How to Maximize Your GM Warranty Reimbursement Rate

If you are looking for more information about the current GM Warranty Reimbursement Rate, read on. We will discuss the new laws affecting warranty reimbursement rates and what you can do to maximize your warranty rate. Here are the benefits of maximizing your warranty reimbursement rate:

GM’s current warranty reimbursement rate

In the last two years, GM has faced a lawsuit from car dealers in Indiana over its policy of charging dealers extra money for warranty work. The car maker agreed to reimburse dealers for labor costs during warranty work and offered them two options. Among those options, option C was the most popular. It required GM to reimburse dealers 144 percent of their costs. Nevertheless, it is unclear whether the surcharge will be reinstated  .

The basic warranties offered by GM are comprehensive, but they do not cover damage caused by fire, theft, misuse, environmental conditions, or modifications. The extended warranties offered by GM for Buick, Cadillac, and GMC are longer than the industry’s average. On the other hand, the short warranty periods for Chevrolet and GMC are much lower than the industry average. As a result, GM customers should check with their dealer to see if they will be eligible for these extended warranties.

The current warranty reimbursement rate is based on a formula that reflects GM’s actual costs for parts and labor. Beck’s calculation method involves adding up individual markup percentages from all of the qualifying repair orders and dividing that number by 100. If Beck’s calculation methodology were used, GM would be required to reimburse its retail customers for thousands of dollars more than they would pay for the same parts.

New laws affecting warranty reimbursement rates

As of January 1, 2022, the formula used to determine warranty compensation will change. This change will not allow dealers to manipulate warranty reimbursement rates as much as they have been. This applies to all warranty repairs, including recall repairs and “stop-sale” repairs. This change is a win for consumers and collision repairers alike. Let’s look at some examples of new laws affecting warranty reimbursement rates. Here are four of the most important.

These new laws may override the contractual warranty reimbursement rates, but that doesn’t mean that manufacturers can manipulate the data. As a result, manufacturers should closely monitor dealer tactics to artificially inflate their warranty reimbursement rates. Some of these tactics include improper rate calculation methodologies and exclusion of certain types of repairs. In addition, dealers should not be allowed to limit the number of repairs based on failure rate indexes.

In Illinois, the new law prohibits car manufacturers from charging a recovery fee or surcharge on warranty payments. This law also prevents manufacturers from paying dealers 1.5 times what they would otherwise be paid if they were retail customers. In the future, dealers will be required to pay manufacturers for diagnostic time and communications with manufacturers. The Illinois law is an example of how the new law is helping dealers maximize their warranty reimbursement rates. There is a clear need for better warranty reimbursement rates.

Options for maximizing warranty reimbursement rates

While the new law takes effect on January 1, you should start preparing now for the change. This change could limit what manufacturers can do to manipulate warranty reimbursement rates. Third-party companies and private legal counsel can help you analyze repair orders to determine how to maximize your warranty reimbursement rates. IADA recommends consulting with a private legal counsel before entering into any such agreement. However, this is a personal decision that should be made in consultation with your own attorney.

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Christophe Rude

Christophe Rude

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