Frequently Asked Questions: Warranty Reimbursement and Dealer Guidelines

That depends on what manufacturer, and in what state. While factory behavior is certainly a valid issue for every dealer, in recent years, the prevalence of updated statutes and increased number of dealer requests has lessened the level of concern considerably.

Our experience is that manufacturers fall into three categories: those that follow the letter and spirit of the law; those that challenge retail submissions, but ultimately pay; and those that simply refuse to pay retail. By and large, most manufacturers now handle submissions professionally and without conflict. In over 17,000+ submissions we have not seen any sign of retribution, regardless of what category the manufacturer falls into. Top industry attorneys agree that retribution in this arena is largely a myth.

Yes we do. In addition to performing standard manufacturer labor submissions, we also perform statutory submissions, depending on which one yields the best result. Clients who engage us to do a parts submission, enjoy the added benefit of having their Customer Pay Labor audited to determine if they are in a position to submit for a warranty labor increase. It is not unusual for the labor uplift to equal or exceed the warranty parts uplift. Of course, this is a completely separate submission, and would be subject to an additional agreement.

Bear in mind, we can perform manufacturer labor submissions in all 50 states, so even if you can not obtain retail for parts, you can still take advantage of our professional services and optimization to perform your standard labor submission.

MSRP is possibly one of the most misunderstood terms in the auto industry. It is sometimes used interchangeably with retail, which most dealers consider to be a 67% mark-up. However, a careful study of the few manufacturers that reimburse warranty parts at factory MSRP will reveal that the true, or effective mark-up, is usually between 50% and 55%, depending on work mix.

The retail that dealers are entitled to under favorable state statutes is the amount that their customers pay them for warranty-like work. Customer Pay Retail optimized for Armatus clients is usually a mark-up in the 75% to 85% range; far greater and more equitable than the standard 40% markup paid by the vast majority of factories, or MSRP mark-ups granted by a few manufacturers.

A dealer choosing to do this in-house would have to read and interpret the law, understand the manufacturers protocols, compile the submission, and deal with the manufacturers response. Assuming the dealers personnel are up to all of that, and execute a perfect submission, on their first effort, they may be ready to submit in about sixty days. Approval of the retail rate in most states must occur within thirty days (some states are 60 days) for a realistic total of ninety days.

Barring data access issues, Armatus would typically have the process completed in about half that time, usually forty-five days. Time is money; for the average store, this time savings would mean an additional profit of $12,000. And of course, there would be the additional profit left on the table that could have been derived from Armatus optimization process.

You know, that is the number one question we get asked. The answer is an emphatic no! As incredible as the opportunity might sound, these benefits are being enjoyed and taken advantage of day in and day out by dealers all over the country. We have built the road map for you so you barely have to lift a finger, and you can achieve the best possible mark-up available. And you can be submitted and approved faster than any other method. Our clients are constantly amazed at how easily and efficiently they can begin to enjoy their new found profits, and unlike other initiatives, there is no need to make any investments in brick and mortar, inventory, advertising or personnel.

Its a no brainer!

Although there are 49 states with strong or favorable statutes, no two are identical. To complicate the matter, a given manufacturer may approve submissions in certain states requiring retail, but not in others. The manufacturers behaviors are constantly in flux, and it would be best to consult a professional, rather than just looking at your state law for a retail reimbursement requirement. Since we are constantly engaged in the process of submitting to all manufacturers across the country, we can give you an answer on the spot.