The Car and Truck Fleet and Leasing Management Magazine

Warranty Recovery Costs Remain Flat for 2017

November 2017, by Mike Antich - Also by this author

Graphic courtesy of Getty Images.
Graphic courtesy of Getty Images.

All new vehicles are covered under a factory warranty program. Warranty recovery can help manage fleet costs.

According to an annual operating cost survey conducted by Automotive Fleet, the sister magazine of Fleet Financials, warranty recovery remained flat in 2017 and it is anticipated that it will continue to be flat in 2018.

“With a few exceptions in select segments, warranty recovery has remained fairly stable in 2017 when compared to 2016,” Christopher Foster, manager, truck account administrator for ARI.

There have not been any significant changes with regard to warranty recovery in 2017; warranty recovery has remained relatively flat when compared to 2016.

More Stringent Enforcement

One ongoing trend is more stringent enforcement of manufacturer recommended services to be eligible for warranty coverage.

At a Glance
  • Warranty recovery remained flat in 2017 and it is anticipated that it will continue to be flat in 2018.
  • For the past several years, there has been more stringent enforcement of manufacturer recommended services to be eligible for warranty coverage. 
  • Most warranty recovery is occurring during the term of the new-vehicle warranty. Longer base and powertrain warranties have led to a reduction in post-warranty recovery.
  • Higher vehicle quality is the key factor for the decrease in warranty recovery monies.

“The trend of more stringent enforcement of manufacturer recommended services to qualify for warranty coverage continues, so fleets should be aware of the recommendations and follow the manufacturer’s guidelines. Again, technology can help in this case, tracking when preventive maintenance is needed and providing alerts so that nothing is missed,” said Foster.

Following the manufacturer’s recommended PM schedules is critical to maximize chances of warranty being covered at the dealership.

“Warranty recovery claims have come under greater scrutiny, with increased emphasis placed on customer loyalty. One possible explanation is the overall decrease in U.S. light-duty vehicle sales this year. Accurate and complete maintenance history has become increasingly important to warranty recovery efforts,” said Kelley Hatlee, national service department customer support supervisor for Enterprise Fleet Management. “Additionally, in recent years, some manufacturers have reduced powertrain warranty coverage periods, which increased the need for warranty recovery. For vehicles enrolled on our maintenance programs, Enterprise Fleet Management collects and centrally locates maintenance records and maintains strong relationships with our manufacturer partners.”

Post-Warranty Adjustments

Most warranty recovery is occurring during the term of the new-vehicle warranty. Longer base and powertrain warranties have led to a reduction in post-warranty recovery.

“Warranty coverages that extend comprehensive and powertrain coverages as well as offer free maintenance for some period of time have all worked to impact warranty coverages and ‘good will’ or post-warranty recovery,” said John Wuich, vice president, business analytics at Donlen.

“Post-warranty policy adjustment decisions are often being made at the dealership level. We observed consistent CPM in all segments with warranty recovery this year compared to last year. Fleet powertrain warranty coverage among the manufacturers has remained consistent for fleet vehicles,” said George Albright, CAFM, assistant director of fleet maintenance for Merchants Fleet Management.

Improved Vehicle Quality

Higher vehicle quality is another factor for a decrease in warranty recovery monies. Increased quality, extended emissions and powertrain warranties are contributing factors.

“The timeframe in which dealers are completing warranty claims is increasing. This can be due to delays in part manufacturing in some cases. Also, as OEM’s become more competitive in the preventative maintenance and general repair market, they are becoming busier, which puts pressure on the service departments to complete warranty repairs quickly,” said Dale Jewell, manager U.S. maintenance for EMKAY. 

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