MAXIMIZE Your Dealership’s Warranty Service Reimbursements By Truist Dealer Services, with special contribution from Jason Allen, Shareholder, Bass Sox Mercer, Attorneys at Law Dealerships often rely on healthy margins from service departments to provide a consistent, reliable source of revenue. With a significant percentage of total service hours dedicated to warranty and related work, optimizing the pricing and processing of your warranty reimbursements can outsize your profits and dealership growth. Work That Only Dealers Can Do Today’s vehicles are more dependable, often experiencing fewer issues or failures requiring warranty repairs. Yet they present more opportunities for OEM-reimbursed service work beyond warranty fixes, including: • Model Recalls: Recalls apply to specific models of all ages, including vehicles beyond the warranty period. The National Highway Traffic Safety Administration (NHTSA) mandates recalls at the federal level and tracks repairs via a nationwide system. Each new recall triggers a wave of reimbursable service work on affected models. • Manufacturer Maintenance for New or Certified Pre-Owned Vehicles: Some manufacturers include prescribed maintenance as part of new or certified pre-owned (CPO) vehicle sales. This reimbursable maintenance work generates reliable revenue while fostering an ongoing relationship with customers. • Extended Warranties: Buyers can purchase extended warranty plans for new and qualified used vehicles, creating additional reimbursable warranty work. Non-OEM warranties issued by third parties offer further service opportunities, with reimbursement dictated by the contract terms. This body of service work opens the door to more revenue through reimbursements and customer engagement. As the exclusive source of manufacturer-certified technicians to fulfill warranty and recall work, dealers can strengthen relationships with current customers and attract new ones. Warranty work secures ongoing service and parts revenue and keeps your dealership top of mind when it’s time to trade and buy again. The Mechanics of Warranty Reimbursement Reimbursed service work provides a reliable source of steady revenue. With the right measures, it can become even more lucrative. Dealers who study warranty reimbursement details, refine workflow tracking and documentation to optimize warranty payments, and follow OEM program requirements can maximize rates and reimbursements, leading to increased service revenue. Maximizing warranty reimbursements depends on state laws, which dictate how retail rates for labor and parts are determined. Most states require manufacturers to reimburse dealers for warranty work at the same rates charged to retail customers. These laws are subject to change from time to time, necessitating that dealers keep 18 Illinois Automobile Dealer News
RkJQdWJsaXNoZXIy MTg3NDExNQ==