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Too Much Fine Print? Warranties Can Be Hard to Understand, But Effort Is Necessary

Rolf LockwoodRolf Lockwood, Editor at Large

Commentary by Rolf Lockwood, Editor at Large

Big fleets often write their own terms when it comes to claims on a manufacturer’s warranty. They’ll have direct pipelines into a truck maker’s claims regime, for example, and even its parts warehouse. Closely monitored, no doubt, but still a strong and advantageous position when it comes to controlling warranty costs.

Not so with the little fleet, much less the owner-operator. Such small operations just don’t have that much clout, but I would suggest – from experience – that they’re sometimes their own worst enemies. Costs soar and pain is suffered because, simply, they don’t deal with warranty issues properly. Like finding a way to understand the terms of protection about what’s covered and when – before the whatchamacallit blows up.

Warranties are a common subject of discussion in my working day, not least because there can be so much interpretation involved when it comes to the crunch. Is the darned doodad covered or not? Sometimes the answer to that question is less than simple – and much less than satisfactory.

I couldn’t count the number of calls I’ve had over the years from irate truck owners, mostly little guys with one or maybe a dozen trucks, who feel they’ve been screwed in some way. Their truck or engine or whatever came with a warranty or maybe they bought one to cover it, but when they make a claim they find themselves holding what they see as the short end of the stick.

Sometimes, though certainly not always, I can intervene a little by putting them in touch with somebody above the dealer level. Sometimes that helps, because by the time I get the call, the truck owner’s relationship with his local dealer has probably soured to the point where fisticuffs are the only communication option remaining.

Apart from the odd dealer with motivations other than customer satisfaction, there are two common threads in many of these cases: a failure on the truck owner’s part to read and/or understand the terms of the warranty, and his failure to keep records of the sort that would back up his claim.

The flip side of that first point is also common, namely a failure on the dealer’s part, and sometimes the manufacturer’s part, to make the terms of the warranty clear. Most warranties are so loaded with fine print that even a lawyer wouldn’t read through it, and the words aren’t in plain English anyway, so mere mortals like you and me would be beaten from the start.

I’d like to see all warranties written by people who are actually trying to communicate something as opposed to protecting their employer’s butt. In fact there are efforts being made in various corners to simplify the claim process, but warranties are still too tough to understand in the first place.

Misunderstandings sometimes arise because a lot of truck owners seem not to know the difference between a warranty repair and what’s often called a “policy” repair. The former is more or less straightforward: A part fails and it gets fixed, usually, because the warranty says it should.

A “policy” repair, on the other hand, is something fixed at the manufacturer’s discretion, having more to do with good will than a guarantee or formal obligation. Performance issues are sometimes dealt with this way, but satisfaction isn’t something you can expect every time if the fault isn’t clear or if it’s not expressly covered by the warranty.

A while back a reader wrote to me with some useful comments on a warranty story I’d written. A veteran of the industry, including time spent at dealerships, he urged truck owners to resolve every repair problem immediately.

“Nothing is more frustrating to a dealership than a customer coming back or phoning to say that last week’s repair was supposed to be warranty,” he said. “A host of issues arises immediately, not the least of which is the failed parts are probably gone, preauthorization from the manufacturer is not possible, and other info has been lost.”

Good advice. Worth following. Pin that paragraph on your bulletin board.

From the October 2011 issue of HDT.

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Tax, Accounting, Consulting - Emil Estafanous, CPA, CFF, CGMA