Nearly all states have legislation entitling dealers to be reimbursed at retail, but state statutes often are couched in the kind of legalese that make them nearly impenetrable to anyone who isn’t in the legal field. Also, the burden is put on the dealer to pursue entitled increases. With limited internal resources, undertaking this herculean task means taking the eye off the ball of other equally important operational needs.
Finally, it’s no secret automakers will do whatever possible to keep their warranty costs in check. To this end, they’ve created protocols and preferences that seem to change on a dime. Factory auditors also are all too ready to jump at the chance to rebut or deny submissions.
The list of automaker practices that are less than favorable to the dealer when it comes to reimbursement is long. Some employ threshold increases, others skew the interpretation of state statutes, and still others respond to submissions with multi-page, highly detailed letters that choke out any motivation to proceed.
Recently, one particular import manufacturer scrutinized every request for increase that was a certain percentage over the current rate, while accepting every request under that percentage. When challenged, the manufacturer stated dealers should only be entitled to that arbitrary percentage and not warranty reimbursement at retail — a flagrant disregard for state laws.
