When dealers perform warranty work they are allowed to charge their costs back to the auto manufacturers, and some dealers take advantage of this by charging wildly inflated rates for their labor.
Currently Wisconsin law allows the manufacturers to recover these exorbitant costs from dealers who overcharge them, according to fair and standard business practice between two parties who have a contractual dispute. This recovery process has been upheld in the courts.
But these bills put the state in the middle of these business relationships by prohibiting the ability of automakers to recover those overcharges. No other state has combination of laws on higher labor costs and cost recoupment.
I guess I would say generally they should stay out of it and let the two parties work it out. Seems like more government over-reach which also is starting in Minnesota. I’m not going to say never because I generally agree with the usury laws to limit interest rate charges from those close to what the mob would charge. But that is consumer law. Business law is pretty much well established and should simply be applied not re-written. I’m not sure how that would impact consumer repairs though. Seems like a separate deal. I’d rather see them do something about robo calls.
How much say do the manufacturers have in these transactions? Do they dictate a maximum time allotted for the repairs? If so, does it include diagnostics to verify the problem? I’m not on either end of the business, and wonder why the dealers do this. Sure, we can explain it away as greedy dealers, but there might be more to it than that.
Professionals have previously posted, if I remember correctly, warranty repairs are pretty stingy on the book hours. Maybe this is just on recall repairs, not everyday warranty repairs. If the manufacturer doesn’t pay for diagnostic time to figure out these more and more complicated cars, that comes right out of the tech’s pocket but also affects the dealer’s bottom line.
Seems unneccesary. Manufacturers can sue or cancel the dealer’s franchise.
There have been many threads on this topic here, especially from the perspective of the technician who does the work being stiffed out of his pay because the employer isn’t making any/enough profit on the job. THAT is what should be illegal–and should be aggressively prosecuted by state and federal labor agencies. Wage theft is a serious matter, and whatever contract might exist between the manufacturer and the dealership principal should not be the hourly employee’s problem.
I don’t get where this wildly inflated labor charges come from. Just speaking from my experience as a mechanic and shop foreman along with now and then being a warranty claim bailer outer I have to disagree. Warranty works like this.
Assume a 1 hour customer pay job with the part having a dealer cost of 60 dollars + 50% markup. The dealer has a door rate of 100 per hour. That means the customer will end up paying say 190 for the repair.
Under warranty everything is slashed and the dealer has no say in it. The door rate will be cut to say 80 dollars, The part will be limited to dealer cost + 25%. The labor time will likely be cut to .3 hours (or 18 minutes). This means the total amount the dealer will be reimbursed under warranty would be 24 dollars in labor + 75 for the part for a total of 99 dollars. Huge difference.
Many times mechanics are coerced into doing repairs that SHOULD be customer pay but the spinless dealers don’t want to irritate the customer by telling them this so ergo; the mechanic gets hosed.
I read a story written by some guy many years ago who claimed that under warranty if a job takes far longer than warranty pays for then they simply make a claim for more time. Not. It doesn’t work that way at all.
From my experience I’ve seen pre-autnorizations for extra time but when the claim is filed that pre-authorization never happens. Again, mechanic gets hosed.
In addition to being a mechanic/shop manager I am also an arbitrator. I conduct hearings and decide cases in new car warranty disputes between the customer and the car manufacturer. As such I sometimes see internal paperwork regarding repairs done to a car under manufacturer warranty, in some cases seeing what the car maker pays the dealer to correct a factory defect.
I’ve arbitrated warranty concerns on a Jeep where FCA will pay the dealer $33 to diagnose an intermittent stalling condition. I’ve seen GM pay a dealership .3 hours to diagnose a check engine light. For a flat-rate technician at the dealer making $30/hr that translates to less than $10 to diagnose the car. As a diagnostic man myself, I can tell you I wouldn’t open the hood for $10, much less check anything out. It’s no wonder so many issues are left unresolved with the tech noting “unable to duplicate complaint” and then moving on to better paying work.
Labor times are also significantly lower for warranty pay jobs. Here at our independent shop we have a 2015 Silverado waiting for complete engine replacement. Labor time for long block is 19.8 hours, warranty time at the dealer is 14.0 hours. There is some justification for lower warranty times because the vehicle will still be new, clean and not rusted and altered. But in general warranty pay is significantly lower, not higher, so I’m not sure what the Wisconsin lawsuit is about.
Not only is the pay less, but the quality of work is often designed just to get the car out of the warranty period. I arbitrated a case for a Ram 1500 with a Hemi V8 engine. The complaint was valvetrain noise. The technician was directed to determine which lifter was noisy, then remove only the one cylinder head needed and replace only the noisy lifters for that side of the engine. FCA also directed the tech to save and reuse the engine coolant. I don’t think any of the mechanics here on this board consider that a proper repair.
Vehicle manufactures set the labor rate for auto dealers based on labor rates in each district or city, it is generally about 80% of the retail amount.
The author of that article is a shill for the manufactures.
Wisconsin State Bill 304 is aimed at protecting dealers from forms of retaliation from vehicle manufactures such as;
“a. Increasing a price charged for services or goods.
b. Assessing a penalty, fee, or surcharge.
c. Withholding, reducing, or delaying an incentive or other payment.
d. Transferring or shifting costs.
e. Limiting allocations of vehicles or parts.
f. Failing to act in good faith.
g. Failing to make timely payment of compensation.
h. Establishing or applying a discriminatory standard.”
Dollars is dollars, the Dollar sign does not show up, even after quotes I would consider reusing the coolant dependent on miles and age, “ is ”. Dollars is dollars, the dollar sign does not show up, tried quotes, must be too old for this internet stuff! It shows up in the edit screen, @cdaquila
Even if I was paying “full sticker” for the repair, I would NOT be okay with draining and reusing ANY fluid–be it coolant, engine oil, transmission fluid, power steering fluid, etc. Nor would I be okay with removing and reinstalling any consumable parts that are not in “like new” condition. I certainly would not be okay with such penny pinching if the car was under warranty, though I very seriously doubt I will ever own anything new enough to have a warranty ever again.
When my 2004 Toyota Corolla was still under warranty, it was at the dealer for routine maintenance, and the technician discovered that the water pump was leaking a small amount of coolant through the weep hole. Not only was the water pump and gasket replaced at no cost to me, but they put new coolant and even a new serpentine belt. This idea of reusing coolant speaks volumes about how much Fiat-Chrysler cares about the customer, which apparently isn’t very much once the car is sold.
I would never reuse engine coolant; or any other fluid or lubricant.
I’ve had people question me about why an oil change was figured into a head gasket replacement estimate. For those that balked I just said fine; take it elsewhere where they won’t do this.
The policy of collecting and reusing coolant has been in place during the last four owners of Chrysler Corp.
If your business is frequently working on 10 year old vehicles you don’t reuse coolant. If a tech needs to drain the coolant on a 6 month old vehicle to perform a recall repair or replace an alternator the coolant is to be reused.
The technician has discretion on this, if the coolant is dirty or diluted the coolant should be replaced.
And that coolant, or any other drained fluid set to be reused, can easily get contaminated depending on what container it is drained into, how clean the container, how well covered the container, etc. Paying for fresh fluid or oil is a lot less expensive than risking trashing an engine.
Also, it seems to me that any part of a car system needing a repair that requires draining fluid is apt to have been misperforming in a way that already has likely contaminated or otherwise compromised the integrity of the fluid. I may be wrong about that but it just seems a real possibility.
@Nevada_545 When doing it yourself you know you are using clean containers. I’m merely wondering as a non-mechanic, non-DIYer about what seems a possibility to me in situations where I have no knowledge of how a repair is being done while I the customer wait elsewhere until time to pay the bill, hope all was fixed well, and drive off in my buggy until next time.
Like I said, I may be in error. I’m certainly not criticizing your viewpoint and I apologize if it came across that way.
