Effectively Managing Warranty Reimbursements
Effectively Managing Warranty Reimbursements
Warranty reimbursements are a time-consuming and complicated process that requires extensive experience and legal knowledge to make it successful. Often, dealerships leave hundreds of thousands of dollars on the table annually with ineffective or mismanaged warranty reimbursements.
“There are no excuses for not obtaining this revenue,” Leonard A. Bellavia, Esq. Founding Partner at Bellavia Blatt, said. “The factory should not be in control of your warranty markup; you should be. The difference in receiving what the manufacturer thinks you are entitled to and the optimum markup you may receive can make a significant difference to your dealership’s financial viability and continued growth.”
Financial Implications
Missing out on warranty reimbursements may leave you empty handed.
“The global auto extended warranty market size was valued at $34.19 billion in 2020,” states Allied Market Research, and is “forecasted to reach $60.82 billion by 2030.”
Filing claims as soon as they have been completed prevents you from incurring financial loss. However, the process is not as straightforward as it might seem. All 50 states now require reimbursement at retail. Also, some states allow manufacturers to adjust the retail warranty reimbursement rates, allowing you to reduce the rate for certain repairs, while others do not.
Hurdles Involved
Dealer warranty reimbursement can be tricky. Understanding warranty reimbursement at retail rates and claims warranty processing when dealing with the manufacturer is not a skill that most people possess.
If you are going to try to do the work yourself, then you need to fully understand the laws pertaining to warranty reimbursement. Odds are you would have to get some help from a lawyer or CPA. So, it makes more sense to hire a company to handle the warranty claims processing in its entirety rather than trying to piecemeal work together.
Warranty Reimbursement Assistance
Make the most of your time, leave the retail warranty reimbursement to professionals so that you can take care of your side of the business. Claims warranty processing is tedious and filled with intricacies that many business owners do not understand.
Thomas G. Wolf, CPA
Founding Partner
Bellavia Blatt, PC
516-873-3000