Cadillac Escalade-V Owner Gets Warranty Voided After Refinancing Vehicle49
The 2023 Cadillac Escalade-V introduces a new supercharged heartbeat for the iconic luxury nameplate, blessing the full-size SUV with sports-car levels of performance. Naturally, the price of entry is rather steep – in fact, the Cadillac Escalade-V is the most expensive Cadillac currently available. As such, one might expect an exceptional service and ownership experience. Unfortunately, that wasn’t the case for one Cadillac Escalade-V owner who had their warranty voided after refinancing. Here’s the full story.
GM Authority was recently in contact with a customer who purchased a new 2023 Cadillac Escalade-V in September 2022, financing it through GM Financial. A few months later, in January 2023, the customer refinanced the vehicle at a lower interest rate with another institution. No transfer of title took place.
Sometime thereafter, the customer began to have issues with the vehicle, headlined by a “Service 4WD” message on the instrument panel and a related loss of power. After bringing their Cadillac Escalade-V into the dealer to address the issue(s), the customer was informed that some of the vehicle’s components required reprogramming. However, upon taking in the vehicle, the dealer advised the customer that the vehicle had a warranty block on it.
Before going any further, it bears mentioning that the Cadillac Escalade-V is one of several high-demand vehicles that currently carry a time-specific ownership requirement in order to retain the warranty. Like the 2023 Chevy Corvette Z06 and GMC Hummer EV, Cadillac Escalade-V owners must own their vehicle for at least six months before selling it in order to retain the warranty.
GM put this stipulation in place in order to prevent bad actors from quickly reselling the vehicle for a large profit, a practice known as “flipping” the vehicle. However, in the case of the GM Authority reader in this story, no ownership transfer took place, since the model was solely refinanced.
The dealer that took in the reader’s Cadillac Escalade-V has since reached out to GM/Cadillac for guidance. As of this writing, a week has passed without a resolution from either GM or the dealer. The customer tells us they have been chasing the dealer who, in turn, has been chasing GM, but the end result is so far the same. According to the dealer, GM’s system says this particular vehicle’s warranty is blocked due to non-retention.
The situation has to be frustrating, especially considering the $150,000 price tag for the new Cadillac Escalade-V. We’ll post updates to the story as we get them, but in the meantime, subscribe to GM Authority for more Cadillac Escalade news, Cadillac news, GM Financial news, and around-the-clock GM news coverage.
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Shelling out big money for inflated vehicle prices and GM pulls this trick that in reality does nothing to stop flippers.
Fortunately the recession and soaring inflation is putting an end to these insane flippers.
Absolutely shocking! I’ll bet you that if this had happened in China, both GM and Cadillac would be kissing butt instead of insulting a customer this way. GM’s values suck!
What a cheap action by GM ! Have the bean counters fired!
Have the bean counters fired starting with Mary Barra.
Title ownership did change, the owner from the new institution who’s has the lien is now primary on the title. Long story short read the fine print
What are you talking about? When you get a car loan, the owner is always you. The bank is the lienholder. That goes in a separate spot on the title.
If the bank was the owner, they’d be paying the registration and property taxes on it, but they don’t.
What I do believe is if the owner moved or the DMV put their name in slightly differently on the new title and GM’s IT systems were too stupid to figure it out.
Sam, those are good points all around. If the problem is with GM’s IT systems, GM’s human sales and service field teams should have figured this out within 24 hours… but seems like the customer has now waited for a week with no answer, which is unacceptable for any situation with a car, especially one that costs as much as it does.
My CT5-V BW arrives next week. Hoping this doesn’t happen to me when I refinance though my own institution.
better wait six months keep mile low
No, that’s not how it works. The lender is the lienholder on the vehicle and retains the title until you pay it off. They are actually the legal owner of the car until it is paid for, and they release the title to you. That is how they have the ability to repossess vehicles for lack of payment, etc. It is their property until you pay them in full. The lienholder’s name is actually on the title.
Jason is correct in his comment. GM Financial was the first lienholder and held title to the vehicle. When the owner refinanced, the title was transferred to the new financial institution. When you refinance a vehicle, a brand new title is issued with the new financial institution’s name on it.
The Escalade-V driver needs to call GM and explain to them the issue and show proof that he is still in possession of the vehicle. Should be a simple problem for a competent Cadillac dealer to solve. Driver rolls up in the Caddy, shows the dealer the cancelled/settled GM Financial contract and the new lending agreement which should both have the VIN on them. Dealer looks at them, confirms the VIN and registration information of the physical vehicle sitting in front of him/her, and calls GM to remove the block on the warranty. GM created this problem with their stupid 6-month rule and need to have a simple process to resolve it. People buying vehicles refinance all the time, it isn’t a new concept.
No, you’re wrong. A lienholder is not an owner. Learn what a lien is: a security interest in the vehicle/house/boat. A lienholder does not have the right to use the car, they do not have the right to sell the car, nor do they have the responsibility to keep the car safe, like an owner does.
The only right a lienholder has is to cause the car to be auctioned (or sold, depending on the state) if the loan is in default and to take what they are owed out of those proceedings. The rights of a lienholder can be extinguished by paying the amount of the lien.
Again, when you finance a car, you are the legal owner, the bank is not. It’s amazing how many adults lack basic financial and legal knowledge.
States like Montana the owner holds the title which is NOT the financing company. Just like your home, you own it, the bank just has a mortgage. Only if you violate the terms of the mortgage can they then go through the steps to own it themselves.
Kinda like doing a balance transfer on a credit card … the debt is still mine, just have to send payments to someone else, but I’m still the “owner” of the debt.
We need to see what the agreement says…I’ve seen the letter GM sent to dealers, but not the actual language used in whatever contract is signed.
If GM systems are flagging VINs based solely on title issuance, people getting a replacement title printed might have similar issues.
This reminds me of a recent issue I had with carfax…they recorded a second owner when we paid off the car and the title was issued to me…it was a pain in the ass, but once I provided proof of one-owner registration, they changed it to (correctly) reflect one-owner. Documentation of continuous registration in the original owner’s name might resolve this…
I’d like to pay $150,000.00 for a new vehicle, and then have to start bringing it back to the dealership almost immediately after purchase because of poor quality components, workmanship, or combination thereof.
You can just buy a porsche
I like to know how much this person is saving post refinancing to go thru all this trouble after he bought the vehicle in September. Seems to me that GM’s financing does not sound great.
A lot of times you get additional discounts on the price of the vehicle if you finance with their specific institution.
This guy might have saved a few grand on the price of the vehicle signing a higher interest loan with GM. Then they go and refinance with a lower interest rate somewhere else. Now they have the best of both worlds, initial discount and lower interest rate/Payments.
Good points. Though I can’t imagine there are any discounts on an Escalade V. And we regularly see articles here emphasizing no discounts on regular Escalades.
The dealer may have required the buyer to finance through the dealership or pay a markup. Buyer didn’t want to pay markup and thought he was smart by doing the deal and then refinancing. Turns out he wasn’t so smart. The title was reissued with a new lien holder.
In this case it seems the buyer is just as greedy as the dealer and he got his due reward. Now he can finance the repairs since he voided his warranty.
Dallas GMC, It’s called the price of doing business.
Its not. Thier rates are high. My score was a 784 when I purchased my 2021 Colorado ZR2 in February of 2021. I financed 48k through gm financial and expected a rate between 3-5 percent. It ended up being 7.2. Long story short….. Even with exceptional credit and money down thier percentages are way more than some other institutions. I refinanced after a year at at a local institution and was able to get a 3.5 percent intrest loan.
Dealer ripped you. They get more if a kickback the worse the loan they talk you into. They are under no obligation to give you the best rate
I agree with the other guy, you got ripped or there’s an issue with your credit. $65k GMF loan for a Silverado from March 2021, 800 credit, 0.9% APR. Backing out the subventing (the cash rebate), it’s 2.0%. Bank of America was offering me 2.1% at that time.
This says a lot for Gm new car with issues some things never change only the costs get more ridiculous
The fact that he switched his loan from GM Financial to go with a lower APR and GM is going to pull this kind of stunt knowing good and full well that it did NOT change hands! This is unacceptable and the reason I no longer have any loyalty towards GM. This is a clear example of how you will be treated after spending $150.000.00+ with GM. I would throw $40.000 on top of that amount and go with the Porsche Cayenne Turbo GT and where you will be treated as a valuable customer.
ALL of these vehicle manufacturer’s have been living LARGE the past 2 1/2 years off of the stupidity of the consumer. I shake my head every day watching people buy depreciated things like vehicles that cost more than homes. When this recession hits full swing the first person begging for help will be the “fools” who have been spending recklessly, the second will be the vehicle manufacturers! They will complain…”poor us” and ask again for another 2008 bailout. Hopefully, they won’t get one. Let them suffer with these bloated vehicle prices.
The real -Robles is lack of Customer Service from Cadillac/GM. I can understand this problem of Implied change of ownership” when refi occurred, but the disturbing part is GM not resolving this the same day.
Should say – The real problem is……(my problem is not reviewing what auto spell puts on )
That just shouldn’t be that hard to resolve. Poorly set up system and way to long for a response from GM.
Sound like “Government Motors”…
After 50 yrs of loyal GM new cars only, some with less than 4K miles & tranny problems that were never fixed correctly. Never thought I would be a Chrysler/ Ram fan. But, I have a 18 300 S Hemi & a 22 Ram Longhorn with no complaints whatsoever. Sorry GM, you think more of China than America.
150,000 dollar vehicle and no warranty is ridiculous take it back and tell them to stick it
Really? Who doesn’t have an occasional reprogram these days. Too much tech.
I think this is just a way for GM to weasel out of covering the cost of repairs so early into vehicle ownership by the customer. Clearly, the same individual owns the car, just got a better deal on financing. I’m pretty sure if this went to court, they’d verify that ownership didn’t change, and GM is on the hook for repairs. Unless there is specific wording in the paperwork that he could not refinance the vehicle, I’d say this guy has a pretty good argument against GM, and they are responsible for providing warranty coverage. If not, I say quit making payments if you’re not the owner, let GM have the POS back and go buy something else. There are PLENTY of aftermarket superchargers out there that are better than what GM provides anyway.
I saw a comment about Tesla’s being faulty, but what he doesn’t understand, the problem this person had would have been taken care of. Programing by Tesla is over the air and is done for all vehicles under warranty or not.
How is it, that after refinancing, some of the vehicle’s components suddenly require reprogramming?
Reprogramming wasn’t required due to refinancing, it was required due to the errors the customer received via the check engine light and “service 4WD” message on his dash display.
Unless GM somehow forced an errant message after the vehicle was refinanced and it was reported to them via GM Financial, forcing the owner to take it in for service… makes you wonder.
Great job Mary. Way to keep your customers happy.
Ok, maybe this is off topic…but, financing and then re-financing a $150-$200k vehicle purchase only says one thing to me. You can’t afford it!
IF ITS UP TO ME I WILL MAKE A HUGE YOUTUBE VIDEO ABOUT YOUR SITUATION AND SIT AND WAIT
GO ON TIKTOK LET EVERYONE KNOW
I’ve done the finance switcheroo on multiple occasions. I’ve always had great credit of 780-800, but GM usually offers a discount of a couple Thousand, sometimes up to $4K, if you finance through them (they get the profit and your interest, genius huh!). However, their interest rate is usually about 2-3 points higher than local rates (thus why they give you the carrot to finance through them). I then refinance after a few months. Last truck I bought (pre-Covid) was 2,000 rebate but loan was 6%. My bank was at 4% for 72 mo.
My dealer asked me to wait a few months. He said GM does contact the dealership sometimes if the Refi is done immediately. So that’s what I’ve done.
This financing is different than the special offers of very low or zero financing try offer on volume models, those cases you can take a cash rebate or the financing.
This guy has a terrible story, but I’m sure they will get it worked out.
It’s the dealers that should be penalized for the stupid prices they have been selling used vehicles at. I’ve seen year old Denalis with 30K on the clock and the dealer was asking more than the MSRP was when new! That’s disgusting. Gotta wait this out. Have had to break my regular 3 year trade cycle because of dealer markups.