How Clean are Your Warranty Processes?

For sure, no dealership manages and maintains its warranty claims process as cleanly and thoroughly as they should, but given the nature of the job, probably the best they can.


Still, because processing warranties correctly requires diligence to warranty claim integrity by so many people in fixed operations, the devil can too easily hide in the details. When this particular devil’s left unchecked, the result can be costly to the dealership.


According to a new warranty processes white paper from Automotive Compliance Consultants, a poorly managed and maintained warranty process can result in factory audit chargebacks of $100,000 and up. In addition, unpaid claims, whatever the reason, cost you money – money owed you by the factory.


After all, you’ve paid your service manager, service advisors and technicians for the warranty work that has passed through your shop – but have you been paid the money due the dealership for every legitimate warranty claim?


Manufacturers are increasingly cost conscious when it comes to warranty repairs and as such are eyeing claims with increasing scrutiny.


Certainly no dealer wants to be surprised by factory audit findings. Prevention here includes pre-emptive warranty audits that help identify and then correct potential problems before the factory’s auditors do. An internal audit of your warranty claims can help verify the integrity of your processes. It can also help find where costly problems might be occurring, such as:


•              Fraudulent claims

•              Falsified punch times

•              Parts thefts

•              Unpaid claims


An internal audit should begin by pulling three months’ service records. This documentation should include every warranty claim RO and every customer-pay RO. This documentation should be in electronic and hardcopy format. Remember, federal law requires these documents be retained for seven years. More at Automotive Compliance Consultants.


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