If you’re a dealership owner or manager, you’ve likely wondered if you should try to pursue Dealer Warranty Reimbursement. You may be focused on generating revenue immediately, having a tight hold on your spending, or simply not having time to submit the request. But these concerns shouldn’t be a deal-breaker. If you’re unsure whether to pursue retail or Warranty Parts Reimbursement, read on to learn how to make the process as painless as possible.
Generally, Warranty Reimbursement Rate are determined based on the parts and labor a dealer sells and receives from customers. Dealerships must submit 100 customer-pay repair orders in 90 days before the reimbursement rate becomes effective, and routine maintenance repairs are excluded from the calculation. After submitting 100 customer-pay repair orders, a dealer can apply for a higher labor rate for the following year. These new rates become effective 30 days after the submission, but they are only valid for a year.
A dealership’s rights under warranty reimbursement have long been at issue in the US. Although most manufacturers recognize the dealer’s right to claim warranty parts and labor, a few have enacted policies that undermine this right. Fortunately, the new law outlines a clear path for dealerships to obtain full retail reimbursement for warranty parts and labor. This means dealerships can double or even triple their current warranty reimbursement revenue. It’s important to know how to file a claim correctly because a poorly submitted application can cost the dealership thousands of dollars.
While determining if you qualify for Retail Warranty Reimbursement, read the terms and conditions carefully before submitting a claim. In some cases, the warranty will cover shipping costs, but check before sending a product. If you don’t, there are ways to get reimbursement for shipping costs. Just remember to keep the paperwork organized. And make sure to submit your claim form accurately and on time.
While retailers might not be able to take advantage of stimulus grants and government loans, the pent-up demand should be tapped. After all, cars will be coming in for repairs, so dealerships should get ready now. They can take advantage of pent-up demand once the economy gets back up and repairs are rolling in. You’ll be glad you did. Your dealership will be well-prepared to meet demand once the economy starts picking up.
Because of the COVID-19 epidemic, many dealers have been left with no choice but to pursue other forms of revenue. Warranty Parts Reimbursement is a great opportunity for dealerships of all sizes to increase their gross profit from the warranty program. Dealers who take action to take advantage of the program can double their revenue. It is easy to make a difference, and it doesn’t require an upfront investment. However, if you don’t start today, you’ll be able to lose thousands of dollars annually.
While manufacturers have the right to adjust their retail warranty reimbursement rates, they have limited discretion to do so. To justify this, manufacturers look at other dealers’ retail warranty reimbursement rates. If the retail rate of one dealer is higher than the average rate of another, they can argue that it’s “unreasonably high.” However, this argument is purely legal if the manufacturer’s state statute prevents them from raising the retail rate. Get in touch with Warranty Part to get a warranty reimbursement offer.
Fortunately, this law imposes some changes for car dealerships. First, it makes it more difficult for manufacturers to impose excessive markups on their products. Dealers must pay the retailer a percentage of the price of parts based on the manufacturer’s retail labor rates. If these changes make your dealership more profitable, you should consider the legislation. The changes are intended to protect consumers and increase your dealership’s bottom line.
While most dealerships don’t charge a labor rate higher than the advertised retail labor rate, retail warranty reimbursement rates are equal to or slightly higher than those assigned to customers. Your dealership can profit at least $20,000 per month on labor alone, and these profits are enough to justify a full-time staff and cover expenses. This is how to maximize your profit margins! The key is to understand how retail warranty reimbursement works.
