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Old 02-23-2016, 07:53 AM   #1
bbdrew
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Default Warranty Parts at Retail rate

I'm wondering if anyone lives in one of the 40 states that current legislation allows dealers to submit warranty parts reimbursements at retail rates and if anyone has went through the process? Please share any and all information about the process?
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Old 02-24-2016, 11:12 AM   #2
XDCX
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While I don't have any direct information to offer I wanted to make sure that you saw this thread - click here

The impression I get is the OEMs try to make the process of applying for warranty payment at retail rates seem more difficult than it really is.

It would be interesting to know what percentage of dealers who operate in states with laws requiring retail rates for warranty reimbursement actually receive the higher payments? I'm betting that a fair percentage of dealers don't want to raise the issue with their OEM and see it as another form of "franchise insurance."
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Old 02-25-2016, 08:46 AM   #3
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thank you so much for the link to the previous thread. I don't think our specific state (TN) has passed anything yet, but this is helpful information.
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Old 02-25-2016, 11:50 AM   #4
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TN does have Warranty at retail BUT, nobody wants to be the 1st to dare GM to get it. You have to submit 200 CP RO's, and wait for GM to approve it.

This MIGHT need to go to Section...

I was told that anyone who has started this procedure has been hit with an immediate warranty audit and tool audit, and has quickly backed off.
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Old 02-25-2016, 03:18 PM   #5
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As I type this out our dealership is in the process of filing the paper work to do just this through a company called Armada Dealer Solutions.

Our owner evidently has been shown enough to make him want to do forward with this. I sure hope it doesn't bite us in the rear when we actually need assistance from the MFG.
I will write more when I know more.

One of my big fears is an audit, or consistently returning warranty parts to the MFG.
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Old 03-03-2016, 01:04 PM   #6
Deniset
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Most of the dealers who implement the process, after all the legalities and permissions, have also seen an increase in fees/expenses for their incoming new vehicles. This more than offsets the increase in parts profit gained in charging retail for warranty parts.
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Old 03-04-2016, 10:34 AM   #7
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Quote:
Originally Posted by Deniset View Post
Most of the dealers who implement the process, after all the legalities and permissions, have also seen an increase in fees/expenses for their incoming new vehicles. This more than offsets the increase in parts profit gained in charging retail for warranty parts.
Thanks for the post - interesting information.

I recall reading a story in Automotive News years ago where one of the OEMs, I think it was Ford, added a line item surcharge to the invoice of the vehicles it shipped to dealers who were getting paid a retail rate for warranty parts.

As I recall the Dealers were frustrated because the charge didn't appear on the Monroney so it came out of their margin.

I would have guessed that OEMs were no longer adding fees or expenses against dealerships that were eligible for retail parts reimbursement - but I've been wrong before....
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Old 05-05-2016, 04:05 PM   #8
TORGY
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well we were just approved from Hyundai to sell at cost + 70.8% for warranty repairs starting next week.

Were still waiting for GM's approval.

I will post more about any ramifications that may come in the future.
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Old 06-28-2016, 08:35 AM   #9
TORGY
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ok we have been on a cost plus 70.8% markup with Hyundai for over a month and everything seems to be good so far.

Starting June 30th we will be at 72.95% warranty markup with GM......
we will see how that goes and keep you posted.
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Old 06-28-2016, 10:58 AM   #10
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we had a company by the name of Armada (410-914-5737) do most of the paperwork. I am not 100% sure of what the fees all entail but I do think there was an initial fee of about $4000 plus a certain percentage for a year.

we not only got the warranty parts markup, but they also got us a warranty labor rate increase.

by the way you will have to pull customer pay work orders and submit them.
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Old 06-28-2016, 12:11 PM   #11
TORGY
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it looks like our submission fee through Armada was $4500 and then they collect 10% of our "uplift" in warranty mark ups on both the labor and parts. estimated for our dealership with 2 mfg lines is $1000 per month.
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Old 06-29-2016, 04:29 PM   #12
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Well on of our manufactures reps was in today and we asked her about any ramifications that we may be seeing in the future from going onto. It sounds like after a year there will be audits on RO's and parts invoices to make sure that our EFL rate, and parts markups over the counter are reflecting the markups that we are selling to them at. If not, we will be debited back the avg difference all the way back to when we started the new markups. Plus it sounds like the dealership could and probably will be will be surcharged $300-$400 on every vehicle that they order.

it could get ugly!!!!!

But i did warn the dealer before he decided to move forward with this that there could be consequences.
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Old 07-11-2016, 02:06 PM   #13
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Wow, that is nasty. I thought that included in the legislation that is passed by most states they included that no manufacture could retaliate against dealers that go for warranty at retail.
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Old 07-11-2016, 04:43 PM   #14
57years
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Well, "you say "Po-TAE-to" and I say Po-TAA-to"!

Manufacturers do not retaliate...they just get "ahead"...never even!

The rectal exam does not end today...it is just postponed until the next "visit"!
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Old 07-12-2016, 12:46 PM   #15
bbdrew
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Quote:
Originally Posted by 57years View Post
Well, "you say "Po-TAE-to" and I say Po-TAA-to"!

Manufacturers do not retaliate...they just get "ahead"...never even!

The rectal exam does not end today...it is just postponed until the next "visit"!
LOL, I thought about that after I posted it, you can always classify the audits as manufacturers making sure that the % they are paying is the retail % you are averaging. However, I would think any case brought to a Judge they would find that charging an additional fee on every vehicle allocated to the dealer would constitute retaliation, but do dealers really want to fight that battle with the manufactures and their team of lawyers.
I know when I brought it up, my owners ear perked up at the chance to get more from the manufacturer, but when I explained that audits and additional "fees" normally followed he was not interested in pursuing it.
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