Extended warranties

[Eric]

I am interested in opinions on extended warranties, specifically, aftermarket extended warranties. We switched from API to Western National several years ago after a lot of investigation. Unfortunately, Western National turned out to be worse. They do everything they can avoid paying claims, cost ASM's huge amounts of time and bring the shop to its knees with approval delays. Customers suffer as well. We have finally switched to Ford ESP and Chrysler contacts only and I'm sure any profit we lose because of the higher price of these contracts is made up in efficiency in the service department and customer satisfaction. Has anyone had good experiences with aftermarket warranties?

[robc]

Moderator Note:

I never really like to restrict information on this board, preferring the open exchange of information we've created. However, I am asking the when replying to this question you please try reserve your comments to positive experiences. We can all spin tales of nightmare companies with second rate contracts. I think it would most helpful to just give companies that are working, not the many fringe players that aren't. Eric's comments are appropriate to his experiences and to begin the dialogue, but I know if we all just posted the problems with after-market companies the thread would get out of hand.




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** Rob, Editor WD&S **
Help is only a message post away!
robc@dealersedge.com

[jrcal]

We had used Western National before but have found Universal Underwriters to be much more professional in reviewing the claims in a timely manner and more importantly, paying the claims in a timely manner. When they do send an adjuster, he usually arrives the next day. I especially like the reminders they send us when they have not obtained the necessary copies of the paperwork from us. The reminders simply ask for the copies of the specific claim numbers and invoice numbers. Also the range of covered items is much better than other aftermarket extended warranties we offer. Our preferred is GMPP but Universal Underwriters is a close second.

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JC

[David S]

Extended warranties are never easy or fun to deal with. We all know that, but as far as after market warranty companies go, I always had great experiences with Ryan Warranties. They only sent inspectors for repairs over $1,000 and the inspectors were always prompt. It also seemed to me that they were always on our side trying to insure the customer had a positive service experience. More important they were often willing to negotiate with us to find a mutually beneficial arrangement in sticky situations.

David S.

[Bill Stueckemann]

I find it interesting that service people have such opposition to extended warranties. we deal with about 10 diffrent compainies from time to time. In our dealership we sell the 1st Extended and Onimi products. I find all with the exception of GMPP and Chrysler Service contracts pay us fairly as per the Chilton/Motors manuals. The only area we loose sometimes in in diagnosis, but admit it we also loose with customer pay and warranties for diagnosis sometimes. We find them all to be a fair and honest set of compainies. My favoriets are GE Capital and Universal Underwriters of the ones we do not sell. Try looking at your approach to them and your prepardness before your call to help improve your attitude toward service contracts.

[JW]

I have seen some dealers are going to their own extended contract program.

I spoke with a dealer yesterday that recently started their own program. They set it up as a separate company and it mirrors GMPP exactly (same contract price, same coverages.) There is never an adjuster and they are pretty flexible with labor time as you can imagine.

Customers are required to do all of their recommended maintenance work at the dealership as part of the contract. GMPP is still offered to customers that request it. So far it is working out well.

Other dealers offer a 100,000 mile warranty on all new vehicles. They set a small amount away at the time of sale to build a "kitty" for the dealership. Maintenance work must be done at the dealership also. Heavy sales and repeat business will offset large repair bills.

I guess only time will tell if they are successful. Do any of you have your own program?

[Michael White]

Many dealers have been setting up their own extended warranty companies for years. This is nothing new. the angle about having to do all maintenances at the dealership I have not hear of. I know several domestic dealers lost their shorts with it. It is exceptionally profitable in many of the foreign lines. There are variations of this as well. You can be the paperholder of a well known extended warranty company, and take a large part of the profits and losses.
Mike

[MARY SHERICK]

SOME COMPANIES I HAVE HAD SUCCESS WITH: EASY CARE(ATLANTA,GA),GE CAPITAL, INTERSTATE DEALER SERVICES(NEW YORK),RYAN(AUTOMOTIVE WARRANTY SERVICES, NOT TO BE CONFUSED WITH THE ONE THAT SOLICITS PEOPLE BY MAIL FROM ALABAMA),ANOTHER ONE THAT IS VERY GOOD IS DEALERS ALLIANCE(COLUMBUS,OH). THESE COMPANIES HAVE GIVEN GOOD AUTHORIZATION SERVICE, AND GENERALLY PAY THE CLAIM IN A TIMELY FASHION..VERY IMPORTANT TO THE CASH FLOW. AN AUTHORIZATION DOES NO GOOD WITHOUT THE CASH TO BACK IT UP!!

[Michael White]

Mary, you are so right. We will not do any billing for any extended warranty unless we are using them. We only use companies with huge financial backings. the only exception to this rule is the usage of Ford and Chryslers plans. They pay very well and have had no issues with them. I have performed some very large jobs with the Ford plan and including a complete engine, and they never even sent an inspector out. Many of our neighboring dealerships were seriously burnt years ago because extended warranties were tdropping like crazy and dealers where left hold the bag of poop.
Mike

[meangreen4019]

I dont understand why so many of you are neg. on extended service contracts that you dont sell. Most extened service contract companies will pay by credit card over the phone before the customer picks up there car.All you have to do is request it.