Warranty Adjustments …the dirty truth

 

• How much money do you carry month over month on your warranty schedule ?
• How much is current and how much is aging……. fast ?
• What percentage of your claims are written off to policy, and who decides to what account(s) it goes to ?

These are the questions I have been asking dealers over the last 6 months and I’ve gotten a variety of answers from ” I’m not sure ” to ” not much “. In almost every case the office manager decides how to write it off and most often it is just split up between parts and service. And without fail, NOBODY wanted to talk about how much money it really was. That’s one of those ugly little secrets we don’t really like to acknowledge but I see it as a revenue stream going to waste. For every day your money sits uncollected it cost you money and for every dollar written off its actually 2 you’ve lost.