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Current File : /domains/samscars/Auto-Warranties.wpd
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�!��ݛ���Working�With�Automotive�Service�Warranty�Companies���If�you�were�to�ask�me�who�most�of�my�phone�time�is�spent�with�I�would�not�say�it�was�with�my�family,�friends�or�customers.�Like�many�of�you,�I�am�spending�a�greater�amount�of�time�dealing�with�warranty�adjusters.�With�the�advent�of�more�customers�purchasing�aftermarket�warranties,�I�find�I�am�getting�to�know�more�warranty�adjusters�on�a�first�name�basis.�Getting�used�to�the�policies�of�these�warranty�companies�can�be�a�little�challenging�to�the�first�time�caller.��Quite�often�I�will�ask�for�a�copy�of�the�customer��s�warranty�contract�or�� �certificate�of�coverage���before�I�call�and�speak�to�an�adjuster.�This�can�help�avoid�what�can�frequently�be�a�30�minute�or�greater�wait�on�hold.�Generally,�the�contract�will�clearly�state�what�is,�and�is�not,�covered.�However,�sometimes�there�can�be�foggy�areas�within�the�contract.���For�the�most�part,�today��s�automotive�service�contracts�come�in�two�versions,�the�stripped�and�the�loaded�model.����Bare�Bones��In�some�of�the�stripped�contracts�the�owner�will�be�required�to�add�chemicals,�supplied�by�the�warranty�company,�to�the�engine,�transmission�and�differential�fluids.�In�these�contracts�only�� �lubricated�components��will�be�covered.�The�warranty�company�is�basically�stating�that�their�chemicals�are�warrantying�and�protecting�your�lubricated�parts�against�failure.�In�these�types�of�contracts,�covered�lubricated�parts�will�often�be:�Crankshaft,�bearings,�oil�pump,�timing�gears,�camshafts,�internal�transmission�and�differential�components,�etc.�For�additional�fees�owners�can�add�protection�to�cover�the�A/C�compressor,�water�pump,�radiator,�power�steering�pump,�fuel�pump,�fuel�injectors�and�a�few�other�items.�In�these�stripped�contracts�many�customers�are�surprised�to�learn�that�the�head�gasket�is�not�covered.�The�warranty�adjuster�will�be�quick�to�point�out�that�it�is�not�a�lubricated�component.�Gaskets�and�seals�are�generally�only�covered�if�they�have�to�be�replaced�in�accordance�with�a�covered�components�failure.�In�other�words,�a�head�gasket�would�only�be�covered�if�the�gasket�had�to�be�removed�as�part�of�a�procedure�to�service�a�covered�lubricated�component.�These�warranties�will�usually�have�a�labor�cap�of�$50.00�per�hour.��Diagnosis�is�not�covered�and�is�the�customer��s�responsibility,�as�well�as,�tax,�fluids�and�Freon.�The�labor�is�often�capped�at�the�flat�rate�book�time.�In�fact,�recently�I�have�seen�cases�where�the�adjusters�look�in�several�flat�rate�guides�and�will�pay�the�lowest�time�found.�The�shop�may�want�to�request�that�the�vehicle�owner�pay�any�unapproved�difference.�This�can�be�the�difference�between�the�labor�rate�cap�and�the�shop��s�labor�rate,�if�higher.�Also,�if�the�shop�is�not�a�flat�rate�shop,�or�does�not�agree�to�the�time�given,�the�customer�can�be�billed�for�this�difference�as�well.�Just�make�sure�to�clear�that�point�up�before�performing�any�work.�Our�shop�will�sometimes�� �eat���this�difference,�but,�only�if�we�sold�the�customer�the�warranty.�Rental�car�expense�is�strictly�limited�to�a�verifiable�parts�delay�and�is�not�allowed�for�delays�caused�by�shop�scheduling�issues.�	@-�(, �The�cap�on�rental�cars�is�normally�a�total�of�$90.00�which�is�figured�to�be�a�3�day�maximum�at�$30.00�per�day.�Often,�these�warranties�can�be�purchased�in�terms�from�either�3�years/36,000�miles�or�4�years/48,000�miles.�Due�to�surcharges�for�4�X�4�and�� �exotic��cars�(Volvo,�Acura�BMW�etc.)�these�warranties�can�range�from�$400.00�to�$750.00.�These�contracts�will�typically�have�a�$3,000�single�repair�cap�and�a�$4,000�maximum�cap�per�life�of�the�contract.�In�essence�the�customer�has�purchased�a�limited�component�limited�time,�$4,000�insurance�policy.�If�the�car�needs�a�$2,800�transmission�the�customer�only�has�$1,200�dollars�left�on�the�policy�for�all�future�repairs.�Few�customers�learn�of�this�limit�until�they�have�had�two�large�repairs�and�have�to�dig�into�their�wallet.�����High�End��The�loaded�high�end�contracts�can�offer�much�greater�protection�as�well�as�longer�terms.�Many�of�these�contracts�will�cover�items�that�the�vehicle��s�original�warranty�covered.�In�these�better�contracts�no�chemicals�are�required�to�be�added�to�the�fluids.�Terms�of�these�high�end�contracts�can�be�as�long�as�7�years/100,000�miles�and�can�cost�upwards�of�$1,800.00.�They�may�have�a�$100.00,�$50.00�or�$0.00�deductible�depending�on�what�the�customer�authorizes�at�purchase.�Often�the�customer�will�purchase�what�is�known�as�a�$50.00�disappearing�deductible.�That�is�a�deductible�which�is�waived�if�the�repairs�are�done�by�the�dealer�that�sold�the�contract.��If�you�sell�warranties�this�is�a�neat�way�for�your�shop�to�participate�in�not�only�reducing�the�customer��s�future�repair�expense�but�providing�an�incentive�for�the�customer�to�return�to�your�facility�for�the�repairs.�These�contracts�are�extensive�and�can�cover�all�major�lubricated�mechanical�components,�including�gasket�failures.�Coverage�will�also�often�include�items�like:�power�locks,�power�antenna,�power�windows,�power�seats,�cruise�control,�gauges,�ABS�sensors,�ABS�pump,�ABS�modulator,�starter,�alternator,�wiper�motor,�wiring�harnesses�and�hand�operated�switches.�These�contracts�will�also�pay�for�diagnostic�time.�Generally�they�allow�one�hour�of�diagnostic�time.�Labor�time�amounts�are�still�payed�out�based�on�the�flat�rate�manual.�However,�these�contracts�often�do�not�have�a�labor�cap.�I�have�seen�cases�where�some�facilities�will�charge�a�slightly�higher�labor�rate�to�these�warranty�companies�to�help�offset�their�time�on�phone�waiting�for�approval�by�an�adjuster.�Makes�sense�to�me.�The�adjuster�is�not�likely�to�approve�and�extra�40�minutes�of�labor�waiting�on�hold�for�them.�You�might�say�that�the�automotive�service�personnel�have�learned�to�be�just�as�crafty�as�the�warranty�personnel.��Limits�of�liability�on�these�contracts�are�generally�a�once�repair�that�is�equal�to�the�current�NADA�(National�Auto�Dealers�Association)�� �trade�in��(wholesale)�value�of�the�car.�The�limit�of�all�covered�repairs�during�the�contract�will�typically�be�equal�to�the�price�paid�for�the�car.�This�is�always�disclosed�on�the�warranty�contract�at�time�of�purchase.�Rental�car�expense�is�expanded�to�include�a�rate�if�$30.00�for�every�� �eight�hour�portion�of�labor�time�required�to�complete�a�covered�repair�up�to�a�maximum�of�$150.00�per�breakdown.��An�additional�2�days�rental�is�allowable�if�there�is�a�verifiable�parts�delay.�Towing�is�paid�at�a�maximum�benefit�of�$50.00�per�occurrence.����I�will�do�this�if�you�do�that��	@-�(, �In�both�types�of�contracts�the�customer�has�to�satisfy�certain�obligations�for�the�warrantor.�The�customer�must�change�the�oil�at�least�every�6�months�or�5,000�miles�whichever�comes�first�or�at�the�interval�stated�by�the�vehicle�manufacturer.�The�timing�belt�must�be�replaced�at�the�interval�recommended�by�the�manufacturer.�The�customer�must�maintain�and�provide�all�maintenance�documentation�in�the�event�the�warrantor�requests�it.��The�service�facility�must�obtain�authorization�from�the�warrantor�prior�to�beginning�any�repair.�Again,�they�pay�towing�at�a�maximum�benefit�of�$50.00�per�occurrence.����Out�on�a�limb��For�those�of�you�who�have�seen�premature�timing�belt�failures�on�Mazdas,�generally�the�customer�is�out�on�a�limb.�On�many�Mazda�626�models�the�timing�belt�can�fail�outside�the�Mazda�warranty�yet�inside�the�aftermarket�warranty.�In�these�instances�the�aftermarket�warranty�adjuster�points�to�the�factory�as�being�at�fault�since�the�belt�did�not�make�it�to�the�first�specified�interval.�Customer�assistance�at�Mazda�rarely�results�in�any�help�from�them.�In�the�end,�the�customer�pays�for�the�belt.�Generally,�they�do�not�cover�maintenance�items�anyway�but�this�can�be�a�troublesome�loop�hole�that�you�as�the�service�provider�are�left�explaining�to�your�customer.������Exclusions��Typical�coverage�exclusions�are:�A�gradual�reduction�in�performance�due�to�day�to�day�routine�operation.�Breakdowns�caused�by�lack�of�proper�fluids.�Pre�existing�damage�and�breakdowns�prior�to�contract�purchase.�A�breakdown�caused�by�overheating,�rust�or�corrosion.���Breakdowns�caused�by�racing,�fire,�freezing,�lightning,�earthquakes,�windstorms,�hail,�water,�acts�of�public�enemy�or�any�government�authority.�All�parts�not�covered�by�the�original�manufacturer��s�warranty.�C/V�joint�boots.�Spark�plugs,�ignition�wires,�distributor�cap,�rotor,�batteries,�filters,�fluids,�wiper�blades,�brake�pads,�brake�shoes,�rotors,�drums,�suspension�alignment�procedures,�tires,�wheel�balancing�procedures,�shocks,�exhaust,�(other�than�manifold),�glass,�lamps,�bulbs,�moldings,�trim,�upholstery,�paint,�sheet�metal,�framework,�welds,�aftermarket�accessories,�non�factory�radio,�sunroof�and�alarm�systems.�To�my�surprise�all�navigation�systems,�even�factory�installed,�are�not�covered.�Not�a�very�nice�exclusion�to�the�guy�buying�a�used��2000�Acura�3.2�TL�with�navigation.�Any�vehicle�with�a�snow�plow�or�any�vehicle�that�has�been�used�to�plow�snow�is�not�covered.�Be�aware�that�often�sales�tax�is�up�to�the�whim,�or�lack�of�knowledge,�of�the�adjuster.�We�probably�process�about�50�aftermarket�warranty�claims�per�year.�In�all�of�the�claims�we�processed�in�2002,�not�once�was�the�Massachusetts�parts�sales�tax�covered.�So�far,�in�9�claims�this�year,�they�covered�the�tax�on�every�one�except�the�most�recent�claim.�Then�when�I�questioned�the�adjuster�about�it,�and�their�paying�of�sales�tax�in�the�past,�he�gave�me�one�of�their�standard�responses:�� �If�an�adjuster�paid�sales�tax�W�it�W�in�the�past�X�,�X�it�was�paid�in�error.��Well,�I�guess�those�other�9�adjusters�were�all�mistake�prone.����	@-�(, Ї���Final�points���In�closing,�here�are�a�few�other�considerations�to�keep�in�mind.�Most�of�these�aftermarket�warranties�have�a�cool�way�of�getting�around�some�repairs.�Be�sure�to�look�in�the�Exclusions�section�of�the�contract�for�this�clause:�� �Any�cost�or�other�benefit�for�which�the�vehicle�manufacturer�has�announced�its�responsibility�through�any�means�including�public�recalls�or�factory�service�bulletins.��If�you�ask�me�that�protects�the�warrantor�from�about�half�of�all�the�repairs�out�there.�Let��s�face�it,�half�of�the�items�we�fix�are�called�out�in�a�service�bulletin.�The�only�light�at�the�end�of�the�tunnel�on�this�subject�is�the�fact�that�not�all�adjusters�take�the�time�to�look�up�the�service�bulletins.�Another�words,�if��Y�your�Y��Y�you��re�Y�not�asked,�don��t�tell.�Case�in�point:�For�a�while�the�warranty�adjusters�were�paying�for�the�late�1990's�model�GM�3.8�liter�engine�cooling�leak�that�requires�redesigned�intake�manifolds.�However,�in�a�recent�attempt�to�call�that�repair�in�for�a�customer,�the�adjuster�promptly�replied:�� �No�way,�we��ve�paid�for�too�many�of�those,�it��s�a�service�bulletin�now�anyway,�and�we�don��t�cover�repairs�listed�in�bulletins.��I�guess�it�took�them�a�while�but�they�finally�figured�it�out.�I�think�once�the�adjusters�see�a�large�pattern�of�the�same�failures�coming�in�they�investigate�to�see�if��Z�its�Z��Z�it��s�Z�outlined�in�a�bulletin.�If�it�is,�their�off�the�hook�for�that�repair,�on�that�model�car,�forever.�Finally,�expect�some�resistance�by�the�adjusters�from�time�to�time�over�parts�pricing.��[�In�some�instances�[��[�Sometimes�[�the�adjusters�will�put�a�price�cap�on�parts�like�a/c�compressors�and�alternators.�Sometimes�the�price�is�less�than�even�the�cheapest�aftermarket�part�we�can��\�locate�\��\�find�\�.�When�I�challenge�the�adjuster�^�s,�^�they�give�me�a��]�toll�free�]��]�toll�free�]�phone�number�of�a�company�that�they�claim�I�can�purchase�the�part�from�at�reasonable�price.�Now�you�have�a�problem�in�that�there�is�not�much�room�given�for�your�parts�markup.�Unfortunately�that��s�a�case�where�the�customer�should�be�billed�the�difference.��a��_�Perhpas�_��a��a�Perhaps�a��`�Hopefully�`�the�smarter�customers�will�complain�enough�to�the�warranty�company�to�get�the�difference�back.���Hopefully�this�will�give�you�some�insight�in�how�to�handle�your�future�phone�conversations�with�aftermarket�warranty�adjusters.�����̀��

Anon7 - 2021