Sunday, October 2

New Laws on Dealer Warranty Reimbursement

The new law governing Dealer Warranty Reimbursement is set to address some of the issues dealers have with this program. While most manufacturers accept the requirement for warranty repair reimbursement, some have policies that undermine dealership rights. The new provision aims to remedy this situation by requiring manufacturers to pay reimbursement based on market norms. Dealers should consult the terms and conditions of their dealership’s warranty program to learn more about their legal obligations.

In addition to ensuring dealerships comply with the law, obtaining a higher warranty reimbursement rate requires a higher retail repair rate. If state laws permit, dealers may seek higher reimbursement rates. Third-party companies or private legal counsel can assist with these efforts. Consulting firms can help dealers maximize their rebates and warranty gross profit. The benefits of using a third-party warranty company are worth considering, especially if you’re trying to increase retail repair rates.

To be eligible for a higher warranty reimbursement rate, dealers should submit at least 100 customer-pay repair orders within 90 days. These claims must be for non-routine maintenance repairs. Dealers can request a higher reimbursement rate only once a year. However, the process can be confusing and most manufacturers reject initial submissions due to lack of legal expertise. That’s why dealerships should seek the help of a consultant who will build a stronger case for them.

The new law in Mississippi, HB 746, is effective on July 1, 2021. The bill amends previous law and changes the obligations of suppliers regarding warranty reimbursement. The law also mandates that a dealership receive reimbursement for parts and labor at retail rates, and prohibits cost recovery fees and surcharges for parts. Further, the law also mandates that the parts and labor that the dealer replaces must be marked at retail.

As part of the new policy, GM is creating a national system to process warranty reimbursement claims. This system is called WINS. The dealer submits the claim electronically, indicating the date of service, vehicle VIN, applicable labor operation, failed part number, and parts reimbursement amount. Within five days, the GM warranty reimbursement office receives a credit memo. These claims are also vetted by the Warranty Parts Center.

The National Highway Traffic Safety Administration (NHTSA) has issued guidance on how warranty claims should be substantiated. Generally, warranty reimbursement for parts and labor is based on the cost of the part, not on the time the technician spent on the vehicle. It does not require a time stamp, but it is best practice to have one. A time stamp is necessary to prove that the warranty service was carried out at the scheduled time.

In some states, dealers are reimbursed at retail market rate, which may differ from the rate paid to the consumer. Moreover, some states don’t have consumer protection laws, which could limit the choice of repair facility. Thus, dealers should check with their state legislature before opting for a warranty policy. The law governing Dealer Warranty Reimbursement must be amended to reflect this change. It should not be construed as a “dumbing down” of the consumer.

GM’s WINS system was implemented in 1992 and was implemented nationwide by GM dealers. This program now processes over forty million claims per year, paying out more than $4 billion annually. Darling’s dealership carries three lines of GM cars, which means it was previously using three separate systems. Before installing the WINS system, he used three separate systems. However, the WINS system is constantly being updated to better serve consumers. Get in touch with Warranty Part for Retail Warranty Reimbursement.

While NJFPA prohibits below-retail compensation for warranty transactions, it does not restrict compensation for other transactions. However, it does not regulate the terms of these other transactions, which may reduce the dealer’s return. Further, if a franchisee’s warranty agreement isn’t in line with the franchisee’s rules, it will be difficult to enforce the franchise’s policy. The statutory mandate prevents franchisors from isolating warranty issues. It also protects the dealer against arbitrary actions from manufacturers.

Fortunately, this law isn’t unworkable. It’s an important protection for consumers, as consumers deserve to be able to get their cars repaired. If a dealer refuses to reimburse them, it’s likely to be forced to file supplemental claims and face a lengthy legal battle. The process is often complicated, though, so if you’re seeking reimbursement, it’s important to check your policy to make sure you’re not being overcharged.

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