Independants and Warranty work


#1

Recent legislation that would force manufactures to allow and pay independants to perform all types of warranty repair. Are independants willing to tool up (why should they not have to have all essential tools just like a Dealer)? and are they willing to train their people in each model (new model familarization is a requirement by some manufactures for a tech to be allowed to work).



Many Dealers look at their service departments as a necesary bit of overhead required to be allowed to sell cars. I have heard rumors that some make money from their service department,but not all.

Will the Indy’s be willing to work for what the manufacture pays? Many techs leave the Dealer due to warranty hassels now they will follow them to the Independant garage.

The point of the legislation is to give the consumer a choice. I ask what Indy would sigh up for the program considering what it would cost to be qualified for warranty work?

I think this is a case of be careful for what you wish for you may get it.

Source for story was a Sunday interview with a Congressman on Fox News.


#2

As long as the independent shops are willing to pay for the tools and training I don’t see a problem with it. I do think that shops should have to meet certain criteria by the automakers to be licensed for warranty repairs.


#3

It seems to me that the situation would have to be right. If an Indy specialized in a brand or class of cars, it might make sense. From what I’ve heard here and elsewhere, the pay for warranty work is not good. It’s the Medicare of the car world, I guess.

Another possibility is if there are no dealers close by. This might be the case in a rural area where there used to be a dealer, but they closed down. For the majority of drivers, this does not make sense, since they live in metropolitan areas.

And just because it is allowed, does not make it mandatory for an Indy to handle warranty work.

Lastly, the Indy would have to prove to the manufacturer that they can handle the work. It seems to me that dealer training would be mandatory. I don’t know if the legislation is law or not, but I hope it doesn’t allow anyone with a garage to do any warranty work. One could believe that Congress is capable of anything, no matter how stupid, after their behavior over the last 10 (20?, 20?, 40?) years.


#4

I agree with oldschool.

Case in point is NJ, where some years back, a bunch of private garage owners paid huge sums of money to install dynamometers and related emissions equipment, and had to go through a vetting procedure in order to be approved for emissions and safety testing. The idea was that, despite the fact that NJ’s state-run emissions/safety test is done free-of-charge at the state’s own facilities, many people would gladly pay $50 or so in order to avoid the frequently long lines at the state-run facilities.

Well, fast forward a year or two. Our then-governor, Christine Todd Whitman, privatized the state inspection/emissions process in order to gift a corporation with a multi-year contract to do all of the state’s motor vehicle inspection work. This was done under the guise of saving money for the state, but it wound up costing approximately twice as much money per car to have the state’s inspection stations run by a profit-making corporation.

Her Chief of Staff also left that post in order to take a very high level job with the company that won the inspection contract. (I’m sure that this is merely coincidental, and has nothing to do with bribery or anything else illegal or unethical)

The company that won was the only bidder, but of course, if you allow one company to secretly write the specs for the offer that is being put out to bid, it is difficult for any other companies to meet the terms of the contract precisely, and so her hand-chosen company was given the contract.

What does this have to do with your post? Well, shortly after the state’s inspection facilites were handed over to the new corporate people, the old dynamometer test was done away with, the annual inspections became semi-annual on older cars, and only had to be done on new cars after 5 years of use. The net effect was that long lines no longer existed at the state facilities, few people wanted to pay money to the private garages for inspection, the now-useless dynamometer emissions test equipment still had to be paid for, and many private garage owners went broke in the process. Nice huh?

Incidentally, Ms. Whitman later went on to further fame as the US EPA Administrator who told residents of lower Manhattan and 9/11 rescue people that it was perfectly safe to breathe the air in lower Manhattan in the aftermath of 9/11. Many people died of respiratory ailments as a result of her false statements, and the State of NJ can trace about 80% of its current fiscal problems to her administration, so she has left quite a legacy.

I would suggest that shop owners go very slowly on deciding to make any new investments in equipment for warranty-related repairs, as that could prove to be a big waste of money, based on what I have observed in my state.

Am I a cynic? You bet I am!


#5

Many Dealers look at their service departments as a necesary bit of overhead required to be allowed to sell cars. I have heard rumors that some make money from their service department,but not all.

I doubt if you can find a dealer who does not make money from there service department, but the warranty work they do is likely not a big profit area.

The dealer is going to be looking at maybe loosing some bother with the warranty work, but they also will be loosing a good chunk of their non-warranty work as a result and that non-warranty work is a money maker for them.


#6

A policy like this would be opening up the largest can of worms that has ever existed.

Performing warranty work at a dealer is a money-losing proposition (not even counting the cost of special tools, training, printed matter, etc.) and an independent shop would have to be insane to even consider something like this.

One of my favorite examples is the COMPLETE resealing of a leaking Subaru A/C system. Does anyone think that an independent shop would be willing to do this job for .2 of an hour (12 minutes)?
Or that a shop will be willing to accept .5 an hour MAXIMUM as total reimbursement for the tracing and repair of any electrical problem no matter how complicated and time consuming it is?

This would be the ultimate boondoggle of all time.


#7

I don’t see a problem with the independents at all. Most already have the tools to do the warranty work since they already have the tools to do the repair work. The way you’re saying this…it sounds like you don’t think independents have the ability to work on ANY car…only the dealers have this knowledge. I found that MOST good independents are BETTER then dealer mechanics.

I’ve YET to meet the dealer that doesn’t make a LOT of money in their service bays. In fact a LOT of money.


#8

I think you’re wrong on several counts and let’s start with the warranty end of things. Warranty is a losing proposition; period. Labor rates are much lower, labor times are horribly underfigured, and getting reimbursed at all is like wrestling with a greased pig in a mud hole.
My opinion is based on the fact that I’ve had to wrestle countless warranty repairs as a tech and had to wrestle them as a shop foreman.
Dealers frequently get stuck on denied warranty claims no matter how legitimate the complaint was or how proper the repair.

A tech spends 4 hours on an electrical problem. The maximum the shop and the tech is going to get is half an hour and that’s at a discounted labor rate. How is that profitable for anyone at the repair facility? It’s not.

You state most independents have the tools to do the warranty work. Not quite. There’s an astronomical amount of tools, expensive and special ones, required to do many warranty jobs and if an independent is going to perform factory warranty work they’re going to need a small storage building to house all of this stuff. Not to mention that an independent shop is then going to have to hire a warranty clerk and provide space for that. Yet more expense.
Doubt me? Find a long time VW dealer, drop by, and ask if they can show you their “Unit Room” where special factory tools are housed.
(As an example of special tools (and try to find one at Sears or on the Snap-On truck) what about a differential case stretcher? Good luck on that one)

The bottom line is that no independent shop or mechanic is going to want their tech spending 3 hours on a job for a 1 hour reimbursement; and that’s if they’re lucky and even get an hour.
Even parts can be a losing deal as the markup is strictly limited. A 20 dollar part at 25% means a 5 bucks BEFORE any bureaucratic warranty paper shuffling. Hardly conducive to profitability even on the parts end of things.

I mentioned the real world example of .2 hours to reseal an A/C system, and this means the entire shooting match. How many shops do you think will even consider doing this for 12 minutes of labor time? Only the dimwitted ones would.

No matter who manufactures it, every car that rolls off the line is assigned a warranty money figure by the bean counters. This is figured into the MSRP of the car when it is sold.
If labor rates, times, parts markups, or whatever is increased in an effort to encourage independents to perform warranty work, it is going to be paid for by one or more of the following methods.

  1. MSRP of the new car will increase dramatically.
  2. Car owners will get hit with a deductible.
  3. The “Feds will pay” extra to aid and abet this.
    (And No. 3 flat out sucks because “Feds” translates to taxpayers. Why should Person A pay taxes to repair the new car belonging to Person B across the street?)

#9

You state most independents have the tools to do the warranty work. Not quite. There’s an astronomical amount of tools, expensive and special ones, required to do many warranty jobs and if an independent is going to perform factory warranty work they’re going to need a small storage building to house all of this stuff.

That can’t possibly be true…If it was then independents couldn’t do any work on any car according to you. ALL work would have to be preformed at the dealer because the independent doesn’t have the equipment to do it.

I agree there are logistic things the independent will have to consider before doing any warranty work. And it may NOT be profitable for a small independent. MAYBE the system will change if the independents are part of the warranty process. I suspect it may be a nightmare though.

As for dealerships NOT making money…Well maybe NOT on warranty work…but their repair shops make a LOT of money. Back in the 90’s (or last recession) when car sales were way down…many dealers survived because of their repair shops. Sales were flat…but repair business was up keeping them afloat.


#10

IMHO the warranty work should only be coupled to dealers. Indy’s would have to add layers (service writer, manager, admin) between client-mechanic that would not always be utlized and in turn simply raise their attractive rates (main advantage).

Sorry I simply cannot believe any auto repair shop is money maker operation. I think dependent on how run, local population, and other factors they may or may not make money. They definitely provide a service and reasonable salaries(hopefully) to those involved.

I cannot understand why indy’s would want the exta burden of warranty work. Aftermarket warranties are enough of a nightmare for indy’s and dealers alike.

The profit in auto business is mainly used cars(no idea what dealer paid) and all the add-on packages and financing involved. The service is just a cost and attempt at profit and sustainability in the equation.


#11

Been there done that, and I’m not saying that an independent will not have the capability to perform any warranty repair. Only that there are many specialized factory tools involved in many warranty repairs and may be required. These tools are not available in the aftermarket and these tools are also not provided free of charge to the dealers, nor will they be provided free of charge to an independent. They have to pay for them, and pay dearly.
Dealers are also required to have things like alignment racks, wheel balancers, etc. so where is that going to come into play; both as to cost and the space to put them?
The factories are going to require training schools and all of these (schooling, motels, food, airfare, etc.) have to be paid for by the shop. It’s unlikely an independent would or could afford to do this unless they’re going to raise their labor rates through the roof, throw out the flat rate book, and resort to fraud to make ends meet.

Even the old warranty parts are a logitics headache because those parts cannot be simply scrapped. They must be catalogued and maintained for inspection by the factory rep before being considered for scrap. Again, more paperwork and space required along with that extra employee to stay on top of all of this.

I even disagree with you that independent shop mechanics are better than dealer mechanics. That all depends and they’re not all the same.
Have you ever considered the fact that many independent shop mechanics are dealer mechanics who have simply gotten tired of the dealer warranty rat race and moved on? A mechanic at the dealer is incompetent and is suddenly competent the next week after changing employment?

Warranty work is also one of the major reasons why many techs (including myself) get fed up to the eyebrows and cease working for dealers. It’s a time eating, money losing process at the dealer and it will be no different if an independent does it.

The only way warranty work will be profitable at all will be if the warranty books are thrown to the dumpster and real world flat rates are used.
This means the car owning public is going to pay dearly for it one way or the other; either through the MSRP of a new car, dumped on the taxpayers heads, labor rates/times are significantly raised on non-warranty repairs to offset the losing warranty ones, or there will be wholesale fraud going on.


#12

Only that there are many specialized factory tools involved in many warranty repairs and may be required

And I’m saying that those warranty repairs …when no longer under warranty are performed every day by independents all over the world.

I even disagree with you that independent shop mechanics are better than dealer mechanics. That all depends and they’re not all the same.

I NEVER SAID ALL OF THEM WERE. In many cases the Independents ARE FAR better. Nissan dealer near me has very high turn-over rate. Most of the mechanics are fresh-outs. I’ll take my car to a independent who’s been in business for 30+ years LONG before I take it to this dealer.

Warranty work is also one of the major reasons why many techs (including myself) get fed up to the eyebrows and cease working for dealers. It’s a time eating, money losing process at the dealer and it will be no different if an independent does it.

And I said…that may be true…It’s the politics of the problem. Has NOTHING to do with the mechanical ability of the independent. That’s also an EXCELLENT argument as to why you should use an independent. If all the good mechanics are leaving the dealerships then what do you have left???


#13

Mike its not that these special tools are needed to do the work its that the Dealer is required to have them wether they get used or not. I have seen special tools hang on a tool board for years and never even get touched but the manufacture says the Dealer must buy them.

Obviously a bad business model simply because it is wasteful (I don’t have the best business mind to figure out what changes need to be made in the Manufacture/Dealer relationship) but I can see having all this money tied up in special tools can’t be good.

The mandantory training aspect is good but I would like to see a eye kept on cost. We used to get sent away for school now most GM is online. BMW Dealers still send their guys away but also have a online component.

BMW for years had a program called “step-student”. Men would graduate well trained but 50K in debt. BMW has since stopped the program as their graduates were not finding jobs. No more promises of 100K jobs (which was common in the 90’s).

The business does float back and forth between who is supporting who, sales or service. What I do know is when sales wanted something (employees,renovations change in service departmrent hours or staffing) they got it. It was clear the sales dept was the top dog at the Dealership.


#14

Warranty work is also one of the major reasons why many techs (including myself) get fed up to the eyebrows and cease working for dealers. It’s a time eating, money losing process at the dealer and it will be no different if an independent does it.

Wasn’t it you who posted a story about a BMW tech who worked tons of overtime and literally tore a brand new 7 series down to the bare frame, rewired it, put it all back together, then was told the owner got another 7 series around the time he finished?
I still say that guy deserved that car he worked on after all that.


#15

I have an underlying faith in dealers for warranty work and specialized tools needed for a specific job. I have a friend who after an indy did $750 work and could not fix the problem said take it to the dealer. It was emissions related and he was doing his best to solve the problem but did not have the proper equipment to diagnose the problem and ended up being a $175 fix at the dealer. To me the dealer is a choice when specialized knowledge and tools prevent misdiagnosis or unnecessary repairs, Not meaning to put down the fine work and more reasonable prices of most independents but there are special problems of specific breeds so far better off at the dealer for repair.


#16

No, that wasn’t me that posted that story but I remember it very well and agree with you that the tech should have been given the car. That kind of thing is normal when it comes to warranty work but that one was about as extreme as it gets.
The techs gets screwed; the only question is how many turns are applied to the thumbscrews.

Mike, I agree with you to a point. Yes there are dealers with a few bad apples and there are some dealers that are staffed from front to back with incompetents.
The local Ford dealer here is great for example. The local GMC/Jeep dealer is near worthless. I just don’t think they should all be painted with the same brush.

Independents have their fair share of incompetents and flat out crooks no doubt about it. One thing that reflects more on a dealer is the type of customer involved.
With an ind. shop there are no warranty hassles, new car whines, nitpicking, etc.
With a dealer, the serv. dept. has to face many complaints from people who decide a month after the purchase they don’t like the car they’re on the hook for and will simply pick it to death. At times they will threaten to quit making payments on it. (Heard that more than a few times and generally the pricier the car, the louder the whining.)

(Example. Woman buys a new full size GMC custom van for in-town driving. After a week she brought it back in picking this vehicle to death with 3 pages of repair order complaints. Two were justifiable; the rest were not. She discovered this tank was a handful in tight city driving and wanted out of the loan. The dealer was advised to buy it back by the service manager. The dealer refused and the lady was protesting on the sidewalk the next morning at 7 a.m. with a giant sandwich board claiming they sold her a Lemon and the serv. dept. were crooks.)
The radio knobs squeak? Please.

Anyhoo, forget the tools, training, bureaucracy, or a huge question such as; how does an independent handle or stock parts? It boils down to the fact that no sane ind. shop or tech would want to have their labor cut by 75% or more.
If the independents are paid full non-warranty labor rates then someone is going to have to pay for that difference. It’s going to be the consumer (directly or indirectly) or the taxpayers if the Feds get involved in this. Either option sucks; especially the latter.