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Third Party/Aftermarket Warranties... WORST!


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I see more and more of these terrible warranties everyday! Its so hard to do business and explain to customers that they practically have gotten scammed. They seemingly don't understand the business of these warranties and how difficult it is to actually get them to pay, how long they will be out of a car while an inspector comes to see the vehicle and what small percentage these crooks are willing to pay. I am so sick and tired of these companies and how they make us, the repairers the bad guys! How do you guys deal with this even after you give your customers all the warnings??

 

I am in it with this one customer that replaced his wheels and springs with aftermarket parts and is now trying to get the warranty company to pay for his shocks and springs. They are most likely going to deny his claim and I am already bracing myself for the backlash.

 

I am almost at the end of my patience with dealing with these companies and really ready to say we are not dealing with them anymore. Problem is I feel it will turn potential customers away even the ones who have the warranties but understand the items they do and don't cover.

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I had my first customer yesterday that mentioned extended warranty when I told him about an oil leak. He had no paper work in his glove box or anything for it, so he said he would get back with me when he finds it... Hearing your story, I'm dreading having to deal with it now.

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I had my first customer yesterday that mentioned extended warranty when I told him about an oil leak. He had no paper work in his glove box or anything for it, so he said he would get back with me when he finds it... Hearing your story, I'm dreading having to deal with it now.

 

Brace yourself and don't take what these warranty jackasses to heart. I'd make it as crystal clear to the customer that there is no guarantee of anything and these companies are about not approving claims since it hurts their bottom line (how else are they suppose to make money!). Also you might want to think about charging an administration fee because between the phone conversations, faxes, waiting for inspectors, more phone conversations, negotiations, etc it can eat a lot of your time.

 

 

The contract is between the warrenty company and the customer. I tell contract holders that I will contact the warrenty company on their behalf and deal with them. ANYTHING THE WARRENTY COMPANY DOES NOT COVER THEY ARE RESPOSIBLE FOR PERIOD. The problem is these people are lead to belive the contract covers EVERYTHING. Some pay well and some dont. Just dont let the warrenty company dicate to you what is right and wrong. We are the repair profesionals.

 

 

The general customer doesn't understand how the whole system works. These are not face to face businesses nor are they altruistic. I pose this question to my warranty contract customers, "If you pay $3000 for a warranty and expect the warranty company to pay out $4000 worth or work, how do they make money? Does it make sense to you that their goal is to deny your claims?" I usually get either blank faces or the "yeah I know..." responses. Then why did you buy the warranty you dummy!!

 

The genius customer I am dealing with now says to me yesterday, "Why didn't you sharpie the H&R sign so they wouldn't know my springs are aftermarket???" and "I don't care if they won't pay, I want to use the warranty. If they won't pay I'll get another company!" The best was when he said in an agitated voice, "You should have told me that they would deny my claim if I had aftermarket parts on my car!" My response was, "It was your responsibility to read through your policy, I buy and sign for the policy and neglect to understand the warranty would be voided if you installed performance parts, you did." The response I got was, "... Your suppose to give me suggestions! You should have told me to swap out the springs, I would have brought you the old ones!" My reply, "...So just to get this straight, you want me to tell you how to scam the warranty company?" All I heard was dial tone after that ;)

 

Customers that have been dumb enough to get suckered into these warranties are generally going to be #1 Stupid as all hell and/or #2 cheap as all hell.

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I have a simple philosophy on this, I simply tell the customer that I am going to bill them and they may seek reimbursement from the warranty company if they wish, I have tried to work with a few of these clowns and it was a disaster, my time is simply to valuable to be wasted on this.

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  • Have you checked out Joe's Latest Blog?

         5 comments
      I recently spoke with a friend of mine who owns a large general repair shop in the Midwest. His father founded the business in 1975. He was telling me that although he’s busy, he’s also very frustrated. When I probed him more about his frustrations, he said that it’s hard to find qualified technicians. My friend employs four technicians and is looking to hire two more. I then asked him, “How long does a technician last working for you.” He looked puzzled and replied, “I never really thought about that, but I can tell that except for one tech, most technicians don’t last working for me longer than a few years.”
      Judging from personal experience as a shop owner and from what I know about the auto repair industry, I can tell you that other than a few exceptions, the turnover rate for technicians in our industry is too high. This makes me think, do we have a technician shortage or a retention problem? Have we done the best we can over the decades to provide great pay plans, benefits packages, great work environments, and the right culture to ensure that the techs we have stay with us?
      Finding and hiring qualified automotive technicians is not a new phenomenon. This problem has been around for as long as I can remember. While we do need to attract people to our industry and provide the necessary training and mentorship, we also need to focus on retention. Having a revolving door and needing to hire techs every few years or so costs your company money. Big money! And that revolving door may be a sign of an even bigger issue: poor leadership, and poor employee management skills.
      Here’s one more thing to consider, for the most part, technicians don’t leave one job to start a new career, they leave one shop as a technician to become a technician at another shop. The reasons why they leave can be debated, but there is one fact that we cannot deny, people don’t quit the company they work for, they usually leave because of the boss or manager they work for.
      Put yourselves in the shoes of your employees. Do you have a workplace that communicates, “We appreciate you and want you to stay!”
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