Dealers and Warranty Work

[CKN]

There was a recent discussion about how Dealers get paid/not get paid much for warranty work. There is a board with active Dealership personal participating, this is what they have posted-

Yes, which is why it is so funny to hear a thousand different versions of "the dealer doesn't want to honor the warranty." The dealer wants as much warranty work as it can get. Most dealerships would stop customer pays if it meant they could do exclusively warranty work. The manufacturer pays, pays on time, and once the claim is approved - doesn't argue about it.

This pretty much clears up all the MIS-information posted on the other thread.

 

[Opelman]

Most technicians would likely disagree.

 

[GMBoy]

Warranty work pays less than regular customer labor times. Every time. No tech likes this.

I think most dealerships with any kind of volume of new car sales is getting enough work from warranty and customer pays combined. It's the quality of work that is suspect at dealers and the poor tech has to meet warranty time for warranty repairs so he/she is taking short cuts along the way so it's the customer that is getting the shaft.

 

[slacktide_bitog]

It is well-established that warranty work pays less than customer-pay work. In fact, some states are starting to ban this practice. If they have to specifically prohibit it, then it means manufacturers are doing it.

The pay differential matters less to Toyota, which has little warranty work, than to Ford, which likely has more warranty claims. Stellantis dealers probably do more warranty work than customer work

 

[JTK]

How does a customer that uses dealer service not pay, or not pay on time? You don't get your car if you don't pay.

I have never heard a dealer tech praise warranty work and have friends and had relatives in that industry

 

[CKN]

How does a customer that uses dealer service not pay, or not pay on time? You don't get your car if you don't pay.

I have never heard a dealer tech praise warranty work and have friends and had relatives in that industry

Exactly. Vehicle will sit a week after it's done....because the customer doesn't have the money. If you have friends or relatives in the Industry-they have seen this too.

 

[dishdude]

If the job pays 1 hour for cash customers, warranty usually only pays .7

 

[Number_35]

If the job pays 1 hour for cash customers, warranty usually only pays .7

Does that reduction get passed on to the tech (rather than the dealership eating it)? If so, that doesn't seem fair.

 

[JTK]

Does that reduction get passed on to the tech (rather than the dealership eating it)? If so, that doesn't seem fair.

Yes. The job may take them 3hrs to do as quickly and effectively as they can and yet they will only get paid the warranty amount.

 

[DuckRyder]

I've been a dealer tech. Once you've done it a time or two if you cant beat the warranty time handily you should hang up your tools.

 

[PF52]

Is this one of those "Kumbaya" threads we keep hearing about?

 

[John105]

Warranty work pays less than regular customer labor times. Every time. No tech likes this.

I think most dealerships with any kind of volume of new car sales is getting enough work from warranty and customer pays combined. It's the quality of work that is suspect at dealers and the poor tech has to meet warranty time for warranty repairs so he/she is taking short cuts along the way so it's the customer that is getting the shaft.

I’m sure it’s more apparent today where doctors and dentists do not accept certain insurance companies…imho same idea with warranty work. I’m not sure why any shop would prefer it?

 

[GMBoy]

I’m sure it’s more apparent today where doctors and dentists do not accept certain insurance companies…imho same idea with warranty work. I’m not sure why any shop would prefer it?

That is a good point, Dr's sort of do warranty work when they charge $300 for a visit but the insurance only pays $100. But then again, the patient usually pays the difference so not techically the same 100%. I never said any shops would prefer it - my shop surely doesn't. I think you were referring to the original post.

 

[JTK]

Is this one of those "Kumbaya" threads we keep hearing about?

Might be the reason people are lining up to be dealer techs.

 

[SC Maintenance]

I worked at a dealer decades ago as a kid, and another issue with warranty work is you had to keep the parts for 90 days. Every once in a while the "warranty lady" would show up to look at certain parts. If they felt they didn't need replacement they could deny the claim. Seldom seemed to be an issue but tagging, storing then later disposing of the parts all costs man hours.

Back then the labor rate wasn't an issue - but we were a small town dealer so I am guessing our labor rate was low. If it was the same labor rate in the city I can see them not liking that at all.

 

[John105]

I worked at a dealer decades ago as a kid, and another issue with warranty work is you had to keep the parts for 90 days. Every once in a while the "warranty lady" would show up to look at certain parts. If they felt they didn't need replacement they could deny the claim. Seldom seemed to be an issue but tagging, storing then later disposing of the parts all costs man hours.

Back then the labor rate wasn't an issue - but we were a small town dealer so I am guessing our labor rate was low. If it was the same labor rate in the city I can see them not liking that at all.

Human nature...how much warranty work is done, where nothing is actually installed on a vehicle, the mfg is charged, and a repair shop keeps the part? Again BMW has certain parts that must be scanned into the system or no compensation. No offense but body work was like that when I was 18. I recall back then, every shop said if you go with them, they'd cover the deductible (by overcharging the insurance co). This is the same with health care. My wife got charged $0, but claims were submitted for drug and alcohol counseling and depression. Services she never got but the dr submitted on her behalf. I tried to fight it and the insurance co could care less (really my employer paid for these services never rendered since they are self-insured with a stop loss). The entire concept is flawed.

 

[CKN]

Human nature...how much warranty work is done, where nothing is actually installed on a vehicle, the mfg is charged, and a repair shop keeps the part? Again BMW has certain parts that must be scanned into the system or no compensation. No offense but body work was like that when I was 18. I recall back then, every shop said if you go with them, they'd cover the deductible (by overcharging the insurance co). This is the same with health care. My wife got charged $0, but claims were submitted for drug and alcohol counseling and depression. Services she never got but the dr submitted on her behalf. I tried to fight it and the insurance co could care less (really my employer paid for these services never rendered since they are self-insured with a stop loss). The entire concept is flawed.

This situation is an outlier. The hospital Group I am in is an extremely accurate and efficient provider. They are the basically the Healthcare provider in the state of Utah.
With computerzation and corporate owned nation wide body shops- with corporate insurance contracts this
" fudging" is almost impossible. You may remember the old ways- but it's not the 1960s anymore.

 

[BMWTurboDzl]

There was a recent discussion about how Dealers get paid/not get paid much for warranty work. There is a board with active Dealership personal participating, this is what they have posted-

Yes, which is why it is so funny to hear a thousand different versions of "the dealer doesn't want to honor the warranty." The dealer wants as much warranty work as it can get. Most dealerships would stop customer pays if it meant they could do exclusively warranty work. The manufacturer pays, pays on time, and once the claim is approved - doesn't argue about it.

This pretty much clears up all the MIS-information posted on the other thread.

Most people don't understand that the dealers are independent businesses and must submit a claim to get paid for warranty work AFTER the work has been completed. The only thing I've heard about warranty work is that automakers continually try to reduce their warranty expenses by reducing the amount of labor hours for repairs. So if a job takes 3 hrs the automaker will only pay for 2.5 or 2.75 hrs.

 

[BMWTurboDzl]

Might be the reason people are lining up to be dealer techs.

Or not because some dealerships are scamming technicians out of pay in some form or fashion.

 

[GMBoy]

Might be the reason people are lining up to be dealer techs.

From what I see, hear and read dealerships are actually hurting for techs.