Time for a Change
Every dealership understands that the technician shortage has brought into question, how we do business. Several states across the country have new laws that state the manufacturer must pay retail pricing on parts and labor for warranty claims. I strongly believe this is a good beginning however, there’s one additional item that we need to consider. The way the manufacturers compensate dealerships and technicians on warranty times is well below standards.
It isn’t the technician’s fault that a broken vehicle happens to be under warranty. It isn’t the dealership’s fault that a vehicle broke under warranty. Why then do both of these parties suffer financially from that experience?
A typical technician might have in excess of $50,000 investments in hand tools. The dealership needs to invest $50,000 in training to get a technician to master status. The manufacturer covers none of that, yet believes it reasonable to pay very low times to complete repairs under warranty. Today’s vehicles are very complicated and require time to diagnose properly. Imagine attempting to find an intermittent electrical concern, checking connectors under warranty with the knowledge that you’re not likely going to get compensated by the manufacturer for your time. The technician is more likely to turn the vehicle back over to the customer saying they could not duplicate the concern. Who does this help?
It’s time the manufacturers implement a better way to compensate dealerships and technicians to repair their vehicles. I suggest a more reasonable approach would be to take the average field repair times of each labor operation and use that as a baseline. When a technician is required to spend more time on a job it should be verified however should never go unpaid to the dealership for the technician.
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Author: Digital Dealer
Digital Dealer exists to help dealers and their managers sell more vehicles more profitably by creating the best live events and media in the industry.