Retail Warranty Reimbursement

Retail Warranty Reimbursement

Do you feel like the manufacturer-dealer relationship is working against you? Auto dealers may be able to get a more fair deal and a better bottom line with QB Business Solutions’ roadmap to success for retail warranty reimbursement.

In the automotive industry, it’s well known that state laws protect dealers from their manufacturer counterparts. Unnamed manufacturers behaved unfavorably in the past, and states showed they noticed by taking legal action. In fact, more states continue to enact protective legislation for industry dealers, and the number should pass 48 in the coming future.

Out of all these laws, there’s one law you should get familiar with today:

Retail Warranty Reimbursement

Auto dealer agreements can leave you stuck with painstakingly low parts markup, and it looks even worse if your warranty labor rate isn’t great. This warranty parts markup typically hovers around 40%, and some manufacturers will instead offer to pay you list or MSRP. But be wary…this “list” claim isn’t all that it seems. Instead, dealers most likely are being paid a markup in the 50-55% range instead of 76%. Therefore, things could get better.

This is why favorable state laws are there to help your parts reimbursement and warranty labor rate. By law in 48 states, you are entitled to be reimbursed by your manufacturer for warranty work at “retail” rates. This does not mean list or MSRP. In fact, in most states, the law defines “retail” as the dealer’s customer “repair” rate (or what a customer pays you for warranty repair orders).

That means you could be entitled to retail reimbursement with a significant increase in retail warranty gross profit and your bottom line if you take proper precautions and action.

Why This Matters to You

Even dealers with the most conservative pricing can improve their warranty gross profit by as much as 50%, and, best of all, it’s a one-time process. Dealers are entitled to retail reimbursement by manufacturers for warranty parts and a warranty labor rate increase. Now before we get into specific ways you can get the best possible results (warranty gross profit), we want to give you a full disclosure that this process takes on average 60 days  – but in the end, it’s entirely worth it.

Retail Warranty Reimbursement

Do you feel like the manufacturer-dealer relationship is working against you? Auto dealers may be able to get a more fair deal and a better bottom line with QB Business Solutions’ roadmap to success for retail warranty reimbursement. In the automotive industry, it’s well known that state laws protect dealers from their manufacturer counterparts. Unnamed manufacturers behaved unfavorably in the past, and states showed they noticed by taking legal action. In fact, more states continue to enact protective legislation for industry dealers, and the number should pass 48 in the coming future. Out of all these laws, there’s one law you should get familiar with today:

Retail Warranty Reimbursement

Auto dealer agreements can leave you stuck with painstakingly low parts markup, and it looks even worse if your warranty labor rate isn’t great. This warranty parts markup typically hovers around 40%, and some manufacturers will instead offer to pay you list or MSRP. But be wary… this “list” claim isn’t all that it seems. Instead, dealers most likely are being paid a markup in the 50-55% range instead of 76%. Therefore, things could get better. This is why favorable state laws are there to help your warranty parts and labor rate. By law in 48 states, you are entitled to be reimbursed by your manufacturer for warranty work at “retail” rates. This does not mean list or MSRP. In fact, in most states, the law defines “retail” as the dealer’s customer “repair” rate (or what a customer pays you for warranty repair orders). That means you could be entitled to retail reimbursement with a significant increase in retail warranty gross profit and your bottom line if you take proper precautions and action.

Why This Matters to You

Even dealers with the most conservative pricing can improve their warranty gross profit by as much as 50%, and, best of all, it’s a one-time process. Dealers are entitled to retail reimbursement by manufacturers for warranty parts and labor. Now before we get into specific ways you can get the best possible results (warranty gross profit), we want to give you a full disclosure that this process takes on average 60 days  – but in the end, it’s entirely worth it.

QB Solutions is your “Solution“ to receive your maximum allowed retail compensation and expert warranty claims processing service.

If you’re serious about increasing your dealer warranty gross profit, it’s best practice to consider the following before sending in a submission:

Best Practice #1: Know The Law

Based on previous experiences, you can be sure that certain manufacturers will read the law in an entirely different manner than you, and try to wiggle out of following the law altogether. The only way you can combat this legal obstruction is by being prepared. We know some manufacturers try to squeeze non-warranty repairs in to hurt your mark-up and others deliberately refuse to follow the law, so it’s crucial you know the warranty reimbursement statutes in your state, as all state laws will differ.

Best Practice #2: Follow The Manufacturer’s Protocol ‘To A T’

This is where things get a little tricky. You see, manufacturers try to shield dealers from knowing the rules to follow before sending in a submission. There are guidelines for the inclusion or exclusion of various aspects that make up the submission, so if you can figure out what they are, we suggest following them before you submit. It’s better to follow them ‘to a t’ (or pretty dang close to it) than to cause red flags right away. Save yourself a headache and thank yourself later by doing this from the beginning.

Best Practice #3: Optimize For The Long Run

When you optimize anything, you’re setting it up for success in the long run. There are no “quick- fixes” that last, and we both know that. That’s why it’s critical you select the proper submission sample. If you don’t invest in quality technology, you may cost yourself a few mark-up points, and that means losing thousands of dollars in warranty gross profit per year. Please take this point seriously, and give your submission some serious attention to detail and consideration.
You don’t want to look back in five years and think about the extra $20,000 you could’ve had.

Best Practice #4: Get Prepared For Warranty Auditors

Not only should you invest in quality technology for retail warranty reimbursement to help you pick the proper submission sample, but you should also have your submission audited thoroughly. As soon as you send your submission in, factory auditors pounce on it in hopes to find errors – and errors delay the process. This is why you should have someone familiar with the way the auditors operate ready to serve as your last line of defense before you send your submission in. Remember: you don’t want to upset these auditors, so do your best to get along with them or they just might keep you up at night.

Best Practice #5: Get Ready To Handle Manufacturer Responses

As foreshadowed and in many cases, your submission approval process will have its ups and downs. The manufacturer may reject submission altogether or refuse to accept certain parts of it. How you respond is what really matters. In fact, your response will determine whether you enjoy a mighty increase in your warranty gross profit, or leave with nothing to show for it. Regardless, you must be prepared to handle rejection because some dealers have sent in up to four re-submissions in two years. It is not fun when you know you’re losing thousands in profit, but it’s best to keep at it because the end-benefit is well worth it.

Wrapping All of This Up

At the end of the day, dealers of all sizes have a massive opportunity to increase their warranty gross profit. Not only are you entitled to receive fair reimbursement for warranty parts and labor and warranty work but you can also potentially double the size of your current retail warranty reimbursement revenue. Tackling the retail warranty reimbursement submission process should not be taken lightly, but if you do attack it judiciously and professionally, you can reap the benefits to get the best possible rates. By not taking action, you must know you’re causing yourself thousands of dollars per year. QB Business Solutions can only hope that you see the upside and take the necessary steps to execute the retail warranty reimbursement submission process accordingly.

When it comes to your warranty management service for warranty claims, rely upon and trust in QB Solutions’ successfully proven systems to regain your revenues and your time. Our staff is dedicated to your warranty claims processing success and is here to be a partner to your automotive dealership administration.

Wrapping All of This Up

At the end of the day, dealers of all sizes have a massive opportunity to increase their warranty gross profit. Not only are you entitled to receive fair reimbursement for warranty parts and labor and warranty work but you can also potentially double the size of your current retail warranty reimbursement revenue. Tackling the retail warranty reimbursement submission process should not be taken lightly, but if you do attack it judiciously and professionally, you can reap the benefits to get the best possible rates. By not taking action, you must know you’re causing yourself thousands of dollars per year. QB Business Solutions can only hope that you see the upside and take the necessary steps to execute the retail warranty reimbursement submission process accordingly.
When it comes to your warranty management service for warranty claims, rely upon and trust in QB Solutions' successfully proven systems to regain your revenues and your time. Our staff is dedicated to your warranty claims processing success and is here to be a partner to your automotive dealership administration.