Why don't Dealers want to do warranty work?

[Crazy Dazz]

Now I want say up front, that Wanneroo Mitsubishi are awesome. They have fixed everything on my daughter's Lancer, no problems, no questions asked. And when in for it's capped-price servicing they are excellent and even spot and take on other warranty work without being asked.
But they are the exception. They were owned by the Divigillio family for a long time, so maybe have a different approach?

I don't know exactly how warranty claims work, and maybe it's not the most lucrative, but surely it's still profitable?

But no, rather than undertake paid work, they would rather just shrug and blatantly lie,
And I'm not talking about something that's hard to diagnose, or a judgement call.

The tank sender (or senders) just aren't working correctly. It says the tank is full, even though it's down to about 5%

[T3rminator]

I thought they get reimbursed from head office. No "profit" to be made. That's why some big jobs they have to get authorisation from head office before they will take it on. Could be wrong.

I remember taking my TE50 into a ford dealership once to get the clutch tuning fork fixed. I was expecting to pay, because I didn't buy it from that dealer, it was an 02 model and it was around 2007 from memory. After doing the job the dealer sent me on my way without charge. I asked why, he said he managed to get head office to approve it. Unfortunately that dealership doesn't exist anymore.

[Tonz]

my 2 bobs worth.
yes head office may pay but I'd wager it's not 10 days after invioce.

any mechanic gets your job its either cash on pick up or shortly after by arrangement. manufacturers 30 day minimum.

[ratter]

Originally Posted by T3rminator

I thought they get reimbursed from head office. No "profit" to be made.

I spent 16 tears in a dealership and basically that was correct, the warranty labour rate was enough to pay all costs associated with operating a business, but no profit margin involved, but also not at a loss either.
The rate varied from dealership to dealership and would get assessed on a regular basis to ensure it was enough or not too much.

[PG2]

It is because manufacturers are not silly enough to pay for ten hours of labour on a job that takes seven.

Now that the cynical side of me is out...

There is a lot of mucking around with some manufacturers regarding warranty work. There is also not generally one manufacturer that is better than the other. Dealing with warranty claims can vary from month to month, manufacturer to manufacturer.

Sometimes it is not the job that the service department is trying to avoid, it is all of the other administration work that is involved. Get a manufacturer that has decided to clamp down on their warranty claims and the mechanic technician can quickly find themselves having to take 20 photos of the car, including photos showing the general condition of the car, plus a 3 page report outlining what they have done to try and 'fix' the problem.

Even if you get that far with photos and a report, it can sometimes take the manufacturer a couple of days to get back to them with an answer, mind you, that answer can sometimes be 'try this or try that'. The technician knowing that this or that is not going to work has to try it or the manufacturer will not go ahead with the claim.

Also, while all of this is happening it is generally tying up a hoist. Not only is it profit prohibitive to have a car up on the hoist, it can also create a back log of work as that hoist is out of use.

Sorry for the long post, but I hope that helps.

[jpd80]

Companies like Ford hold back money for projected warranty work but in later years,
they actually skimp badly in this area to free up the cash for other things. So while
dealers and Ford are still happy to do warranty work when required, sometimes they
drag their feet on the most inexplicable things…..

[Crazy Dazz]

There has to be some system that works, otherwise nothing would ever get done?

[GT1533]

The way it used to work at Ford Australia - although this is 20 years ago now - is that dealers were authorised to do warranty work up to a specified level, but anything that was very high cost had to be referred to Ford for prior approval. The dealer was reimbursed labour rates at a rate set by Ford, but which was pretty close to a retail rate. Parts were provided at cost plus a small handling fee rather than retail markups. The dealer was reimbursed by Ford by an offset to the dealer’s parts account with Ford which is settled monthly.

[slowsnake]

Originally Posted by T3rminator

I thought they get reimbursed from head office. No "profit" to be made. That's why some big jobs they have to get authorisation from head office before they will take it on. Could be wrong.

I remember taking my TE50 into a ford dealership once to get the clutch tuning fork fixed. I was expecting to pay, because I didn't buy it from that dealer, it was an 02 model and it was around 2007 from memory. After doing the job the dealer sent me on my way without charge. I asked why, he said he managed to get head office to approve it. Unfortunately that dealership doesn't exist anymore.

What a shame, takes years to find a good one and they don't make as big a profit because they do a proper job!...
Its called customer care, met a few in my time, and good service was more important than good profit.


Cheers King Billy

[jpd80]

I bought a new EF II cardinal red GLI in September 1995 only to find that
Ford had reduced the seat travel by about an inch, enough to make for an
uncomfortable driving position.

I was able to explain this to the DP by showing him the difference when
compared with a friend’s EF I. He was able to intercede on behalf of me
to Ford who agreed to change the seat base to EF I (~$700).

I don’t know if that sort of thing would be entertained today……..

[Bossxr8]

Some jobs are allocated labour hours that are unrealistic. So dealership loses money on the labour when it takes longer than the allocated time. Ford had issues with this years ago, but made chances to allocated hours to be real world and achievable.

[Itsme]

Originally Posted by PG2

It is because manufacturers are not silly enough to pay for ten hours of labour on a job that takes seven.

Now that the cynical side of me is out...

There is a lot of mucking around with some manufacturers regarding warranty work. There is also not generally one manufacturer that is better than the other. Dealing with warranty claims can vary from month to month, manufacturer to manufacturer.

Sometimes it is not the job that the service department is trying to avoid, it is all of the other administration work that is involved. Get a manufacturer that has decided to clamp down on their warranty claims and the mechanic technician can quickly find themselves having to take 20 photos of the car, including photos showing the general condition of the car, plus a 3 page report outlining what they have done to try and 'fix' the problem.

Even if you get that far with photos and a report, it can sometimes take the manufacturer a couple of days to get back to them with an answer, mind you, that answer can sometimes be 'try this or try that'. The technician knowing that this or that is not going to work has to try it or the manufacturer will not go ahead with the claim.

Also, while all of this is happening it is generally tying up a hoist. Not only is it profit prohibitive to have a car up on the hoist, it can also create a back log of work as that hoist is out of use.

Sorry for the long post, but I hope that helps.

Agree the dealers get paid minimal for warranty work compared to a paying customer which you will find most dealers will try to do warranty work in between other jobs hence the reason why warranty work can take longer.

Cheers

[hayseed]

Originally Posted by Bossxr8

Some jobs are allocated labour hours that are unrealistic. So dealership loses money on the labour when it takes longer than the allocated time. .

^^^ This ^^^

With the advent of Longer Warranties & Capped price servicing the Book Time Allocated by the car Companies takes a fair bit of Practice to achieve.! Particularly in Smaller Dealerships & on Slow(er) selling Models..

[Big_Daz]

Originally Posted by Bossxr8

Some jobs are allocated labour hours that are unrealistic. So dealership loses money on the labour when it takes longer than the allocated time. Ford had issues with this years ago, but made chances to allocated hours to be real world and achievable.

Yep, a friends husband has been a Service Manager at a large dealership who said exactly this when I asked him one evening over a few (or many) beers.

Ive never had an issue getting warranty stuff fixed on any of my cars... the best of the lot was Mazda (from cars I've owned at least) the worst was Jeep (though that was more because the dealer was useless, rather than FCA themselves)

[ratter]

When in a dealership, if we believed the allocated time was not achievable, our DSM would come out and go through the job, with a Tech doing it, if it was not achievable then it got amended.

[jaydee]

"I've got this problem with my car, it runs rough and doesn't change gears smoothly"
"Oh that's normal, you will need to adjust your driving style"

I love that chestnut.

[MDS69]

Originally Posted by jaydee

"I've got this problem with my car, it runs rough and doesn't change gears smoothly"
"Oh that's normal, you will need to adjust your driving style"

I love that chestnut.

It’s either “they all do that, that’s normal” or “haven’t seen/heard that one before”

[ratter]

Originally Posted by jaydee

"I've got this problem with my car, it runs rough and doesn't change gears smoothly"
"Oh that's normal, you will need to adjust your driving style"

I love that chestnut.

again with my time in a dealership, if someone had a "complaint" that was normal for the car, we would take them out in a similar car.
If someone was not happy with an answer from the dealership, it was left for the DSM to inspect it on their next visit and make the call, there was no issue in getting cars fixed under warranty if the car had a fault.

[hawke]

A million years ago, when I was Service Manager for a General Motors distributor, the paper work for warranty stuff was complex. Warranty claim forms had to have an intelligible and detailed description of the fault, diagnosis and solution. If you could not satisfy those conditions, and also confirm that the fault was the result of a manufacturing or assembly defect - not paid.

Unfortunately, paperwork and written expression is not the core skill of many mechanics. As a result, many claims forms had to be resubmitted. As indicated by others, the pay rate for warrenty work was not high, so there were many dealers who just didn’t bother with it.

[Crazy Dazz]

Originally Posted by Bossxr8

Some jobs are allocated labour hours that are unrealistic. So dealership loses money on the labour when it takes longer than the allocated time. Ford had issues with this years ago, but made chances to allocated hours to be real world and achievable.

But that's even worse.

So the the supervisor is essentially say "ok, I know exactly what the problem is because it happens often. The manual says that a trained mechanic can do the job in 60 minutes. But because I employ minimum wage stoners and give then no training, but charge their time at full whack, I know it will take them 2 hours. And in that 2 hours they could have ripped off at least 5 grandmothers for an overpriced oil change.
So I'll just straight-up lie to the customer.

[Eaturbo]

Easy, labour rate is low $$$ per hour, time to do job is not enough and they won't pay diagnostics time. ie $80 per hour and allow 4 hours to do a 6 hour job. 2 hours diagnostics time unpaid. So 8 hours spent on job with 4 hours paid. $320 paid by Ford for 8 hours work. So this works out to $40 per hour for 8 hours. Mechanic is getting $30 per hour plus super, holidays and sickies. So instead of doing an 8 hour job and getting $960 they get $320 plus they make nothing on parts. These numbers are just an example but you get the idea.

[M&Ms]

Originally Posted by Crazy Dazz

Now I want say up front, that Wanneroo Mitsubishi are awesome. They have fixed everything on my daughter's Lancer, no problems, no questions asked. And when in for it's capped-price servicing they are excellent and even spot and take on other warranty work without being asked.
But they are the exception. They were owned by the Divigillio family for a long time, so maybe have a different approach?

I don't know exactly how warranty claims work, and maybe it's not the most lucrative, but surely it's still profitable?

But no, rather than undertake paid work, they would rather just shrug and blatantly lie,
And I'm not talking about something that's hard to diagnose, or a judgement call.

The tank sender (or senders) just aren't working correctly. It says the tank is full, even though it's down to about 5%

To be honest, that is a Safety issue and I'd be jumping up and down about it. It's in their interest to fix it, and investigate if this is a widespread problem that should be addressed through a recall.

Personally, I've had a few experiences with warranty. The best (surprisingly) have been Alfa Romeo, followed closely by Ford, but in a distant and disappointing third, Subaru are the worst. Maybe it's a Japanese thing?

With Alfa Romeo, I've had my alarm ultrasonics module replaced, numerous software updates done free of charge, tiny rubber seal issues rectified around the windows (which I even thought were pedantic), and a couple of big ticket items including radio (was resetting every now and then, they ordered a new module in right away), and a new drive shaft (which I'm sure had nothing to do with a few hard launches, yet replaced no questions asked) - the last 2 items were $6k in parts alone, and 2 days in the shop.

Ford realigned my squeaky dash, fixed my leaky sump, cured my noisy diff, and looked at the many noises the car made during every service, with great communication to be honest.

But Subaru, geez. The drivers seat bolster was tearing open with only 8000km on the car, and Subaru made us work to get it sorted under warranty, which they finally did as a 'goodwill gesture.' Similarly, the manual gear boot started tearing, after shrugging it, they go off and order a whole surround, excluding the damaged bit, and change it out and didn't even figure out what they have done until we told them. It took a second visit to rectify it. Then the worst was when they damaged all 4 rims during the last service and wanted to deny it. We went all the way to Subaru's head office who conceded and got all 4 wheels resprayed at a cost of $1500 to them. Never mind the car needs servicing every 6 months, and they charge the full amount of the cap price quoted, yeah real nice. Sat nav updates requested 4 times until they figured it out... They didn't even bother to wash the car the last 2 services. Honestly has put us off the brand (this is the 3rd brand new Soobie we buy too!) Still can't beat the $5000 quote we got on the previous STi to change brake disc's and pads at 25,000km. Got the rotors machined, and sourced pads myself through Racebrake (forum sponsor) and all done for $700 or so. But I digress....

[Bossxr8]

Originally Posted by Crazy Dazz

But that's even worse.

So the the supervisor is essentially say "ok, I know exactly what the problem is because it happens often. The manual says that a trained mechanic can do the job in 60 minutes. But because I employ minimum wage stoners and give then no training, but charge their time at full whack, I know it will take them 2 hours. And in that 2 hours they could have ripped off at least 5 grandmothers for an overpriced oil change.
So I'll just straight-up lie to the customer.

So you think it's better that they allocate 0.5 hours for labour instead of 1 hour then?

The whole point is the labour hours for the job are supposed to be achievable. Then the dealership is going to be more willing to take the job on than palm the customer off by denying the warranty claim.

Ford have taken steps like this and their customer service ratings have increased markedly over the past 5 years. So much so that they were ranked equal with Mazda at no1 last year.

[Poetic Justice]

Originally Posted by Crazy Dazz

But no, rather than undertake paid work, they would rather just shrug and blatantly lie,
And I'm not talking about something that's hard to diagnose, or a judgement call.

The tank sender (or senders) just aren't working correctly. It says the tank is full, even though it's down to about 5%

Sorry to nitpick, but have they said that they don't want to do the work or that they haven't come to the same diagnosis as you have? Running a dealership myself I don't quite understand how any service front of house staff could be trying to get across a message of "we don't want to do your warranty work" without it coming back on them fairly negatively.

Originally Posted by Crazy Dazz

But because I employ minimum wage stoners and give then no training, but charge their time at full whack, I know it will take them 2 hours.

By this comment I take it you're not all that up to date with the sheer skills shortage in the automotive sector.

Believe me when I tell you, if we could hire the right people or train existing ones to be better equipped in our workshops, we would!

[Crazy Dazz]

Originally Posted by Crazy Dazz

Now I want say up front, that Wanneroo Mitsubishi are awesome. They have fixed everything on my daughter's Lancer, no problems, no questions asked. And when in for it's capped-price servicing they are excellent and even spot and take on other warranty work without being asked.
But they are the exception. They were owned by the Divigillio family for a long time, so maybe have a different approach?

Yeah ok, maybe I need to clarify?
Wanneroo Mitsubishi are awesome, they are the exception to my rant against dealers.

Nuford, meh.

Phoenix Holden? Wouldn't **** on em if they were on fire.

Metro Holden are the subject of my current rant.

Originally Posted by Bossxr8

So you think it's better that they allocate 0.5 hours for labour instead of 1 hour then?

The whole point is the labour hours for the job are supposed to be achievable. Then the dealership is going to be more willing to take the job on than palm the customer off by denying the warranty claim.

Yeah, I'm just ****ed off.
I took a gamble and it hasn't paid off.
I wonder if part of it, is the former dealers being ****ed at GM??

[Franco Cozzo]

Originally Posted by Poetic Justice

By this comment I take it you're not all that up to date with the sheer skills shortage in the automotive sector.

Believe me when I tell you, if we could hire the right people or train existing ones to be better equipped in our workshops, we would!

That's because the industry and in particular light vehicle side of it treats people like **** and pays **** all, I get paid more driving a desk in a very nice climate controlled air conditioned office selling stuff to the same people as me but who still fix cars - and I'd get paid more still if I transitioned out of automotive into something similar in a different industry.

Until that changes all the kids doing apprenticeships are going to go the path of construction trades where the money is actually decent, the overheads are lower if you go the self employed route and you have all the benefits that they get on construction sites, or they'll go onto university.

In my Year 12 group, out of 140 of us who finished, only 10 went onto apprenticeships (and two of us automotive trades )

I just took on a new kid at work and he's getting paid more than a qualified light vehicle mechanic in Melbourne and has absolutely zero experience in the automotive industry, has the right attitude though and a passion for cars - why would you push this kid into an apprenticeship for? No 4 years of slave wages, no providing tens of thousands worth of your own tools and no getting dirty for **** all.

The automotive 'skills shortage' is a joke, was being handled by abusing 457 visas and treating them terribly because if they complain they'll get sent back home - COVID put a stop to that pretty quick. I've been on the skills shortage list for a decade yet the wages haven't done too much improving in that time.

Its a sunset industry, the profit margins are all taken by the people up the chain leaving nothing for the workshop which means nothing for the guy/girl turning spanners (or the owner of said workshop)

Probably worth it in a mining state where the wages are more competitive, somewhere like Melbourne that a service based economy, don't bother is my advice to any young ones reading this.

Its kinds like maths based sciences like engineers being poached by the finance industry where there is better coin and conditions on offer, they have transferable skills - seen that happen a couple times at work.

The 'cream' of a high volume automotive workshop (servicing) is going to disappear when EV's become prominent and your service items are rotors and pads which now hardly wear because of regenerative braking.

I liken automotive to hospitality - you do it for the passion and the love of it cause you sure as **** don't do it for the wages.

[ratter]

Originally Posted by Crazy Dazz

I wonder if part of it, is the former dealers being ****ed at GM??

GM sold their warranty to an insurance company, they make a dealer jump through hoops to even get a small claim passed

[Crazy Dazz]

Originally Posted by Poetic Justice

Sorry to nitpick, but have they said that they don't want to do the work or that they haven't come to the same diagnosis as you have? Running a dealership myself I don't quite understand how any service front of house staff could be trying to get across a message of "we don't want to do your warranty work" without it coming back on them fairly negatively.

As I said, they literally claimed to have looked at a system that isn't working, and have said "we couldn't find anything wrong." It's the equivalent of standing in a pitch black room and proclaiming that there's nothing wrong with the light.
On another issue, there is a clear problem with the engine, and it fits the symptoms of a known fault, and they are again saying "we couldn't find anything wrong."

Originally Posted by Poetic Justice

By this comment I take it you're not all that up to date with the sheer skills shortage in the automotive sector.

I'm well aware of the problem in Perth.
Basically, if you have an IQ above 70, can stay off hard-drugs just long enough to pass an initial screening, and are willing to turn up for work at least 50% of the time, you can make $600 a day working shut-downs.
Doesn't leave a huge talent-pool for city based trades.

[Poetic Justice]

Originally Posted by Franco Cozzo

That's because the industry and in particular light vehicle side of it treats people like **** and pays **** all, I get paid more driving a desk in a very nice climate controlled air conditioned office selling stuff to the same people as me but who still fix cars - and I'd get paid more still if I transitioned out of automotive into something similar in a different industry.

Until that changes all the kids doing apprenticeships are going to go the path of construction trades where the money is actually decent, the overheads are lower if you go the self employed route and you have all the benefits that they get on construction sites, or they'll go onto university.

In my Year 12 group, out of 140 of us who finished, only 10 went onto apprenticeships (and two of us automotive trades )

I just took on a new kid at work and he's getting paid more than a qualified light vehicle mechanic in Melbourne and has absolutely zero experience in the automotive industry, has the right attitude though and a passion for cars - why would you push this kid into an apprenticeship for? No 4 years of slave wages, no providing tens of thousands worth of your own tools and no getting dirty for **** all.

The automotive 'skills shortage' is a joke, was being handled by abusing 457 visas and treating them terribly because if they complain they'll get sent back home - COVID put a stop to that pretty quick. I've been on the skills shortage list for a decade yet the wages haven't done too much improving in that time.

Its a sunset industry, the profit margins are all taken by the people up the chain leaving nothing for the workshop which means nothing for the guy/girl turning spanners (or the owner of said workshop)

Probably worth it in a mining state where the wages are more competitive, somewhere like Melbourne that a service based economy, don't bother is my advice to any young ones reading this.

Its kinds like maths based sciences like engineers being poached by the finance industry where there is better coin and conditions on offer, they have transferable skills - seen that happen a couple times at work.

The 'cream' of a high volume automotive workshop (servicing) is going to disappear when EV's become prominent and your service items are rotors and pads which now hardly wear because of regenerative braking.

I liken automotive to hospitality - you do it for the passion and the love of it cause you sure as **** don't do it for the wages.

I see that you're pointing out the very valid reasons for the shortage - but the OPs point made it sound like management pick the cheapies on purpose - which is really not the case.

I completely agree that as a trade automotive is not a great one when compared to the earning potential of other trades - but who is to blame?

Car manufacturers that pay pennies on warranty repair work as mentioned?
Car manufacturers hellbent on "capped servicing" and "fixed price servicing"?
Customers who question every dollar spent in an automotive workshop?

At the end of the day trades pay well due to profitability. What is the return for trades such as builders, plumbers, etc? I'm willing to bet that is far higher than the piddily returns the automotive sector makes.

[Poetic Justice]

Originally Posted by Crazy Dazz

As I said, they literally claimed to have looked at a system that isn't working, and have said "we couldn't find anything wrong." It's the equivalent of standing in a pitch black room and proclaiming that there's nothing wrong with the light.
On another issue, there is a clear problem with the engine, and it fits the symptoms of a known fault, and they are again saying "we couldn't find anything wrong."

So who's fault?

The dealer or the manufacturer?

If a car presents to a dealer with an issue and no fault is detected by following the processes put in place by the manufacturer - do you expect the dealer to just make repairs that haven't been confirmed necessary out of good will?

Who's paying the labour and the parts?

I get your frustrations. There's been many times when cars are presented to us with issues that we cannot replicate - but we absolutely must follow the manufacturers policy otherwise we get no support and sometimes even financial penalties as a consequence.