For a fleet, a warranty recovery program can be a source of savings from monetary reimbursements, credits, reallocation of shop resources, and shop efficiency improvements. Here are a few things to know to maximize the effectiveness of your warranty program.
1. Don’t Ignore the Small Stuff
Many times, small items such as light bulbs, wiper blades, alignments, and minor adjustments are covered under warranty and often overlooked. Remember, it takes a penny to make a dollar, and over the space of a year, those dollars add up.
Talk to shop technicians and supervisors about customer concerns related to adjustments, bulbs, and miscellaneous items to make them aware of possible warranty coverage.
2. Follow up on Manufacturer Recalls and Customer Satisfaction Programs
Recalls can become a serious liability if not performed when notifications are sent. It’s good business practice to designate the warranty recovery manager as the person to receive these notifications and manage a program to ensure their completion.
Recalls are the manufacturer’s way of covering a known product liability under warranty, even if the vehicle is long out of warranty.
Customer satisfaction programs are designed to extend warranties on a specific component or replace it in a specified time frame. Furthermore, be aware of recall and customer satisfaction program expiration dates when applicable. Without this information, repairs on these known issues can cost money.
3. Don’t Overlook the "Information Highway"
Open fleet accounts with auto manufacturers and sign up for their online vehicle information system, such as Ford’s OASIS (Online Automotive Service Information System) and General Motors GMVIS (GM Vehicle Information System).
ALL-DATA, a non-OEM online technical information service, is another great resource. These services provide on-the-spot access to information such as technical service bulletins and recalls. Train shop technicians how to use these tools and make them part of shop service practices by checking each vehicle during shop visits.
4. Don’t Leave Warranty Savings on the Table
What do you do when your three-year old vehicle has a major component failure, such as a transmission, 10,000 miles out of warranty? Don’t be afraid to ask the manufacturer for after-warranty assistance.
You may be surprised how much assistance is offered for those expensive repairs. You may get a portion or all of it paid by the manufacturer. Let’s say the manufacturer chips in 50 percent of a $2,400 transmission repair. That’s $1,200 saved.
5. Pay Attention to the Parts Department
In addition to automobile and equipment manufacturer warranties, the parts department is another resource for savings in the form of reimbursements, credits, and free part replacements.
Work with the parts department staff to set up a tracking system on replacement service parts, batteries, and specialty items.
6. Don’t Pass Up Negotiated Credits from Parts Houses and Vendors
When performing warranty repairs in-house, we all prefer reimbursements in the form of cash. However, a credit from an equipment vendor or parts house is just as good as cash when considering the bottom line.
If your fleet has specialized equipment for which dealers may not be as readily available for small or emergency repairs, look into a negotiated contract. Some dealers may work out reimbursements in the form of credits.
7. Consider Outside Services that Perform Warranty Repairs
Depending on the size of the shop, work load, and available resources, outsourcing warranty work can be a great benefit to a fleet’s bottom line in the form of cost avoidance. Sometimes it’s better business to have resources allocated on preventive maintenance, light duty, and other repairs with a quick turnaround.
If an outside shop is available to perform larger, time-consuming repairs, it will save money in downtime and shop efficiency. Again, these situations can be a positive in a warranty recovery program as a cost avoidance, allowing allocation of shop resources to other pressing matters.
8. Watch Out for Chargebacks
You work hard to claim in-house warranty repairs and the savings it brings to your fleet. Be careful not to set yourself up for a chargeback from the manufacturer. Improperly documented repairs and a failure to retain old parts can set you up to lose the savings earned.
Make sure proper procedures are followed during repair and claim processes. Implement a parts retention program with shop and parts personnel, as well as a designated area to store retained parts. Most manufacturers require all failed parts be held for a specific period of time, 30 days in most cases, and made available for inspection. If a manufacturer requests a failed part for inspection and it’s not available, you may be charged back the amount of the claim.
9. Don’t Set Yourself Up for a Manufacturer’s Audit
The manufacturer reviews all warranty claims to confirm the repairs were justified. Items such as repeat/ineffective repairs, over-repair, unavailable supporting documentation, mileage/date alterations, misrepresented VIN or fleet name, a non-OEM part claimed as genuine, and a part damaged, but not defective are all red flags for a manufacturer’s audit.
Make sure claims are justified and supported. Retain records with supporting documents for at least one year (or longer if required) after the claim has been paid. The manufacturer may request to see your records to justify a claim.
10. Review Manufacturer Warranty & Policy Manuals
Warranty and policy manuals are not the most exciting reading materials. However, regularly perusing these materials will keep you knowledgeable about different warranties and their coverages.
Whether you’re getting actual cash, credits, or avoiding costs, utilizing a warranty recovery program to save your fleet money will be a win-win for you and your customers.