Common Issues Found During A Warranty Consultation
Warranty claims are a very important source of revenue for dealership
service departments. While many dealerships are fortunate to
have a well trained, competent warranty administrator who stays
on top of all the changes in the warranty policies, programs,
and the proper submission of warranty claims, we have found
that many dealerships are unaware of very important warranty
information.
This can not only subject them to costly warranty charge
backs, but also prevents them from claiming warranty dollars
they are allowed.
Below is a list of just a few of the problems we see
in warranty administration through our consulting services and
warranty workshops:
- Warranty Parts Center Debits - The WPC
will request specific parts be returned for inspection and
allow dealers 28 days to return the parts requested. If the
parts aren't returned in the allotted time, the dealer is
debited the entire amount of the claim. Too many dealers get
debited due to the fact that they aren't paying attention
to these requests. We have seen dealers lose over a thousand
dollars on a
single claim.
- Administrative allowances - GM offers
a labor administrative allowance on many repairs that are
sublet or part of a part exchange program. This extra labor
time is only paid to the dealer if they ask for it. We have
uncovered many dealerships that do not claim this extra labor
time thus missing out on hundreds of dollars.
- Pyramid repairs - Choosing labor
operations for repairs made by technicians isn't as
easy as many think. Even after finding the correct labor operation,
the warranty administrator must be aware of any overlaps or
same system repairs within the repair order. Should it be
one labor operation with straight time or should it be two
separate labor operations? Does the claim need an authorization
code or will the claim pay without it? GM monitors
authorization codes and if a
dealership uses these codes too often, they can and
will take this empowerment away from a dealer.
- Add-On repairs not authorized - There are
numerous situations that fall under the category of add-on
repairs and they must be properly approved and authorized
by service management. Add-on repairs are frequently the most
charged back items
on warranty claims by auditors. Dealers leave themselves
wide open by not properly authorizing these claims.
- Authorization codes not properly documented
- Service management is responsible for authorization codes
even though they often don't make the decision to apply
them to claims. Every authorization code must be properly
explained on the repair order and many dealers aren't
complying with this rule.
- Insufficient technician documentation - Whether it is a clear and concise cause of failure or a missed transmission flow code, GM has specific requirements for certain repairs and the omission of any of these requirements makes the claim subject to chargeback.
Fortunately, all of these issues can be corrected before it is too late. With some additional training and an honest effort from your employees, a dealership should have no problem becoming completely compliant.