Up To Standards
- Author: Mike Weinberg
- Subject Matter: Writing, receiving warranties
If you are in the repair business you issue warrantees for the work you perform, and you also receive warrantees for the products you buy to perform your work. Warranty is defined in the dictionary as “a written guarantee of the integrity of a product and of the maker’s responsibility for the repair or replacement of defective parts.” Simple enough as a description, but in the real world you are governed by federal, state and local laws that have been written by nameless, faceless bureaucrats. These laws are the basis for all litigation that can arise from any set of circumstances.
It is your job to select a proper warranty that meets all of the governing laws and rules, both to inform your customer of what they can expect from you and what their obligations are to maintain the warranty to remain in force. The car itself when new comes with a manufacturer’s warranty. The service manual is included in every new vehicle and while rarely read by the customer defines how the components are warranted and what services the owner must perform under that warranty to make sure it is valid. The manufacturer, seeking to enhance its service business, has reminder programs in place to prompt people when routine maintenance is due. If such required maintenance, such as motor oil and filter changes, are not performed on schedule, the warranty can become null and void.
Federal law on warranty is based on the Magnusson-Moss Act, which states that the warranty must have included in it that which is warranted and that which is not, and many state laws are based on the federal doctrine. There must be a specific time and mileage indicating the effective life span of the warranty. Unless you have a law degree, you would be a fool to write your own. Many automotive organizations such as ATRA have excellent warrantees that have stood the test of time in the courts and are as close to bullet proof as legally possible. When deciding on what warranty you will use, it would be smart to contact an attorney who is familiar with your local consumer-affairs laws. Never write any warranty material on the repair order. An example of this is a shop that writes on the repair order, “Work warranted for 6 months, 12,000 miles,” and sends the customer on his way.
The customer leaves and one month later goes on a vacation to a beach resort 1,200 miles away. The transmission fails and has to be repaired halfway to the destination. Because the shop did not follow the laws regarding warranty, the customer can take them to court and ask to be reimbursed for the repairs, towing, loss of time, loss of hotel and resort deposits, and charges for food, motel accommodations, and anything else they can think of. The customer will win this case in most instances, costing the issuing shop a lot of money.
Writing warrantees
The construction of a warranty needs professional guidance and should include the following:
Term of the warranty: Starting and ending dates describing the life span of the warranty, such as 6 months, 1 year, 3 years, lifetime. You may also include a mileage limit based on your needs in being competitive with other shops. If you ship units the mileage is not that important as you will never be able to verify it without having an on-site inspection.
Identify who the warranty is made to: This means that it was only warranted to a particular customer, and if that person sells the vehicle the warranty ceases unless you wish to make the warranty transferable to another party.
Specify parameters: Whether the warranty is local or national, and if national, how the customer must make a warranty claim with a repair shop of your choice, as you will foot the bill. All the more reason to be part of a trade association such as ATRA, which has a specific national group administering warranty claims shop to shop.
Limitations of the warranty: Here is an example. “This warranty is limited to replacing the transmission or parts thereof, which upon our examination prove to be defective. It does not include damage resulting from abuse, faulty operation of any part or parts not furnished as part of the transmission (such as linkage, clutch assemblies, shifters, motor or transmission mounts, worn or defective driveshaft components, failure of the engine cooling system), accident, or racing. Units will not be covered under warranty if they are run out of lubricant, under filled or overfilled with lubricant, or filled with the incorrect lubricant. Units will not be covered for failure of any onboard electronic systems not furnished with the transmission.
Limit vehicle usage: “This warranty is void if the transmission shall have been used in any application other than that which it was originally intended or which shall have been repaired or altered outside of our rebuilding facility.” This saves you from confronting the issues created by a customer who lifts his 4X4 to put 40-inch tires under and go to the Baja, or the guy who puts 2,000 pounds of newspapers in a compact for his paper route.
Magnusson-Moss Language: “This warranty DOES NOT cover such things as towing, loss of use, loss of earnings, personal injury damages, per diem expenses, nor any other consequential or incidental damages.” These are only examples that you can add to as needs require, such as acts of God, war, civil disorder, flood damage, etc.
Stop loss features: “XYZ transmission shop reserves the right to refund the full purchase price in lieu of all claims otherwise due a claimant under terms of this warranty.” This is not pretty, but it limits your exposure to catastrophic losses through a bad court decision.
Implied warranties must be covered in the warranty: “All implied warranties are limited to the terms of the written warranty. Consequential or incidental damages are not covered by this warranty. Some states do not allow limitations on how long an implied warranty lasts, or exclusions may not apply to you. This warranty gives you specific legal rights, and you have other rights that can vary from state to state. This warranty constitutes the sole obligation of XYZ transmissions to the purchaser. Warranty terms herein apply to both written and implied warranties.” Kind of like Miranda rights in criminal cases, let me know how you did on the bar examination.
Claims: It is important to provide the customer with information on how to make a warranty claim, and do so in great detail. You also need to explain how you expect the customer to service the transmission to keep the warranty valid, such as a two-week checkup, annual fluid changes at one year or 15,000 miles, all of which help you to bond with the customer and insure less comeback issues.
Expectations of warrantees
Now to what we expect when we have parts and units warranted to us. We expect our customers to bring the vehicle back to us for inspection under the warranty, and our suppliers have that same right to inspect their products under warranty as part of the claim process. This policy will vary from supplier to supplier. Most will reimburse the cost of the part or furnish a new one in its place after the inspection. Some will reimburse labor, some will not. We as professional technicians should be able to know if a part failed due to defective manufacture, or if the part failed due to improper installation or handling.
If it were due to improper installation, it is not a warrantable item. Here are some examples of areas where warrantees issue may be generated:
Bearings: For instance, every year bearings will be returned as defective and upon inspection, the inner race is covered with punch marks from being installed with a punch instead of using a correct sized pipe or tool to press on. There are some people who will use the shotgun approach to diagnosis and order six items to replace from the parts vendor and then look to return the five pieces that were not the problem. The parts were not defective, used for trial and error diagnosis, but are no longer saleable as the packaging is destroyed and they are marked up from installation. To expect the vendor to pay for that is dishonest and perverts the warranty system, which is largely based on trust.
Clutch sets: We see clutch sets returned for warranty that are soaked in oil from transmission or engine leaks, which creates a great waste of time and will go nowhere with the manufacturer.
Noise: Another huge loser is misdiagnosis to noise complaints. A reman transfer case is purchased, installed, and then the phone call comes in: “Your unit is just as noisy as the one I took out.” It is very rare that two units will make the same noise, especially as the reman was dyno- and spin-tested and passed the quality-control issue. Now the exchange core comes in, and when torn down, nothing is found wrong with the unit. The noise is coming from elsewhere in the drive line, such as a rear, CV joint, driveshaft, etc., and the shop misdiagnosed the repair. On any kind of a noise situation, the last thing to do is remove a unit as there can be no further diagnosis performed on the vehicle. Be patient and carefully inspect every part of the driveline that could generate a noise, understanding that noise will migrate from the point of origin to where they are now heard.
Lubrication: If the gear train is black and blue or melted from lack of lube, don’t expect warranty reimbursement. By the same token, make sure you are filling the unit with the correct specified fluid to get a proper functioning result. All types of transmissions, transfer cases, and rear ends need the correct lube to function properly, and using a substitute due to lack of availability or time constraints is just an accident looking for a place to happen.
Rear end: When you install new gears, they will usually have a phosphate coating that will generate some fine black material as the gears break in. Also any type of new gear train will shed some very fine metal as the gears in mesh polish each other at the point of the pressure angle. This is normal and to be expected and not subject to warranty. It is always a good policy to explain to your customer that there is a break-in period for the new gears, and how to drive it for the first 500 miles. At that point, schedule the customer to come back so that you can change the fluid before the debris gets into the bearings. A sure recipe for rear-end failure is to give the customer back his truck and then let him tow a six-horse trailer 1,500 miles with no break-in.
The present day quality of manufacture for the ring and pinion and associated parts from OEM suppliers is outstanding, with most claims occurring due to improper rear-end set up. Proper installation requires correct pinion depth (measured) correct backlash and gear pattern, a spotlessly clean rear end housing, proper pinion preload, proper carrier preload, and proper torque measurements. All told, 99% of rear-end noise complaints and early gear failure is caused by improper installation setup.
Every OEM manufacturer will run the ring and pinion on a test machine to make sure that at the setup is correct, the pattern is correct and there are no unacceptable noise levels. Then they lap the gears, coat them for rust protection, and package them. For instance, when installing the pinion flange nut or nut and washer, you need 200-plus pounds of torque to move the crush collar to its correct preload. You must grease the pinion threads, nut, and both sides of the washer before cranking down on the pinion.
There have been many warranty claims by shops that have twisted the pinion threads off the pinion due to high friction loads or lack of lubricant. Nobody will buy that under warranty. Another area in the rear end that often escapes notice is the housing itself. Especially in this era of increasingly high HP and torque outputs in the trucks, it is very possible to run into a twisted or bent axle housing. You can replace as many gear sets as you like in a bad housing with no good results, as there is no longer a true centerline and no amount of shims or adjustment will make it right.
A correctly written warranty protects the shop and the customer. It explains what is and what is not covered and provides as clear a path as possible to prevent misunderstandings and negative outcomes. As with all things in life, flexibility and good customer service will retain your customer base, add new customers, and make the future possible.
