Warranty Administration Procedures

I have worked in most positions in a dealership. In each department, there are established procedures that are used to complete tasks to meet forcasted goals. Sales use stringent procedures to ensure that cars are pushed across the curb. Service departments use multiple procedures to generate upsales and high customer satisfaction indexes. General office departments use precise procedures to keep all of the legal and accounting aspects of the dealership in order.

What about your warranty department? In so many dealerships, a warranty administrator (read: clerk) does not have set procedures as they do, "mundane tasks." - what I mean by that is, there are established procedures that manufacturers set for the process of warranty administration. It is not just about coding a repair order, flagging tech time, and seeing what gets paid - there are very detailed steps that are put together that will maximize the dealership return on warranty repair investment, while keeping those dollars virtually audit proof...yet so very many administrators with whom I speak, know very little if any of these guidelines - they just do "what they were shown by the person before them, cause that's how it's always been done!"...I am here to tell you, that is a dangerous road down which to travel!

Has your warranty administrator presented his/her breakdown of their daily process from A - Z, outlining how they are going to maximize your revenue and how they are going to keep your dollars safe? Are they familiar with the manufacturers established procedures and do they refer to them to assist with their daily process? There are very important questions to ask yourself, because you have to remember: your warranty administrator is responsible for 30%+ of your fixed operation dollars!

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Comment by Christopher Akin on September 23, 2011 at 5:17pm: @ Raymond: Precisely my point! The job description for a warranty administrator new hire should include how to chase dollars owed and how to properly account for dollars that cannot be collected...unfortunately, this step is often overlooked (at least my experience has shown me that...) and dealerships continue to hemorrhage dollars through their policy adjustment accounts. Your statement of 1/10 of an hour adding up is true, but the real scare about that is: if most service facilities were only losing 1/10 of an hour per day, they would be doing GREAT!

Thank you for the comment Raymond!

Comment by Raymond J. Stevens Jr. on September 23, 2011 at 3:04pm: When dealers start paying attention to warranty dollars; they will become more successful in retaining net dollars, the trouble is they only find out about it when the chargeback’s start mounting up or there is an audit. There is not enough attention to the details of write offs and adjustments to payments so it becomes easy to adjust instead of chase the money that is owed. One tenth of an hour per day adds up to a lot of lost net at the end of the year. I agree with you there needs to be a process but the process is in every Policies and Procedures Manual. This should be addressed in the hiring process and the job descriptions.

Comment by Christopher Akin on September 21, 2011 at 8:20am: @ Rex, Ken, Jim, and Jim - thank you very much for the support and your comments!

Comment by Rex Weaver on September 21, 2011 at 6:29am: Nice job and so true. More of the great stuff from Dealer Elite and exactly the type of posts for Fixed Op people
well done and a great topic

Comment by Ken Hite on September 20, 2011 at 8:11pm: Christopher,

Great post!

Warranty dollars are left on the table everyday in dealer land. Great to see you supporting the dealerbody and helping them to become more efficient, as well as collect their money.

Comment by Jim Richter on September 20, 2011 at 7:55pm: How true, if there even is a person dedicated to warranty management! Very few dealerships have processes and Job Functions which help their staff do their jobs properly and effectively, and Warranty is one of the last to get attention until serious money is lost.

Comment by Christopher Akin on September 20, 2011 at 10:58am: Thanks, Jim! - you are absolutely right...warranty departments are so often overlooked and when the manufacturer comes in because the processes are out of line, that's when the warranty department is all of a sudden a priority - but what a price to pay, huh?!?

Comment by Jim Kristoff on September 20, 2011 at 10:30am: Good blog Christopher!

Too many times, "Warranty" processes are not a priority.....until the Factory comes in to do an audit!