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What is your shop policy with extended warranty plans


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These F'ing things are the bane of my existence. They keep you on the phone forever, you have to wait for inspectors, they always want to short change you on repair costs and also deny claims. My biggest problem is the time. What kind of policies do you have against this. If it takes 45 minutes to clear an estimate over the phone thats 45 minutes of wasted time. Not including the time it takes for these guys to come out and inspect and then the follow up call.

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There is a fine line between what we want and what will drive a customer away. Customers are already very tenative and have high anxiety when it comes to car repairs. The last thing I want to do is present them with an obstacle in using something they paid thousands of dollars for (aftermarket warranty). I just have to find a way to ease my pain whilst not putting myself out of the competition for a customer's dollars.

 

I feel that adding an administrative cost on their RO will drive a wedge in between the relationship since customers don't understand that it takes a ridiculously long time to get this process done compared to the 2 seconds it takes a customer to say yes for us to begin work.

Edited by mspecperformance
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Get a wireless headset for your shop phone, so you can do work and walk around the shop while waiting on hold.

 

I just got one, and our service manager has had one for a long time. Big time game changer to allow you to leave the counter and not miss phone calls too.

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Depends upon the warranty company and whether it is named coverage or not. We have one (Alpha Warranty) that wants to send you cheap parts they find on line. If a company sends out an adjuster remember they are looking for a reason to deny the claim. A good Warranty company like AUL or GE or Toyota does mean $$$$.

 

Yuck. Haven't seen that one yet, thank goodness.

 

We just had a Volvo in with extended warranty. Entire steering rack approved @ 60% margin. Called the customer, and he was ecstatic. Granted the job was $2300, and he paid $3000 for the warranty, so....

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Any time I have a warranty claim I have my customers price then inflate the labor time and parts prices and bid it that way, sometimes it works, sometimes they cut you down a little but I have never had a job that pays less then the customer would.

 

Being in Alaska helps also they dont really send anyone out.

Edited by John Pearson
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We've had good luck with warranty companies so far... Seems they either agree to pay everything or deny everything. We've only had one that wanted to send their own parts and we let the customer make the call on what they wanted to do. Sure we missed out on parts profit, but we padded the labor and got paid for it.

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Our labor rate is 15.00 more per hour for warranty companies. We also absolutly refuse them supplying the parts. We inform our customers from the start that yes we will deal with their warranty company and wait to get paid from them but they usually wont cover the complete repair and they,the customerare responsible for the balance. We've never had a problem, my buisness , my rules. If the warranty company refuses we call the customer and inform them,some we lose and others have us fix it and fight the warranty company on their own.

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Our labor rate is 15.00 more per hour for warranty companies. We also absolutly refuse them supplying the parts. We inform our customers from the start that yes we will deal with their warranty company and wait to get paid from them but they usually wont cover the complete repair and they,the customerare responsible for the balance. We've never had a problem, my buisness , my rules. If the warranty company refuses we call the customer and inform them,some we lose and others have us fix it and fight the warranty company on their own.

 

 

ive had some warranty companies contact the owner after receiving our estimate which can cause problems with the process.

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  • 2 weeks later...

Does anyone charge an administrative fee to the customer of say 25 to 35 dollars to cover the time lost dealing with the warranty companies? I was at a local new car dealer service counter recently and they had a laminated statement on their counter saying that they did.

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I feel the same way. It's not my warranty, so I will charge my normal price. The warranty either covers it or not, and the customer will pay any differences. If the customer has any issues they can take it up with the warranty company personally. I will not allow them to send me any parts. It's my way or the highway!

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  • 1 month later...

Keep the warrantee work coming .They take time and you have to learn how to negotiate. Its a give and take.

 

We only accept warrantees that we have copies of the exact policy.

 

If you are a very small shop i can see how it could affect your workflow.

 

I have a policy no inspections till after 1pm .This way the waiters don't get pushed aside and the tech can explain the failure as per the exact contract.

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Keep the warrantee work coming .They take time and you have to learn how to negotiate. Its a give and take.

 

We only accept warrantees that we have copies of the exact policy.

 

If you are a very small shop i can see how it could affect your workflow.

 

I have a policy no inspections till after 1pm .This way the waiters don't get pushed aside and the tech can explain the failure as per the exact contract.

 

 

How do you deal with the limited amount of money they pay out as well as the non covered items? It is a huge waste of time and customers don't ever have a good feeling about coming out of pocket for repairs but if a warranty company will not cover the full labor rate, full cost of parts, and cover all the items on a repair order then it lands on the owner. I have a $4300 job on an 2009 4.8 X5 for oil leaks from gaskets, a leaky water pump, some other stuff and the warranty ended up covering the water pump for a grand total of $301 after the deductible. Tell me how this customer benefited from forking over thousands of dollars to this company for "coverage" and "peace of mind"

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How do you deal with the limited amount of money they pay out as well as the non covered items? It is a huge waste of time and customers don't ever have a good feeling about coming out of pocket for repairs but if a warranty company will not cover the full labor rate, full cost of parts, and cover all the items on a repair order then it lands on the owner. I have a $4300 job on an 2009 4.8 X5 for oil leaks from gaskets, a leaky water pump, some other stuff and the warranty ended up covering the water pump for a grand total of $301 after the deductible. Tell me how this customer benefited from forking over thousands of dollars to this company for "coverage" and "peace of mind"

 

When a customer asks about an extended warranty I always tell them to only purchase one if they can get seals / gaskets, and high-tech coverage. If they already have a warranty and don't have these coverages it was definitely a waste of their money. These days if these things are covered the customer almost always covers what they paid out for the warranty. Some warranty companies are better than others. We always quote out factory parts and up our labor with them, and sometimes we still have to charge the customer the difference. We explain this to the customer before we even work on their vehicle, and most of the time, they are completely understanding.

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Understanding the warranties is a art that took me 25 years.I am a prefered repair center for 3 companies.

 

We promote warranties that Neal from the American Automobile Association AAA sells.

 

Maxcare, Fidelity, and a few others are policies that are great. Exclusionary policies are the ones we hunt for.

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I say its a case by case situation. Keep a list of the warranty companies that are exhausting, like the example mspecperformance and xrac mentioned in this posts and refuse to deal with them going forward. However there are some good ones too that are reasonable and approve the needed work. This might be a good place to exchange experiences about aftermarket warranty companies as well as their names. After all the idea here is the collective mind and experiences we all have so its mutually beneficial.

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Add an "administrative cost" line to the estimate. When they tell me they will only pay $xx.xx then I tell them I will get in touch with the client for the balance. Parts cost the same. Some will fight it, the good ones will pay it. At any rate anything the warranty company don't pay the client must.

Ditto

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How do you deal with the limited amount of money they pay out as well as the non covered items? It is a huge waste of time and customers don't ever have a good feeling about coming out of pocket for repairs but if a warranty company will not cover the full labor rate, full cost of parts, and cover all the items on a repair order then it lands on the owner. I have a $4300 job on an 2009 4.8 X5 for oil leaks from gaskets, a leaky water pump, some other stuff and the warranty ended up covering the water pump for a grand total of $301 after the deductible. Tell me how this customer benefited from forking over thousands of dollars to this company for "coverage" and "peace of mind"

They don't benefit. What gets me is when/if the vehicle goes to the dealer and they do the job with no out of pocket to the customer just to make us look bad.

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I agree. I don't know how they manage to squeeze this out of those extended warranty companies

 

From personal experience, I have dealt with extended warranties through the dealer and independent. It works the same way. If the dealer sold the customer the warranty, they do cover it completely most of the time. If it was a warranty they purchased elsewhere, the customer would pay the difference in price.

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Since I also own a collision repair shop we are used to dealing with good carriers and bad carriers. We are upfront with the customer about the potential that the carrier may not pay for certain items and/or procedures that we require to properly provide them with our warranty. We inform them of what the additional cost will be over and above what the carrier will pay and they get to decide what they want to do. We tell them we will be happy to call for approvals but understand that some are good about returning calls and have reasonable response times, some do not. We will do everything possible to get your claim approved but they have the final say. We don't argue with them, we present facts. We also charge $15 per hour more for warranty company work. If we don't get reasonable response times, we just inform the customer.

We didn't pick the warranty company and will do everything within reason not to alienate the customer. In most cases the customer pays the difference.

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Yes, I tell the customer I will charge an admin fee depending on how long the phone time is, usually $25.00, I document all phone times. When they say the dealer doesn't charge I tell the customer that's because they made 50% profit on you selling the warranty. I never have them send parts, even if I have to lower the price a little. The goal is to keep the customer coming to us, of course if you don't accept x warranty's they will go elsewhere.

There are warranty plans that I have charged higher parts & labor than you would for a customer pay job, you might as well start out high priced when you call them and play their game.

I had this Audi here that needed an alternator and I called the x warranty company and the guy on the other end goes "holy cow", I say what's wrong, he says they may have to buy this car back, he said they have spent over $10000.00 on it in claims!! It was an A8. They agreed to replace the alternator, seems like it was over $1000.00.

Dave

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Many of the extended warranties want to send the parts or they allow the price that they say would pay for it from their source. A general example might be like a vw compressor with clutch that lists from dealer at $895.00 but they will allow $299.00 if we source it. I inform all parties that if they sent the part and it is a bad part someone will be paying me for r&r.

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Wow this subject has a lot of interesting answers. Be careful of GWC they have a $75 cap per hr and want to send crappy parts. INDS - INTERSTATE used to be good but now they send used parts and want to pay cost on dealer parts or send them. Its ok i will take the labor . I love when the parts fail and they pay us 2-3 times over the course of the policy.

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  • 2 weeks later...

I have found them to be headaches for the most part. They have an established labor rate that they "will pay" and most also want to only pay you what "they show parts COST THEM" if they were to buy them. Essentially acting like a customer wanting to bring their own parts AND give them a reduced labor because they're letting you do the work! And then....spend 30 minutes on the phone interrogation. IF I take one in, and it's usually only in rare instances, But I have always explained to the customer that I won't compromise the quality of work I do for them just because the warranty company wants it done as cheaply as possible, so I will perform the repair as I would otherwise and unfortunately THEY will have to pay not only the deductable but the difference that the warranty co wont pay. Usually they understand and end up upset with the warranty co and not me.

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Oh, I loved this one. We did one for an A/c compressor fail in the past. After the back and forth on the phone, I was told that "the policy covers freon, but not the evac and recharge service"!! Seriously! Try and explain that one to the customer!

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Wow real warrantee IE: service contracts companies pay us just fine and pay msrp. Learn how to find the customers with real policies. We are located near a few Carmax stores maxcare pays ok .The new car dealers ie VW AUDI BMW MB sell great exclusionary policies.

125 per hr and msrp. whats the problem with that.

Please send me all your extended warranty work i will take it.

 

Our customers with stated policies don't have a big problem paying the difference in cost between the crappy payments and the real cost.

 

 

 

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      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.
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