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Tough Dealings with Extended Warranty Companies


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Some of the warranty reps I have delt with even go so far as calling our local dealers and parts stores to locate the parts and get a price quote the same as my cost. Then call me with their quote numbers.

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The worst is Cars out of Pennsylvania by far. $60/hr Cap based on labor guide and they search online for the cheapest part and that is what they will pay for the part. They have no concern if the vehicle is disassembled on your lift and you have to wait 2-3 days for their online part. They charge the customer a $100 deductible and customer pays for diag and anything over their limit.

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This isn't just extended warranty companies either .Customer of mine had an 09 BMW, needed a radiator and was replacing the thermostat too. They had "breakdown coverage" on their insurance. Said lizard-represented insurance company that rhymes with psycho wanted me to come down on my labor hours across the board. "I show this many hours for this, and this many for this. I found the thermostat for $88. I can get a genuine BMW radiator for $100 less. We may have to ship in that radiator overnight." He kept me on the phone for a solid 25 minutes while I told him "No, no, no, no, no" and just kept working while I had him on speaker. Eventually he gave up and let me get the work done, but he was really trying hard to do whatever he could to get the prices down. Customer had a $250 deductible and said they've been paying $70 a month for this service for the past 4 years and didn't even realize they had it. Anyone wanna do the math on that?

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The warranty companies are crooks for sure, however I have dealt with several customers that have a completely unrealistic expectation of how the process is suppose to go. I always warn my customers that these warranty companies are crooked and they were probably talked into signing up for these policies. I give them the break down of what to expect. When the final numbers come back to what I was expecting and warned my customers about, they get all bent out of shape and some how it becomes our problem or we have to deal with the repercussions.

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I think Joe's strategy of warning customers about warranty companies beforehand is of the utmost importance. If you set the customer's expectations and let them know that they'll be left with whatever charges the warranty company wont pay, there's little chance they'll blame you when the prediction comes true.

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I have had a lot of dealings with these extended warranty companies and very seldom does it go well. Most of the time the customer is left with a bill of more than their deductible. Of course we do warn them ahead of time. It's still shocking to them.

The worst one was... yes... yes it was... a company out of PA.

They didn't like the price on this motor so they said they would get it. Not my choice, but when the motor arrived I expected to see a gleaming clean crate engine, what I got was a greasy run down used piece of crap. I refused to put it in. The extended warranty company then pulled the job and took it to another shop.

About 2 weeks later the same car was back, running like crap. AND, the warranty company wanted me to look at it. Because as they said, "It wasn't doing this before."

I laughed, and told them where they could shove it. Never seen the car again.

Nobody wins on these deals.

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I think Joe's strategy of warning customers about warranty companies beforehand is of the utmost importance. If you set the customer's expectations and let them know that they'll be left with whatever charges the warranty company wont pay, there's little chance they'll blame you when the prediction comes true.

 

That is #1, always prepare the customer up front. I also recommend that you understand each individual companies procedures EXACTLY, and record all communications with them.

 

I have had both good and bad experiences with multiple companies. The worst one being a company that "approved" the repairs and then refused to pay because, per their procedure, the wording should have been "authorized". (they argued that the "approved" only meant it could be covered, and we were waiting on "authorization" from upper management.) That one is still hard to talk about!

 

For the most part if you CYA and are a little cautious, they are not too bad. I always build in a little extra labor time, sometimes paid by the customer, to cover the added time required to deal with the process. Stick to your guns, and never let them tell you how to run your business.

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  • 3 weeks later...

I worked as a desk adjustor for 3 different extended warranty company's. Id be happy to help you guys out when dealing with them. Most of the time there are ways to get what you want, all depends on the verbage of the contract the customer signed. Most of they guys who you talk to on the phone are washed up tech or service advisors who couldnt sell. Feel free to mssg me.

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  • Have you checked out Joe's Latest Blog?

         0 comments
      It always amazes me when I hear about a technician who quits one repair shop to go work at another shop for less money. I know you have heard of this too, and you’ve probably asked yourself, “Can this be true? And Why?” The answer rests within the culture of the company. More specifically, the boss, manager, or a toxic work environment literally pushed the technician out the door.
      While money and benefits tend to attract people to a company, it won’t keep them there. When a technician begins to look over the fence for greener grass, that is usually a sign that something is wrong within the workplace. It also means that his or her heart is probably already gone. If the issue is not resolved, no amount of money will keep that technician for the long term. The heart is always the first to leave. The last thing that leaves is the technician’s toolbox.
      Shop owners: Focus more on employee retention than acquisition. This is not to say that you should not be constantly recruiting. You should. What it does means is that once you hire someone, your job isn’t over, that’s when it begins. Get to know your technicians. Build strong relationships. Have frequent one-on-ones. Engage in meaningful conversation. Find what truly motivates your technicians. You may be surprised that while money is a motivator, it’s usually not the prime motivator.
      One last thing; the cost of technician turnover can be financially devastating. It also affects shop morale. Do all you can to create a workplace where technicians feel they are respected, recognized, and know that their work contributes to the overall success of the company. This will lead to improved morale and team spirit. Remember, when you see a technician’s toolbox rolling out of the bay on its way to another shop, the heart was most likely gone long before that.
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