On Universal Healthcare

The General Healthcare and Pensions company, of which I am part-owner, makes some cars during its lunch breaks. Perhaps as part of Mr. Obama's push for universal health care, GHP is going to be offering its products for free for sixty days.

If you're an American taxpayer and you feel obligated to buy a GHP product, now is your chance to try one risk-free for sixty days! This way, you can get a feel for how lovely the current lineup is, and if you don't like it, you can bring it back for a refund. Support the country AND get a new car! What a great idea!

Or is it?

Sixty days is more than enough time for buyer's remorse. It's also enough time for the buyer to realize there are better options available, and certainly enough time for something to go wrong with the car.

In a recent episode of Top Gear, James May said of the Chevrolet Aveo, "the only reason you would buy this is because you haven't tried any others."

However, aesthetics and quality aside, there is a bigger issue that needs to be addressed. While this may seem like a free two-month car rental, it's a bit more complicated.

First, let's take a look at some of the restrictions that apply. The full purchase price plus sales tax will be refunded, but "the buyback price does not include any other taxes, licensing, titling or registration fees, insurance, accessories, dealer fees, extended warranties, finance charges, negative equity or any other expenses incurred by the customer at the time of taking delivery of the new vehicle." Fair enough, if they were to refund everything, then, well, everyone would be in line to rent a vehicle.

Presumably, the 4,000-mile limit is not important either. Simply return the car before it hits the mark.

However, the tricky bit follows. You obviously can't return a car if it has been in an accident. Nor is the customer responsible for "normal wear and tear." BUT, the vehicle becomes automatically ineligible if it has $200 or more worth of damage. A dealer's assessment of what constitutes $200 of damage would be something like a paint chip on the bumper from a small stone that hit the car while driving on the highway. Shopping cart hit you in the parking lot? You're out, regardless of how much you hate the car. I wonder if a flat tire constitutes "normal wear and tear." It would be tragic if any of this were to happen after the buyer decides to return the car for a refund.

What if the car acts typically GM-ish and the power seats stop working? Or the transmission decides to pack up? Certainly, such issues would be covered under warranty. But would that be $200+ in damages? That is to say, if you buy a lemon, can you return it? Or is this a clever plan to get rid of all the lemons?

Let us suppose that, for some extraordinary reason, you end up liking the Chevrolet Malibu that you've bought to try. Do you keep your car? Well, chances are, there will be quite a few people that didn't like the car, and returned them. It therefore follows that you should return yours too. Now, I'm not saying you shouldn't like it if no one else did, it's a simple matter of economics. The used car market is now saturated with the very car that you bought at the new price, only with about the same miles you've already put on it (i.e. no more than 4,000) and guaranteed to have less than $200 in damages.

I have a feeling the plan will either a) backfire badly or b) generate very little additional business because no one wants to take the risk of having to pay for registration and other fees. In fact, most of these promotion gimmicks fail to look at the long-term and they just result in bigger slumps when the promotion period ends. Either way, a waste of advertising costs.

Dear Mr. Obama, please use my tax dollars wisely.