When a company wrongs a customer, they typically have two alternatives:
Attempt to make the customer happy. It may take a small investment to do so, but in the end, companies that take care of their customers typically achieve greater success.
Ignore the customer’s complaint, and deal with the consequences.
This is the story of a company that chose the second option.
Why I Bought a Hyundai
After graduating from college over a dozen years ago, one of the first things that I wanted to do was to purchase a car. At the time, my car had nearly 200,000 miles and a myriad of issues, I needed something reliable to get me to and from work. I test drove a number of different vehicles, but my finances really limited my options. With my down payment and anticipated car payment, I limited my options to purchasing a used model from Toyota or Honda, or instead opting for a brand new model from one of the discount brands.
There was something appealing about owning a brand new car, and having a blank canvas of sorts to take pride in, and take care of. Of the discount brands, Hyundai caught my eye and quickly became the favorite. Their new line of cars had slick styling, were well reviewed, and were very affordable. More importantly, all of their marketing materials boasted of how all of their cars came with “America’s Best Warranty” , which covered the engine for 10-years and 100,000 miles, and the rest of the vehicle for 5-years and 60,000 miles. This warranty was a huge selling point for me, and I ended up selecting a brand new Hyundai as my first vehicle out of college.
Trouble Will Find Me
Over the course of the next few years, my Hyundai performed fairly well. It got decent gas mileage, and handled the needs of a 21 year-old young professional fairly well. I did my part by getting regular oil changes and following the recommended maintenance plan. The car didn’t have any issues at all for the first 60,000 miles, and fortunately I didn’t need to put (the supposed) America’s Best Warranty to the test. That all changed shortly after the odometer passed mile 61,000.
One day after visiting a friend, I was driving on the highway when the car started to rapidly decelerate. I quickly pulled off to the side of the road, and smoke began to billow out from underneath the hood. The issue seemed to come out of nowhere, as the car had given no indications of trouble. There had been no service engine lights, no leaks in the driveway, and I had actually had my fluids checked just a few weeks before. Regardless, the car wasn’t driveable, and I had it towed to the nearest dealership.
Later that day, the Hyundai service department called me with the skinny. The temperature gauge that determines when anti-freeze needs to be injected into the engine had malfunctioned and stopped injecting coolant. Without any way to cool itself, the engine block had massively overheated, and was a total loss. When I asked about why there hadn’t been a service engine light, and they told me that the monitors also had apparently failed, and didn’t detect the issue. At this point, I was grateful that I had bought a Hyundai. If I had gone with a different brand without such a great warranty, I would be in trouble. I mentioned this to the service manager, and asked how long it would take them to fix the engine. He told me that he would get back with me later that day with an answer.
The call that I received that evening knocked my socks off. It wasn’t from the Hyundai dealership’s service department, but instead was a regional Hyundai corporate representative. He said that while the 100,000 mile warranty did cover the engine and all its components, the coolant temperature gauge was not considered part of this assembly. Since my vehicle’s engine issues were caused by a failure in this gauge, none of the repairs would be covered by the warranty.
I was floored. I explained that the whole reason that I bought a Hyundai in the first place was because of this warranty, and that if the entire basis of their American marketing campaign revolved around this warranty, it wasn’t ethical for them not to honor their promises. The injection of fluid was a critical part of the operation of the power-train, and didn’t make any sense for them to push that part outside of the warranty coverage. Even still, I told them that I could understand if they didn’t want to cover the cost of replacing the temperature gauge, but that the engine itself should absolutely be covered. He disregarded my comments and told me that a replacement engine could be ordered for several thousands dollars (not including the cost of installation) if I would like, but it wouldn’t be covered under the warranty.
Trying to Fight Back
I was furious. I spent the next several weeks calling the service departments at the local dealerships and trying to work my way up the corporate chain to get some resolution. I diligently collected copies of my maintenance records and presented them to anyone and everyone. I wrote letters and even got several Hyundai employees to admit that there was nothing that I could have done to prevent this issue, and that it was dumb luck.
The response that I got from Hyundai corporate was consistent. They had no intention of honoring their warranty, and were more than willing to disregard the little guy and lose a customer for life, if it saved them a few thousand dollars in the short-term. I went so far as to take my case to a local attorney, who agreed that I had a decent case, but it could take years to fight this in the court system. I had to find a way to get to work and needed something that I could drive right away.
I had taken out a five year loan upon purchasing the vehicle, and now found myself still owing two years worth of payments for a car that I couldn’t use. After a few weeks, a friend of ours ended up finding a replacement engine at a local junkyard, and fixed the car for half of what the dealership would have charged. I had to borrow the money from friends and family to pay for the repairs, but was able to drive the car for a few more years until the Hyundai was paid off (I traded it in immediately after).
America’s Worst Warranty
I suppose that trying to get out of paying for repairs is part of the business model for Hyundai, as this is actually fairly typical behavior from warranty companies. What puzzles me is that Hyundai still to this day is featuring their warranty as the major selling point of their vehicles. In the time since this all went down, I have told this story to hundreds of people. There were a few friends who were actually considering purchasing a Hyundai, who decided against it upon hearing how the company handled my situation. By sharing this story with the readers of See Debt Run, the truth about “America’s Worst Warranty” is being shared with even more people.
If there is a lesson to be learned from all of this, it is for the business owners of the world. If you make promises to your customers, you have to be willing to back those promises up. When you create unhappy customers, you must realize that they will share their story with the rest of the world, and that the impact to your long-term sales and goodwill can extend far beyond the initial situation.
When my car broke down, I wasn’t trying to take advantage of the company. I was just trying get the warranty coverage that I was promised when I made the purchase. I was a loyal customer who choose their company above everyone else in a very competitive market. The way that they choose to respond to this loyalty, surprises me even to this day. But rest assured, I will never stop sharing this story to anyone who will listen.