. (IPC) plant in Biñan, Laguna. The plant’s engineers had a hard time finding out the problem, so it took them about three months to repair the vehicle.

Dela Cruz alleged, though, that while his Trooper was supposed to be undergoing repairs in Biñan, he saw it in Sto. Tomas, Batangas "being driven at breakneck speed." He said he called IPC’s attention and warned the company against using his vehicle again. It was the dealer - Isuzu Manila - which apologized to him and assured that the incident wouldn’t be repeated.

Two months after he got back the vehicle, Dela Cruz noticed that the overdrive problem had recurred. He sent it back to IPC and got an assurance that it would be fixed in a week, which, to his disappointment, turned into a month and a half.

"Worse, in spite of my earlier warnings, I saw my Trooper in Sto. Tomas, Batangas again on two separate occasions being driven at top speed, weaving in and out of traffic," he said. "I asked one of my corporate officers to chase the vehicle, which he did, and when he caught up with it in Isuzu Batangas, the occupants admitted they were using my Trooper to make service calls to Batangas and Laguna dealerships."

Myrna Gonzales, manager of IPC’s general services and customer relations section, vehemently denied Dela Cruz’s charges that his Trooper was used by IPC people in making service calls.

"Our records show that the Trooper was brought to Batangas for testing," she said. "Our engineers would not use a customer’s vehicle for service calls because they have their own personal vehicles. The company pays them P7 for every kilometer of official use. So why would they use someone else’s vehicle when they can earn so much if they use their own?"

Gonzales said Dela Cruz’s Trooper experienced problems with its overdrive gears because of the modification he did on the vehicle. Dela Cruz himself admitted that he had replaced the original 21-inch tires with 23-inch ones. But he said he was allowed by the dealer to do so.

Gonzales had a different view, however. She said owners are only allowed to do "one-step" modifications on their vehicles. "When you change the size of the rim, that’s one step. But when you change the thickness of the tires, that’s another step," she explained. "Technically if you do that on your vehicle, you are voiding the warranty agreement."

The IPC official noted that as their way of accommodation, they offered to refund Dela Cruz P1.3 million, which, to IPC’s calculation, is the Trooper’s depreciated value. "We didn’t count the time the vehicle was in the plant being repaired. That’s only from February to October 2000 when Mr. Dela Cruz used his vehicle without any problem," she pointed out.

Now you be the judge. How would you decide both cases?

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Editor’s note: For comments or reactions to this article, e-mail the author at [email protected].