Dealer warranty statutes and laws have been in place for decades, yet the benefits to dealers from dealer selling programs are relatively new. State legislatures around the country took the initiative and passed many bills pertaining to dealer warranty reimbursement statutes. These statutes were intended to ensure that consumers are provided with a good dealer buying experience. They were meant to level the playing field between manufacturers and retailers. Now we know how that playing field has affected both the manufacturer and the dealer.
Because state legislatures enacted dealer warranty statutes mandating dealer warranties, manufacturers passed their own laws protecting dealer customers from unscrupulous manufacturer practices. Unfortunately, some state legislators passed dealer warranty reimbursement statutes but made no provisions for ensuring those laws were enforceable. Today, nearly one in three state constitutions is worded to protect dealers from and defeat the restrictions imposed on manufacturers. In short, these statutes have not served their purpose of guaranteeing dealer interests. In fact, the opposite has happened.
As a result of these statutes, the dealer warranty on a new vehicle purchased by a dealer has always been void. It is almost impossible for a dealer to sell a car with dealer service without obtaining an auto dealer warranty. Today that isn’t as much of a problem because many auto dealer service contracts are now in force. But the protection afforded under the dealer warranty was and still is limited to the mechanical warranty on the vehicle being sold. The warranty on parts was, and remains, practically non-existent.
The dealer warranty reimbursement requirement for most parts is a ten-year or a lifetime warranty against defects in materials or workmanship. The manufacturer’s warranty on parts is usually only a two-year or a limited warranty against manufacturing defects. This is one reason the government has placed such a large emphasis on these statutes. The reason was to protect the manufacturer’s financial investment in the new auto sales market. These warranties were also supposed to protect the dealer’s financial investment in that new auto sales market. But, the dealer warranty only covers replacement costs, not labor or repair costs.
That’s one reason the dealer warranty is so costly. It protects that dealer from having to pay for those repairs. But, you may be asking, what about those times when something breaks on your car? Well, that’s another part of the dealer’s responsibility. So, what can you do if you buy a car with dealer warranty reimbursement?
When you buy a new vehicle, the dealer will require you to sign a dealer warranty before delivery, which is true even for used cars. But, just like anything else, there are some exemptions. Usually, the dealer warranty requires that the dealer inspects and services the auto warranty within a certain period of time after delivery.
If the auto warranty doesn’t cover it, your dealer will provide you with a list of approved mechanics and will reimburse you for the services. But, what about maintenance? It’s important that you choose a reputable and reliable service facility. You don’t want to be paying for parts, labor, and repairs that aren’t covered by your dealer warranty. That’s why you need to check the details carefully and consider all the options available.
How do you find a good service facility? Ask around, read reviews online and take advantage of dealer loyalty programs. You may be able to find a local dealer that offers a great warranty program at a discounted price. When you shop for your dealer warranty reimbursement, make sure you get a complete detailed report, including warranty availability, services covered, and other dealer assistance. You don’t want to sign a contract with a car dealer only to find out that it’s not right for your needs. For more information on dealer warranty reimbursement be sure to visit Warranty Part.
