OnStar rates go up, Bruce cancels

[Bruce Nunnally]

I notice OnStar raised the month-to-month billing for the base Safe and Sound plan to over $20/month in October. I canceled my service.

I love the hands-free phone, which only works via OnStar, but would prefer a Bluetooth interface that used my cell phone. Outgoing calls

worked well, but incoming calls came to my cell and not to the car. With a bluetooth solution my pocket cell number and address book

could be used with the CTS mic, speakers, etc.

I also enjoyed the monthly vehicle diagnostic emails from OnStar. For the last 4 years I have had active OnStar support however, the only time

I actually talked to anyone over OnStar was to order more minutes for the car phone. I tend not to lock my keys in the car, or lose it

in parking lots and need someone to honk the horn.

Overall I would prefer to see OnStar go to a per-use type model rather than the monthly or yearly subscription model. For a passive

service that is seldom employed, $20/month seems expensive to me. Yes, you can lower the cost somewhat by subscribing for a

year or more at a time and lower the effective monthly bill. For what you get day to day this still seems expensive. In my case, I'd

rather put that in to my car budget for the next CTS.

[Cadillac Jim]

I've been watching OnStar since it began in 1996 as an innovative Cadillac-only experimental service. Ford and Mercedes started up copycat services but both folded them up quickly when the no-gain business model became clear, and the cost of supporting these services became known. OnStar has never been a moneymaker, but was considered a GM brand discriminator. The business model was modified by treating OnStar as an incentive to buy GM cars, and availability spread quickly to other brands.

Focus, services, and integration of OnStar varied. My 1997 Generation 1 ("Gen I") system integrated with the stereo and phone for hands-free calling but was not a module on the network, even though it provided a data port for the GPS by 300 baud modem signals and was actuated by the airbag system. Also, the OnStar system provided some services similar to the RFA through horn-honking, door-unlocking, and some of the theft prevention enhancements. I once ran into a GM engineer who was working integration of systems in new GM products and I suggested that they integrate the GPS clock into the dashboard clock so that it never had to be set, and some other things, but I think that he heard all sorts of naive things all the time and quickly forgot all outside suggestion. Later integration was extended to OBD II code readout.

Other services that were considered or supported for only a short time were traffic alerts, traffic advisories on call-in, medical services support through a database of medications and providers that the customer provides, etc. The concierge service of early OnStar was separated as an extra-cost separate service through OnStar and then discontinued. I once had a horrible experience with the concierge service in making arrangements for a trip for a funeral in 2004; they screwed up my reservations, lost my fare lock-in, and apparently had no initiative to call me when an email bounced. I chewed them out, and they apparently flagged us as terrorists to the TSA, judging by the reception we got at the airport. "One moment sir..." from the ticket agent, then, from someone tentatively approaching from a distance from far stage left, with corn-fed glowering security agents appearing at all points on the perimeter at a distance, "Are you traveling alone without luggage?" "Do you have a return ticket?" I pointed out my disabled wife in the ticket line with four large suitcases and showed them our two two-way tickets and most of the BS disappeared, except for the detailed body and parcel searches. On renewal, I didn't opt for the concierge service, saying "I didn't have good luck with it the last time we used it."

For many years after the extension of OnStar availability into other GM brands, OnStar offered installation of new systems as retrofits in select OnStar-ready used cars. Last year, a major policy shift happened when the FCC decision to drop requirements on cell phone carriers to support protocols older than GSM: OnStar resolved the issue of supporting analog phones by stopping retrofit of older vehicles altogether, essentially forcing these systems offline as of February 15, 2008. The FAA deadline is later than the OnStar cutoff of services for analog phones on December 31, 2007, and some analog phone service will be available for several months or longer after the February 15 date, until all the carriers remove or power down all the analog equipment from all the cells.

My base assumptions are that OnStar does not make money as an isolated cost center, and Service does not make money as an isolated cost center -- either for dealers or for GM. Given that these services exist in the business model for the purpose of supporting new car sales. I have a behavior model for decisions by OnStar. It's just my opinion, but I believe that OnStar does not make money by itself, and to pay its way with GM it must provide advantages in the overall business model, and an incentive to buy GM cars and trucks is what they are looking at. Note that the first year or even two of service comes free. Once you enter the third year, you are a candidate for trade, and GM as a corporation will make money from you only if you buy another new car.

My observation, based on a "behavior model" viewpoint is that if an OnStar feature will help sell new cars, they will do it. If it doesn't sell new cars they may or may not do it if it doesn't cost them much money. In the meantime, they must charge enough to support their operations, which, if you think about it, are fabulous.

I cut off my car phone a couple of months ago and am using Bluetooth through my Garmin 360 and a GSM cell phone for my car phone. I moved my old car phone number to my new GSM phone. I'll have a post on my blog when I have a permanent mount and pictures.

[556393]

For the first time I own a Cadillac that is still under warranty and my `06 XLR rides on run flat tires. For a year I think I paid $199.00 for Onstar service, thats cheap considering I travel back roads and two lane state highways when I do road trips. One flat or some other problem and I can get help out in the middle of bumf333 nowhere. I don`t have a need for a personal cell phone so, the Onstar phone works for me. I like the service besides, the ladies have nice southern accents.

[OynxSTS]

Overall I would prefer to see OnStar go to a per-use type model rather than the monthly or yearly subscription model. For a passive service that is seldom employed, $20/month seems expensive to me.

Amen! Onstar has been mismanaged from day one... GM had a diamond in the rough and they blew it...

Onstar should have been a per second/minute service from day one... Every other cell company in the world sells its service this way and most of them are extremely profitable.

GM couldn't figure out who the competition was... they thought they were competing with AAA... well they were a little... But mostly they were selling cell service and they were competing with cell carriers, resellers and providers...

In this space they are by far the most expensive provider.

Why would I pay Onstar $20-$50 a month when my cell costs me $6 plus 6¢ a minute... When my onstar was active I was paying a huge $10 a minute!

If GM made this a pay as you go service, plus a minimal activation fee, they would make a killing.... and I would probably reactivate mine... Until that day happens... I'll use my cell and just call my wife for directions.

[bowtie123]

I did not subscribe to On Star when I brought my used 2005.

I thought $17.95 a month was too much for the services offered.

Now its $18.95 a month and another $18.00 a month if you wanted

the Directions service.

I would use the phone service if they offered it just for the cost of the minutes.

I've never figured out there reasoning for the prices.

Would it be better to have 100,000 subscribers at $18.95 a month

or 3,000,000 subscribers at $6.95 a month.

The cost for each additional subscriber has to be minimal.

[thu]

I also don't think OnStar is worth it. However, it would be nice, as Bruce says, to have our normal mobile phones hook up to the car to use the built-in mic and speakers. Oh well.

[Cadillac Jim]

As an orphaned customer of 10 years, sour grapes and all, I feel that OnStar is definitely worth the cost. Here's what you get:

• Hands-free car phone (if you opt for this service). Just OnStar connectivity if you don't want the phone.
• Directions to an address, or a specific service such as a theater or fuel outlet.
• Immediate (nearly all of the time) contact with someone with a pulse and a brain, and and an intelligent trained, courteous one at that.
• For the asking, connection with Cadillac Customer Service, and knowledgeable, aggressively problem-solving people willing to pursue things like cryptic message like "Security system error, car may not restart" by contacting your dealer and making an appointment, then following up with both the dealer and you.
• If your air bag deploys, they come online and deal with it, from calling police and ambulance to dealer tow-away and repair, with follow-up.
• If the theft protection is activated, it will de-activate the phone, call OnStar who will then contact you, and with your permission relay GPS position data to the local police jurisdiction while your car is being located for arrest of the perps and return to you. This service resulted in major upgrades and cost increases in LoJack, who still can't match it because LoJack doesn't have a GPS and their coverage doesn't even remotely match that of cell phone coverage.
• If you can't find your car, they will tell you within 50 feet of where it is, and if that isn't enough, they will beep the horn and flash the headlights to get you that last quarter mile to your car.
• If you lock your keys in the trunk, no problem. Keys locked in the car? No problem.

I've gone to a Garmin 360 with Bluetooth to replace most of the services that I most often use: directions to an address and hands-free car phone. I will miss the rest very much.

Yes, it's expensive. It's not just a cell phone service. From Day One, on the advice of my dealer in CA, I got my own cell phone service and never went through OnStar for my service. I always got good deals. If you want service by the call or by the minute, just dial 611 from your car and ask who the service provider is, and make your own deal right there or call them back from home after researching it. Don't blame GM or Cadillac for the cost of the cell phone service. After making your own cell pone deal, an OnStar call is just another 800 call, and you will be left with the basic OnStar charges which are about $35 a month.

What does this $35 a month get you? See all the bullets above. Yes, the Garmin is superior for point-to-point directions, but I wouldn't buy one if I had OnStar, and Garmins and other equivalent GPS units are expensive. But what you get with OnStar are three phone centers, one in Canada, one in North Carolina, and one in Michigan (someone correct me if my information is out-of-date), any two of which can handle millions of OnStar subscribers in case of an outage of any sort. All these people have workstations with On-Star specific navigation software capable of dealing with your situation in any of the bullets above anywhere in the world that OnStar is supported. Each of these people has On-Star specific training, equipment, quiet office space, salary, and a kid in college, all supported by your OnStar subscription fee. It's a bargain. I would have it forever if I could.

As a final note, you can have a deal with your local carrier for cell phone service in your car without an OnStar subscription for the asking. Just dial 611 from your car phone and ask about it. You can drop your OnStar subscription and get a local cell phone carrier to activate your car phone without OnStar.

[weephee]

I live in a rural rugged area. The place is polluted with deer with lots of cars either hitting them or going off the road to avoid them. The advantage of onstar to me is the comfort in knowing that if my wife were to go off the road and down an embackment the airbags would likely deploy and she could get help. You may recall a month or so ago, somewhere in the states, a lady drove her car off the road and was missing for 3 days. Police did a cursory check and couldn't find anything but husband kept searching and finally found the car in some sort of ravine. Wife was found hanging upside down in the car and almost dead. Luckily she lived. Airbags would likely have deployed and onstar would have sent out help. That has to be worth $18 or $19 a month in my opinion.

[Texas Jim]

I notice OnStar raised the month-to-month billing for the base Safe and Sound plan to over $20/month in October. I canceled my service.

I tend not to lock my keys in the car, or lose it

in parking lots and need someone to honk the horn.

Overall I would prefer to see OnStar go to a per-use type model rather than the monthly or yearly subscription model. For a passive service that is seldom employed, $20/month seems expensive to me. Yes, you can lower the cost somewhat by subscribing for a

year or more at a time and lower the effective monthly bill. For what you get day to day this still seems expensive. In my case, I'd rather put that in to my car budget for the next CTS.

Bruce,

Maybe you cancelled too quick. I just renewed mine today for 3 years. The Directions and Connections Plan.

They offered me the basic plan for 150 a year plus 6 months more FREE "PLUS" they gave me 300 more minutes on the phone at no charge. Thats only 27/28 cents a day counting the free 6 months and NOT counting the extra 300 minutes.

The The Directions and Connections Plan was 76 cents a day counting in the extra 6 months and NOT counting the extra 300 minutes. Heck, I can't even buy a McDonalds coffee for that. It is 99 cents plus tax.

Tell them you know somebody at GM....they don't even ask who...then you automatically qualify for the "Familyand Friends" plan.

I did have to go to the 2nd level as the phone answerer couldn't override what was on his screen. But it was pretty painless...the first one actually SUGGESTED I go to the next level because they could probably help me get a better deal, whereas he couldn't.

Whole thing took about 10 minutes.

Just looked at the On* website....300 milutes are 114.99 plus tax.