Properly Documenting a Policy Repair
It is well known that the decision to make a policy repair (a warranty repair on a vehicle that is out of warranty) can only be granted by the service manager, or a qualified member of the service management team. Technicians, warranty administrators, or other non-supervisory hourly personnel cannot be considered as part of the team. Policy repair decisions are to be made on a case-by-case basis, and a crucial part of documenting approval is the service manager's explanation as to why the policy repair was granted.
GM lists examples of supporting factors that might constitute a policy repair in bulletin 11-00-89-005. These examples are intended to be guidelines that support the policy decision making process and also should be part of the service manager's written explanation.
Close to vehicle or component's warranty expiration - A customer with a vehicle just out of warranty, by time or mileage, is someone more likely to consider for a policy repair as opposed to someone who is out by a great deal. If this is the reasoning for a policy repair, the service manager should document their approval similar to:
- John Smith, 1/11/16, 3:00 p.m. Policy repair granted to customer due to warranty being out by 23 days. Vehicle has low mileage.
Original Owner - The original owner is a more valuable owner, especially if they have had all their maintenance done at your dealership. They bought the vehicle brand new and paid more than someone who bought the vehicle used. Approval should be written similar to:
- Mary Jones, 1/13/16, 10:30 a.m. Customer is the original owner and a loyal GM buyer. Policy repair for this reason.
Loyal GM new vehicle customer and/or loyal service customer - Certainly, we want to reward our most loyal customers. Lots of companies reward loyalty. If the reason you are doing a policy repair is for customer loyalty, write something along the lines of:
- Jack Miller, 1/20/16, 5:30 p.m. Customer has bought several GM vehicles in the past. Or, Customer has all their maintenance and repairs performed at our dealership. Policy repair due to customer loyalty.
Repeat repairs related to current vehicle issue - Sometimes a customer has had a problem with their vehicle that never gets entirely resolved. Or, a certain component has failed multiple times during the warranty period. Now they are out of warranty and not happy about having to pay for a repair that has a known history of being a problem. If this is the situation, approval should be written as:
- Sam Adams, 1/16/16, 1:45 p.m. Customer has had repeated window motor problems and has had the motor replaced 3 times under warranty. Policy repair due to more than normal window motor problems.
Type of repair - Certainly an expensive repair is the type of repair a customer would like help with. Engine failure at 89,000 miles but out of warranty by date is almost always a scenario that will generate a request for warranty assistance. If granted, the explanation should be:
- Nicole Martin, 1/28/16, 3:15 p.m. Engine failure within the warranty mileage but out by time. Customer has asked for assistance as the repair would exceed $4000. Policy repair granted due to the expense of the repair and the customer's loyalty.
High number of days vehicle down during warranty - If your customer has had multiple problems with their vehicle, resulting in the need to bring their vehicle in for repairs more times than normal, they probably aren't pleased with the vehicle and may consider other manufacturers when it comes time to buying another vehicle. If they are now out of warranty and have a vehicle problem, there is justification for a policy repair, if requested. The explanation should be along the lines of:
- C. Sanders, 1/12/16, 10:00 a.m. Customer has had many problems with their vehicle and have been good about the inconvenience of bringing their vehicle in for warranty service. Total number of days the vehicle has been at the dealership over the last 3 years is greater than 30. Policy repair for this reason.
There are other reasons that support a policy repair, but the reasons stated above are the most common. Whatever the reason, the policy repair justification must be fully explained and include the service manager's signature, and the date and time it was applied. This written approval must be documented prior to transaction submission. Too many repairs are charged back by auditors because the four elements - signature, date, time, and reason - are inadequate or just plain missing.
Also, it is expected that there is either customer or dealer participation in the majority of policy repair decisions. The policy calculator, found in the Dealer Aftersales Empowerment application, should be used to calculate the customer or dealer's participation dollar amount. If the amount noted on the calculator is adjusted, a calculator printout must be attached to the hard copy of the job card. The participation amount is entered in the "customer/service agent participation amount" field when submitting the transaction.
The person in your dealership that submits warranty transactions, typically the warranty administrator, must verify the service manager has completed all four required steps to properly document not only policy repairs, but all repairs that require service management involvement. Signing your name and applying a date and time is the easy part. The tough part is thoughtfully explaining why you used your empowerment so that if your claim is ever reviewed by GM, it will stay paid.
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