QB Business Solutions Explains Benefits of Warranty Reimbursement to Businesses
With many businesses in the dealership space struggling to recover from the economic ruins occasioned by COVID-19, receiving low reimbursements from manufacturers is the last thing you want to experience.
Low warranty reimbursement not only violates the law pertaining to warranty reimbursement, and can also take a serious toll on your profit. Dealers are entitled to retail warranty reimbursement by their manufacturer counterpart for warranty parts and a warranty labor rate increase.
What Is Warranty Reimbursement?
Warranty reimbursement refers to the total amount of money your automotive dealership receives to cover for customers’ repair on warranty parts. State laws in about 47 states allow for your dealership to be reimbursed by your manufacturer at retail rates, equal to a customer’s repair on warranty parts and labor.
Many large dealerships find it difficult to track products under warranty periods. As a result, such businesses rely on professional warranty management services like QB Business Solutions for smooth processing of claims. This professional approach not only eases the tracking process but also ensures that your dealership receives warranty reimbursement at retail rates.
What Are The Laws Pertaining To Warranty Reimbursement?
For decades, payment on warranty work has remained a point of debate in the dealer-manufacturer relationship. Around the country, legislative changes are being made to protect dealers as some manufacturers have been accused of deliberately shortchanging their dealers. Today, approximately forty seven states have enacted laws mandating manufacturers to reimburse dealers for their warranty-related labor and parts at the same rate that the dealership charges for retail repair work.
What Are The Challenges Facing Warranty Claim?
Despite legislation in several states entitling auto dealers to retail reimbursement for warranty repairs, the process is nothing close to simple. Many manufacturers set their own standards and processes that dictate how dealerships must demonstrate retail rates as well as the required timelines. It’s even more challenging in cases where there are limited resources dedicated to the task.
For some dealers, they have not yet exercised their right to retail parts markup and labor reimbursement because they are unaware of their state law pertaining to warranty reimbursement. In situations where dealerships are aware of the law, they seem to be reluctant to submit a request. They fear an audit or other consequences from their manufacturer.
Increasing your Warranty Reimbursement
Increasing your dealer warranty gross profit requires familiarizing yourself with state law, following the manufacturer’s protocol ‘To A T’, and removing objections that may arise during auditing. This can be challenging, especially where there are inadequate resources, time, and expertise for such an undertaking.
This is why you need a professional warranty reimbursement processing company like QB Business Solutions. QB Business Solutions can help you prepare and submit the reimbursement application to your manufacturers, ensuring that your submission complies with relevant standards.
Want to learn more about QB Business Solutions? call: 1-800-970-4701.
