Many dealerships or manufacturers have a formal or informal policy with respect to “goodwill” or customer satisfaction repairs. Usually dealers perform these repairs because a problem is not covered under warranty, the warranty covering the vehicle has expired, the customer has had multiple concerns with the same issue that might be due to operator error, or simply because the consumer has continued to complain about an issue that has not been duplicated.
Dealers often decide to perform repairs in order to make a good faith attempt to satisfy a customer, keep the customer satisfied, earn the customer’s continued business and perhaps even avoid litigation. However, many dealers fail to consider the potential negative consequences of making such a repair.
If a dealership makes a goodwill repair to an item that is not covered under warranty it can result in the dealer causing itself or the manufacturer to waive certain legal defenses or, at a minimum, make them much more difficult to prove in a subsequent lawsuit or lemon law action.
If you make repairs even though you suspect the problems are caused by modifications, misuse or abuse, it will make it much more difficult to explain why you declined to make future repairs under warranty. If a part is specifically excluded under the warranty and you repair or replace that part anyway, the consumer may argue that your actions constitute a waiver of that disclaimer or perhaps some type of warranty from you. Covering an item after a warranty expires may extend a new warranty on the part or parts you repaired and potentially any interrelated parts depending on the laws in your state.
The type of goodwill repair which generally proves most problematic is one where a dealer repairs a part without duplicating a failure. A dealer who “throws a part at the problem” where the repair fails to satisfy the consumer can create difficulties in defending a lawsuit. If the consumer later brings a lawsuit against the manufacturer and/or the dealership, it is difficult to explain to a judge or jury why a dealer would perform a repair if it was not necessary.
It also makes it much more difficult to argue that there is nothing wrong with a vehicle. Most judges and juries believe that if a dealer performs a repair, the very act of making the repair might be an admission that the vehicle suffered from the issues complained of by the consumer. At times this can be an insurmountable presumption to overcome. Additionally, making a repair under these circumstances could lead to the party who gave the warranty, to charge back the repair to your dealership or even auditing your warranty submissions.
My advice to clients generally is to exercise their best judgment when making decisions regarding goodwill repairs. If you have a good history with a customer and you are confident that making such a repair will satisfy the customer, then by all means you should consider making the repair. However, make sure you document clearly that it is a goodwill repair, why the item is not being repaired under warranty or, if it is, why it is being covered under warranty in this specific instance.
It might also be helpful to include a statement on the repair order that indicates that making the goodwill repair in no way is an admission that the vehicle suffers from any defect or issue, or that the repair should be covered under warranty. Documentation of the details surrounding the repair will be key if the customer later files a lawsuit or lemon law claim.
With respect to a customer with whom you do not have a relationship with, or who has already threatened legal action, the presumption should be against making the goodwill repair. It is always a good idea to consult with dealership management and your manufacturer’s dealer liaison before making a final decision regarding a goodwill repair.
Once again documentation is a key. Make sure the repair order reflects why the repair was not performed and enter any pertinent information in the dealership’s computer data systems. Make sure to submit this information to the manufacturer.
Finally, there is almost never a good reason to “throw a part at a problem” or to make a repair where you have not duplicated a problem. A better tactic is to involve other technicians, keep the car for a few days and perhaps have a technician drive it for an extended period of time. You could also conduct more thorough diagnostic procedures such as using a data recorder, and consider involving the vehicle manufacturer by calling its technical hotline or involving your dealer liaison.
If there truly is a problem with the vehicle, there is almost always a way to duplicate or detect it. If you can’t duplicate it there is a high probability that there is not actually a problem with the vehicle. By taking a little additional time and consideration, as well as by adding some additional documentation, you could save yourself a lot of heartache if an attempt to do the right thing for a customer does not turn out the way you expected.