The Factory Warranty Repair Process At Car Dealerships

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We had a Car Pro Show listener last Saturday from New Jersey perplexed over the fact that his truck had been in a dealership service department for eight weeks with no end in sight.  I see this with every brand vehicle made. I suggested he contact the manufacturer directly and if not resolved, to try to invoke the Lemon Law, which every state has.

Factory Vehicle Warranties

I get a lot of questions from listeners and viewers about their vehicle warranty. Not just the initial warranty, but the powertrain coverage and extended warranties. I get enough that it is pretty clear that the majority of people do not really understand how the process works from the dealership side.

It is your dealer with whom you interact when your vehicle needs a repair that is covered by any manufacturer’s warranty.  Not all automakers handle warranty repairs exactly the same, but generally here is the way things work. 

Although it is a complicated process, I will do my best to make it simple.

Let’s call the car manufacturer Acme Automaker just for simplicity sake. Acme Automaker builds a vehicle and sells it to Roadrunner Auto Sales (your dealer). Roadrunner Auto Sales then sells the vehicle to a consumer. At the time of purchase, it is explained what your warranty coverage is for the vehicle you purchased. One of the main things you need to understand is that it is Acme Automaker, the manufacturer of your vehicle, that is responsible for, administers your warranty coverage, and pays for your repairs, not the dealership.

Given that, what is the responsibility of the dealer, Roadrunner Auto Sales? It is simply to make the repairs as prescribed by the manufacturer of the vehicle. This is one of the biggest challenges dealers face today…how do they make you (their customer) happy, while at the same time get the manufacturer (Acme Automaker) to pay the bill? You can see the problem here for the dealers.

So, you have a problem pop up with your car, either major or minor and you return to the service department of a dealership. You just want your car fixed, but the dealer also wants to be reimbursed by the factory for making the repairs, so there are complex procedures that have to be followed with every repair order that is written on your car. If the dealer does not do everything exactly right, it doesn’t get paid for performing the repair.

Most people think it is the dealership that decides what is a covered repair and what is not, but that is not true. It is all laid out by the manufacturer. On the other side of the coin, the manufacturer opens itself up to abuse by some dealers who would cheat the system if not for the rules set forth by the warranty policy manual.

The dealers are always stuck in the middle on warranty repairs, they have to please you so you will come back and continue to do business with them AND they have to satisfy the entity paying the bill, which is the manufacturer that built the car.

Luckily, for most dealership customers, the process of getting your vehicle fixed and all the “behind the scenes” paperwork and computer entries are transparent, but sometimes the dealership has to call the factory for approval before the work can be done, especially with extended warranties. If the factory declines, the customer will generally get mad at the dealership.

It is also noteworthy to mention that the factory pays the dealership very well for work performed, but only once. If you take your car back for the same problem, the dealer generally eats the second and subsequent repair costs. This can be why cars sometimes have to be taken back multiple times for the same repair. If the technician is not very good, or inexperienced, it can be a real issue for the customer.

Since dealers are paid well to perform warranty work, the dealers welcome you with open arms no matter where you bought your vehicle. That is a little different than it was some years ago.

I hope this gives you a little insight into what dealers go through to repair your car under the factory warranty. It is not easy, but the goal is to keep both the consumer and the factory happy. 

Related Reading:

Certified Pre-Owned Warranties 

Photo Credit:  thodonal88/Shutterstock

 

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13 Comments
  1. Kohta 4 years ago

    Learned. I sell parts everyday to many people from different walks of life. They all treat dealerships like some money satanist. I know it’s more expensive, but they get instructions straight from the factory that MADE the vehicle. Who would know the car better? A shadetree mechanic? No, the person with step by step instructions to fix the car would; like a dealership mechanic.

  2. Chuck Emerling 7 months ago

    Concerning extended warranties. You did not address the fact that a number of after market warranty companies have gone out of business. A friend of mine had two out of three go out on him. That’s probably why I now own two Korean vehicles

    • Robert 3 months ago

      Who got the money paid to for my extented warranty from the Bank

  3. Art 4 months ago

    Ok, I just bought a new Subaru Outback. Nice car. But on the way home, we found after stopping at a store that the hand unlock on the drivers door didn’t work. Yes the passenger side did. And yes she could dig in her purse for the fob. But still, a small inconvenience. That was a Saturday. Now Monday she takes it to the dealer. Humm no openings for 9 days to get it in. This is brand new. Why? So appt time, drops it off. Calls the next few day to find that the dealership has no clue. It’s never happened before. It’s still there by the way waiting for a module that was bad. It’s now going on 3 weeks and the mod is ordered.
    So my question is, can a dealership fix a problem with a car before they sell it and still be reimbursed by the factory. I want to know if they had to sell this car to me before they could actually fix it. Failed disclosure.

    • Amy Plemons 4 months ago

      Dealers get paid on warranty claims before the vehicle is sold. It’s not uncommon to discover a problem during the pre-delivery process when a vehicle arrives. It happens all the time in hope of delivering a perfect product. Sorry this happened.

      Jerry Reynolds, President
      Car Pro Radio Network

  4. Alex 4 months ago

    I bought a new Honda and noticed there were rust on the wheel hub on both front sides. It appears the protective grey paint has worn off prematurely and allowed to rust on the lot. Other vehicles of the same model and even older ones dont have this problem. Seeing as this was a defect on a new car. I took it to a dealer and they said it was normal and did nothing. Now I’m stuck with a ugly rust on a new car that should not have been there. Is there anything I can do? Thanks.

    • Amy Plemons 4 months ago

      I would take it to another Honda dealer to see if they agree, and if they do, I would contact Honda directly. Doesn’t seem right to me at all. I hope you can get it resolved!

      Jerry Reynolds, President
      Car Pro Radio Network

  5. Michael 2 months ago

    I bought a new 2018 pickup dec 2017 it sat in my yard for a couple of weeks till got a bed on it. On jan 11 with 312 miles it quit running and wouldn’t start hauled to dealership they couldn’t get to start either turns out it had to bad injectors that were stuck open and washed the cylinder walls down they replaced two injectors and one piston. Now its july 2018 the engine seized up same two injectors, one cylinder is egg shaped the other the piston is froze solid. The engine is an inline six with a common rail fuel system and the vehicle now has 15,000 miles on it the manufacturer is not wanting to fix it and the dealership is whining that they just got paid for the first repairs. I am a farmer rancher and use it for work, in january they offered to loan me a car which I said no to because it was of no use to me. Now I am moving cows and hauling hay they will give me a pickup to use but not one that will serve my purpose which they know and also more than likely offered because I told them what I needed manufacturer will pay $40 a day to rent a rig but that wouldn’t come close to covering cost of vehicle rental and I am told it could take several weeks before they decide what to do with vehicle as far as to repair or not dealer claims manufacturer has indicated that there inclined not to. Was just told yesterday by dealer service manager that the first time it broke down when manufacturer tore into the injector that it had a piece of aluminum in it that cause it to seize up now numbers 3 and 6 have done the same thing not sure cause yet this time. Manufacturer asked about fuel where I purchase fuel, first time it was still on tank full that dealer put in it, this time dealer says he has jar of fuel on his desk and its as clear as can be even after sitting there for a week. The first time it was a dealer for 28 days 20 business days. This time its been a week and manufacturer person I talked to says it will be another couple of weeks more than likely before they decide what to do another week to get engine if they decide to repair and another week to put in, and in the meantime I make payments don’t have use of the rig and am bartering renting and borrowing ones to haul livestock and hay.

    • Car Pro 2 months ago

      Hi Michael, what’s the make and model of the 2018 truck and is it a diesel?

  6. Lisa 2 months ago

    I bought my car at Kia, 6 yrs ago.. I had to replace all cylinders in it after a week.. ok dealership pd to fix it… On my 6 the yr, my car only has 59,800. Miles on it.. they said tj that couldn’t really figure out what the problem was they spent 4 hours trying to figure it out and went ahead and put a coil engine coil on it without even coming out and telling me and it told me on the phone it was under warranty and when I get there they give me a bill for $372?

    • Car Pro 2 months ago

      Not sure what to tell you on this one. I would talk to the service manager at the dealership to see why you were charged. I just can’t tell you.

      Jerry Reynolds, President
      Car Pro Radio Network

  7. Fabiola 4 weeks ago

    I bought a Hyundia veloster 2015 and not even a year the car start given me problems with the engine. To make story short I dont remember how many time I took the car to the dealer under the manufactured warranty and they change the engine. I just had the car back almost two months and again the car start smoking and it stop on me . there was oil everywhere. Now the dealer its telling me that its the engine again. That apparently I hit something and the oil filter come out. Really I didnt hit anything and Now they dont want to cover it. I told them that probably they didn’t put it right. Now what should I do.

    • Car Pro 4 weeks ago

      I would contact Hyundai (not the dealer) for them to investigate. If indeed it was caused by something you hit, and may not have realized it, your insurance should cover it.

      Jerry Reynolds, President
      Car Pro Radio Network

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