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State laws pertaining to the specific methodology for calculating the actual retail markup percentages to be used for warranty parts reimbursement and labor rates to be used for warranty labor reimbursement have been in effect for over 20 years now. In most cases, warranty parts reimbursement requests are being accepted.

Below are some of the most asked questions pertaining to the warranty parts reimbursement and labor rates.

What is a Warranty Reimbursement Analysis?

A review of retail parts markup for submission to the factory to increase the warranty reimbursement rate to a level equal to the customer pay rate. A complete sample is completed for submission along with all documentation required by the manufacturer.

How Can I Be Compliant in Terms of Warranty Policy?

By having the warranty claims processing reviewed to reduce chargebacks and maximize an efficient procedure for warranty claim filing.

Does My Dealership Qualify?

Yes – all do! Contact Withum’s Dealership Services Team to discuss these qualifications.

How Can I as a Dealer Best Ensure My Case is Accepted?

Many manufacturers have specific worksheets or work papers that have to be filled out precisely for labor rates.

Should I Fear Submitting a Request?

Some dealerships are still reluctant to submit a request, fearing an audit or other repercussions from their manufacturer. You should always have your warranty system and procedures in proper form. We have not yet seen increased audit action on dealerships that have applied.

How Often Can I Submit?

For both parts and labor, most states allow at least an annual submission.

What Else Can I Do?

The completed sample is also an excellent training tool. If certain repair orders are marked up lower, investigate why your parts department is not getting the markup they should be. Discounting and policy work for labor rates often come as a surprise to the dealer. It is a great opportunity to see your parts and labor pricing in action.

 

Staying ahead of the factory audit is always advised. We provide training and procedure review to reduce the risk of chargebacks by the manufacturer. Withum is also available for warranty audit appeals and negotiations with the manufacturer.

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