Almost every dealership deals with warranty coverage issues of some kind. Whether it is a manufacturer’s warranty, a parts warranty or an aftermarket or extended warranty, all warranties have excluding coverage of certain repairs. Common exclusions might involve vehicle problems caused by abuse, lack of maintenance or improper modifications. Conducting an investigation to confirm that the consumer’s complaint is caused by a non-warrantable concern is only the first step in the process that must be carefully conducted and documented.
When you discover an issue with a vehicle caused by a non-warrantable concern it is vital that your dealership carefully document the process by which the discovery was made, what tests you performed to verify it and, whenever possible, take plenty of photographs and/or video of the issue. It can also be helpful to have an independent third party confirm the diagnosis. This is especially true in cases of fuel or oil contamination where laboratory tests will provide excellent support for your position if you are involved in warranty litigation. Once you have completed your investigation you should share this information with the warrantor as soon as possible as it may require additional testing or require further information.
In creating your repair documents it is key to be as detailed as possible regarding what the cause of the issue is, why it is not covered, how you confirmed this, and what the estimated cost of repairing the item will be. Next, you must carefully explain the situation to the customer. In discussing your findings with the customer the dealership representative must be careful not to say anything that could back to haunt the dealership or the warrantor in a litigation. Unnecessary or out-of-context remarks about a warrantor are often cited by an upset consumer as a basis of some type of wrongdoing by a warrantor who has denied repairs.
Of course, most dealers would like to find a way to get their customers’ repairs covered under warranty. It makes a customer happy and it assures that a dealer can get paid for its work. However, attempting repairs of excluded items could be a breach of your agreement with the warrantor, or even possibly a more serious civil or criminal offense.
A more common problem with attempting to improperly repair a non-warrantable concern is the risk of an additional undiscovered or latent problem. In other words, if a consumer has a relatively minor problem caused by lack of maintenance but, as an act of “good faith,” a dealer finds a way to get the repair covered, it makes it more difficult to explain to the same consumer if they return with a more serious concern that it is not covered based upon the same lack of maintenance. Unfortunately, I have seen this happen several times and the consumer assumes that the “lack of maintenance” argument is invalid because “they fixed it last time.” It can be extremely hard to overcome this discrepancy at a trial or arbitration.
A dealer should always do its best to satisfy a consumer and it should never ignore a problem that is caused by a non-warrantable issue. If a warrantor decides to make an exception to a warranty exclusion, that is the warrantor’s decision. If a lawsuit arises as a result of that decision, the warrantor would generally be the one responsible for its decision. This is true especially if your dealership has followed the steps laid out above and documented the process.
