Warranty labor at retail rate is a way of getting car repairs done without going through the hassle of dealing with the manufacturer. The main advantage is convenience – you can just take your car to the nearest authorized dealership and have them do it.
The downside is that it’s more expensive as a dealership will charge you the same price for any other customer. So, if a warranty does not cover you, you might be better off taking your car to an independent mechanic.
However, if your car is still under warranty, it’s worth taking it to the dealership. They’ll be able to do the work quickly and efficiently, and you won’t have to worry about getting the warranty honored. Plus, you’ll have the peace of mind that comes with knowing your car is in good hands.
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.
