There are few things more frustrating for automotive dealers than warranty work. The work itself isn’t an issue, and it’s great that you are able to offer that service to your clients. The problem is obtaining a fair amount of reimbursement, from manufacturers, for warranty work you completed.

Late last year, Ohio made changes to their dealership franchise laws, that focus on resolving this issue. Ohio set forth legislation that requires automakers to reimburse dealers at retail rates, for warranty related parts and labor.

Ohio is not the first state to make this change. Many States now have similar laws and it is quite possible that the many of the remaining States will implement similar laws in the next few years.

While this is an excellent step in the right direction, automotive dealerships will still face obstacles.

Vague Laws

While most States have legislated retail level reimbursement, some of the laws are vague and lack detail, so they are hard to enforce.

In turn, loop holes often allow automotive manufacturers to define the retail rate. In some situations, they will bypass the law completely and continue using traditional calculations, such as cost plus 40%, without repercussions.

Application of the Law

In States where a specific formula for calculating the retail rate has been agreed upon, problems can still arise.

For example, in Ohio, to determine the retail rate, your dealership must submit at least 100 qualified and consecutive orders for non-warranty repairs within a specified time frame. These documents will then be reviewed and an average rate of markup will be calculated.

While this ensures that reimbursement is reasonable for both parties, the process is complex and time-consuming, which can result in frustration or discourage submission. In addition, your markup may not be consistent across parts, meaning that the average may or may not reflect the markup on the actual parts used.

Another not so well known fact is that most dealerships do not know, they can submit for an increase once per year.  The analysis needs to be done again with a new set of Repair Orders. 

Manufacturer Pushback

While manufacturers are not allowed to retaliate against dealers who are seeking retail rates for warranty reimbursement, dealerships are experiencing pushback. Specifically, manufacturers and factories are requesting additional documentation or taking steps to discourage submission.

At Pro Count West, we have the skills and experience you need to ensure you maximize your warranty reimbursements. We will effectively fulfill manufacturer requirements, to help you get the rate you deserve for your parts and labor.

In addition, we will free up your staff from the time consuming task of the analysis required, minimizing disruption so that they can focus on their regular duties.

Contact us today and we will conduct a warranty analysis to help you stay in control of your warranty reimbursements.