Outline of the process used to establish a dealer’s warranty rates under the Retail Rate Option.
This process is consistent with the following principles:
l Enables dealers to apply for an updated warranty labor rate that is based on each dealership’s effective retail labor rate.
l Complies with state laws with respect to warranty labor reimbursement.
Any U.S. Ford or Lincoln dealership that:
Repair orders must be in sequential order and customer paid on Ford, Mercury and Lincoln vehicles, excluding only the repair types indicated below.
NOTE: The RO analysis will be considered invalid and required to be redone if these guidelines are not followed.
The following types of non-warranty, customer-paid service repairs
are to be excluded from the analysis.
Complete the form below. You will be contacted within 24 hours by a warranty specialist to
begin your submission and answer any questions.
Manufacturer Sets the Rate: Manufacturers usually set a standard labor rate for warranty work, which is often lower than what a dealership charges for non-warranty services.
Dealerships Aim for Higher Rates: Dealerships try to get reimbursed at their retail labor rate, which is higher than the manufacturer’s standard rate, to increase their profits.
State Laws and Fair Compensation: Many states have laws that require manufacturers to pay dealerships fairly for warranty repairs. These laws allow dealerships to submit proof to justify higher compensation at their retail rate.
Submission Process: Dealerships can submit repair orders or other evidence to manufacturers to request an adjustment to the reimbursement rate.
Impact on Profitability: Receiving a higher warranty labor rate helps cover the actual costs of providing service and increases a dealership’s overall profit
Yes. It’s the law in nearly every state, yet many dealers have not taken advantage of the potential windfall that a warranty uplift can bring.
Yes. Check out our website interactive map www.warrantypart.com. Read your state’s law regarding warranty rates.
This is a common misconception and often paralyzes dealers with fear. The truth is most state laws are specifically written to protect dealers from punitive audits by the factory. In our 25 + years of experience, we have never had a client audited due to a rate increase.
Remember, the factory has a team of legal experts dedicated to stopping dealers from receiving higher rates. Ask yourself these important questions before attempting it on your own:
We charge a low, flat fee and never take a cut of your increase.
45 – 60 days on average from start to finish. Most states allow the factory 30 days to review your claim.
