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01-31-2013, 06:28 PM | #1 |
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Used Car Warranties?
Hi, I'm new to the site.
I have a small used car lot in Pennsylvania that I run with my wife. We opened a few months ago and have been using a warranty company that I had believed in for the most part. Well, recently a customer had a problem with a car they bought from us and, as it turns out, the warranty is not all that it had seemed it would be. To make things right, I ate the cost of the repairs and lost my butt on that car when all was said and done. Long story short, I am somewhat disappointed with our current warranty company. I am searching for a new one that is a little more dependable and realistic. Does anyone have anything good to say about any of these warranty companies? I am open to suggestions. EDIT- Oh man....what a first impression...."Warrnaties"....LOL. Any mod that wants to edit the title, have at it! Last edited by XDCX; 01-31-2013 at 06:58 PM. Reason: Corrected typo in the title |
01-31-2013, 06:57 PM | #2 | |
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On a different note, Welcome to DealershipForum. I'm a bit pressed for time at the moment but hopefully some of our other members will share their thoughts about the various service contact companies that are available to independent dealers. |
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01-31-2013, 06:59 PM | #3 |
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Thanks for taking care of that for me.
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02-01-2013, 06:15 AM | #4 |
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Welcome to the Forum, lots of great people here.
What level of car are you selling? High end, middle or low. What is your volume of cars sold per month? How many in stock? Average gross profit per car? Do you do any of your own work on sold cars? / Have a shop you work with? Does your state require a certain warranty on used cars? These questions will help us give you better advice. Don't worry about spellin' we all have a sence of humor here...well most of us do. |
02-01-2013, 06:55 AM | #5 |
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Level of car....pretty much low. I am filling a niche here where I am trying to keep my cars around 3 to 4K.
I can't even begin to tell you the volume. After jumping through all the hoops with the state, I finally opened my doors during the dead season in early November. I've managed to sell 8 cars since then. I hear it picks up in another month....I hope. Stock I try to keep 12-15 sitting here. All my profit has been gross...so far. lol. I do the work that I can. I was a tech for years so some of it isn't that hard. Other than that, I am set up with local shops that do the harder work for me. For the state, I can sell as-is. I just choose to include a warranty as a selling point. I was also hoping that if anything major happened to a car, I could wash my hands of it since a warranty was in place. As I mentioned in my first post....that wasn't the case with this particular unit so I am trying to do the right thing and I'm eating it even though she had the car for about 6 weeks. |
02-01-2013, 08:27 AM | #6 |
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Are you referring to wanting a warranty or service contract? BIG difference. You cannot charge customer for warranty nor use it as part of negotiation. Service contracts, on the other hand can be thrown in, negotiated, etc.
Be sure to check whatever plans you sell, who the contract is between. If it is between the customer and the s/company you have no liability. But if the contract is between you and s/c company you are on hook if s/c company goes belly up. Chrysler Service Contracts were always between them and customer. I have no affiliation with any s/c company but Zurich is the best in our area. US warranty isn't bad either but be careful...there are 2 similar US Warranty companies with 1 definitely better than the other. These companies cost more than some of the other companies but you get what you pay for. Like any insurance company you never know how good the product is until you or the customer need it. Last edited by chryslersrt8; 02-01-2013 at 08:29 AM. Reason: Proofreading |
02-01-2013, 08:35 AM | #7 |
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Well, I am hesitant to mention the name of the company I am using but yes, they are a service contract company.
The agreement is between the customer and the company but in this case, since I am fairly new, I felt bad and don't want to be branded like some of the other dealers around here....so that is why I am covering the repair cost that this garbage service company is not covering. |
02-01-2013, 09:15 AM | #8 |
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Does your company require that you put the S/C on every car you sell or do you get to choose? How long is the S/C for or how long do you want to guarantee the cars? Usually the lower price/class the cars are the price of even a short contract can get expensive. How much are you paying for yours now? I am headed somewhere with all these questions. The other thing to be careful of is, once you fix something make sure that the customer sign something that they understand it is a "GOODWILL FIX" not a statement of guarantee.
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02-01-2013, 09:36 AM | #9 |
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I get to choose whether or not I can use the SC. I like to include the 3 month/4,500 mile powertrain warranty on what I sell but I am seeing that it doesn't do as good as I had been led to believe. Better than nothing I suppose but really poor if you ask me. I pay $99 for the contract and they do have upselling but I haven't done that yet.
Thank you for your last note there. I am paying for this problem to be fixed and I was wondering how long they would hold it over my head. Good point you make and I will look to get something like that written up. |
02-01-2013, 05:10 PM | #10 |
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PA, be sure you get an aknoledgement of goodwill repair signed, otherwise the free work you did can be construed as an implied warranty and you can be on the hook for as long as they own the vehicle. Send me a PM and I will send you a copy of what we use. Look at AUL for your warranty. We have used them some and they are decent, and they will write for independents.
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02-04-2013, 09:42 AM | #11 | |
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Unless you're convinced the warranty coverage is helping you sell cars you otherwise wouldn't I'd be inclined to sell your cars "AS-IS." Given your price point I think many customers are more concerned about financing options then they are warranty coverage. |
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02-04-2013, 09:45 AM | #12 | |
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In the category of "No Good Deed goes unpunished" I've heard of the exact scenario you mentioned. |
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02-04-2013, 09:56 AM | #13 | |
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I think I could have accepted it better if they had tried to claim this was a pre-exisiting condition but they didn't. It was a covered failure but payout was not even close to what was needed. Another problem I had is that the local regional rep couldn't even be bothered to answer me or return my calls. Customer service? What's that? Anyway, I am working on a few others to use...checking them out for pricing and limitations. I have learned from this and will move forward. |
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02-05-2013, 08:51 AM | #14 | |
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We had another thread on the forum about the continued failure of the 2.7 liter V6 in many Chrysler vehicles and one of our members commented that the Service Contract company his dealership uses forces them to use junkyard parts without any mark-up for the Parts Department. Here's a link to that thread - click here (My point is I think a lot of Service Contract companies try to limit their claims expense by performing the least expensive repair possible.) If you're convinced the warranty coverage is helping you sell cars have you thought about "self-insuring" the coverage? I worked for a Dealer who self-insured his own 3/3 Warranties and over the long haul it was about the same expense as working with a Service Contract company but the Dealer felt he had more control over the process. (This may not be a good option for you if you're just starting out and you're trying to limit your risk.) |
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02-14-2013, 08:34 AM | #15 |
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Sorry for the long delay in getting back here....it has actually been fairly busy around here suddenly.
The main reason I include a service contract is not necessarily to help sell cars (although I noticed that it did make a difference in a few cases) but rather to cover myself if something goes wrong. Sure, I can sell "As-Is" and wipe my hands of the whole thing when something goes wrong but then....then I am no better than that guy down the road from me that sells junk and doesn't stand behind it. I prefer to cover my cars against failure for a little while anyway. It's about making people happy. Small town, big talk...you know? |
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