Top 3 Ways to Avoid Warranty Audit Headaches in 2024

As we move into 2024, one of the most important things that fixed operations managers can do is to ensure that every precious dollar is collected from a dealership’s warranty claims for credit.

When considering the job of avoiding warranty claim debits, it can be a daunting task, fraught with many different and sometimes complicated processes and procedures.

Having said that, there are three primary steps to get your hands around to make your claims bulletproof.

1. Know the OEM’s Warranty Claims Policies and Procedures

OEM policy and procedure manuals can be lengthy and dull, however, as a fixed operations manager, you are ultimately directly responsible for ensuring that the dealership is in total compliance. Because of that, it’s imperative to know all the specific OEM policies and procedures that impact the brands you sell. You are the dealership expert in this area. While leaving this in the hands of a warranty administrator or an outside warranty administration company might seem like the easiest solution, it’s very risky. In getting to know the OEM’s warranty claims policies and procedures, here are some practical steps:

Take the time to personally read the entire policy and procedure manual. You won’t regret it!
Highlight any important items that may be a stumbling point for your dealer.
Partner with your OEM and attend all available warranty administration classes.
Dialog with your OEM representative so you can clearly understand his/her perspective on the policy and procedures.
Document in writing via email your OEM representative communications to avoid any miscommunication. There’s no such thing as too much communication in this area.
Become a master at understanding your dealer’s monthly warranty compliance reports.

2. Set Up Your Team for Consistent Success — Divide and Conquer

With so many OEM policies and procedures intertwined through both the parts and service departments, it’s imperative that everyone is not only properly trained, but clearly understands their roles in the process. In setting up your team for consistent success, here are some practical steps:

Delegate key members in each department as your lieutenants. These staff members should be adept in taking personal responsibility and enforcing warranty administration compliance.
Stress the importance of their new key member roles, and how increased communication with you is critical to overall team success in the future.
Partner with your OEM to provide key members with warranty administration training specific to each of their roles in the process.
Clearly communicate any dealership stumbling points so they can be on the lookout for compliance shortfalls.

3. Measure, Meet and Manage Monthly

Ensuring consistent warranty compliance is complicated due to both the ever-evolving nature of OEM policies and procedures, and the employee churn — both within and outside of the dealership itself. Keeping key members of your team engaged is a critical component to overall long-term success. In managing this ongoing process, here are some practical steps:

Review your dealer’s warranty compliance report monthly. Compare historical data and look for any problems, alongside upward or downward trends.
Meet with the team’s key members and review your warranty report monthly. Celebrate the wins and discuss any compliance shortfalls as well as necessary solutions. Keep meetings to 15 minutes or so if everything is in line.
Share the results of the monthly report with other team members — especially to celebrate wins, discuss compliance shortfalls and make necessary adjustments. Posting the report for employees to see each month helps create consistent engagement.
Delegate your key member lieutenants to provide comprehensive warranty administration training to any new team members. In some cases, the warranty administrator may be the appropriate person to perform training sessions for new team members.
Inspect what you expect monthly. Review all warranty claims for customers’ signatures, technician punch times, technician repair event notes and add-on signatures, for example.
Walk around. Inspect parts and service department processes to celebrate employee warranty compliance wins. You can never do too much of this!
Immediately meet any team members who are missing the mark on warranty compliance and assist them in making adjustments.

This may seem like a lot, however, if you set realistic achievement goals and engage your team, 2024 will be the year that makes the difference in achieving dealer management excellence!

Be sure to stop by the StoneEagle and Pencilwrench Booth #5157 in the West Hall at NADA 2024 to learn more about how your dealership can set itself on the path to success in 2024.