As parts and service sales continue to flourish, so does the need to capitalize on the increased warranty volume dealerships are experiencing.

NADA Data shows total dealership service and parts sales has spiked since 2020, and has continued to grow year after year.

As fixed operations revenues continue to be bullish, if dealers are tactful in their approach, there is tremendous opportunity in retaining their due portion of these greater warranty profit dollars.

Below, the NADA Data chart shows that $9.58B of the $59.79B in service sales is warranty work. And $11.98B of the $81.78B is parts sales is warranty work.

This means that over 15% (and growing) of service work is warranty-related. Warranty work constitutes the third highest grossing sector of dealers’ fixed operations.

Dealers can maximize this warranty volume by combining strong operational practices (i.e. optimized retail door rates, strong effective labor rates, reduced discounts, etc) and achieving warranty reimbursement at retail.

Warranty Reimbursement Done Better