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.