In the car business we’re always faced with challenges and the need for speed to get things done. This sometimes leads to finding the quickest way to solve a problem to get it off someone’s desk. Customers are waiting to be taken care of, someone needs an immediate answer or you just don’t have time to fully invest wait on hold for someone.
It’s an issue we all have but how we resolve it is where we run into problems. The phrase “Just get it done.” has been heard through every single dealership but sometimes that’s been interpreted as “Get it done as fast as you can so it’s not my problem.”
In the race to “Just Get It Done”, it often leads to shortcuts that in the end could be more damaging than taking more time to resolve a problem.
Here’s an example.
A customer comes into the service drive and they’re about 1,100 miles out of warranty and they have a problem with their vehicle that’s fairly common. There’s no warranty extension to cover the problem and the customer doesn’t have a service contract. They’re also a good customer.
The service advisor wants to take care of the customer since they’ve been a good customer for a long time and have purchased other vehicles from the dealership. It’s possible the service advisor may even talk to the service manager about it. The decision is made to rollback the mileage on the repair order because the
vehicle is still in warranty by time. It seems innocent enough. You feel pretty confident the manufacturer would approve of giving the customer a goodwill adjustment for the repair so changing the mileage isn’t so bad, is it?
Yes it is! It’s great to help out a customer and the service staff was probably right thinking that the manufacturer would have provided goodwill assistance on the repair considering they are a good customer and the problem is a pretty common one. But the problem arises when you shortcut the policy on goodwill and took the easy way out. When you start altering documents to get a claim paid you end up potentially causing more problems not only for that claim but the dealership may suffer the wrath of something they may
not fully understand or consider.
Let’s say your warranty expense is high and it’s under the scrutiny of the manufacturer. Eventually a warranty auditor may come in to do a review. If you’re lucky they don’t see the claim we talked
about. If they do see that claim during the review, you could be in a world of hurt.
The auditor may see you altered the mileage on the claim even though you made an effort to cover it up but not necessarily a good one. Most people aren’t particularly great at covering all their tracks. So the auditor finds the altered mileage and charges the claim back. You argue that you’re owed the money, you did the right thing for the customer and they would have approved the claim anyway.
It’s doubtful you’ll win the argument so you’ll not only lose that claim but you’ll likely lose many more. Altering the mileage is often considered misrepresentation and is a nice way of saying you committed fraud. To take it one step further, most manufacturers when they find misrepresentation will automatically schedule a
follow up review no matter how well the audit goes otherwise even if you bring your warranty expense inline. You may also find the level of the audit you’re going through is increased.
So now that one claim (perhaps others were found too) has guaranteed you a return visit no matter what the condition of the other claims reviewed were and regardless of whether you got your warranty expense under control.
That $200 claim has now turned into an accusation of fraud and another visit from the auditor that you may well have avoided otherwise. The next visit will bring about even more chargebacks. So could that $200 claim turn into an additional cost of $2,000? $20,000?
How much time will your dealership spend prepping for the next audit and dealing with the auditors during their visit? It’s starting to sound really expensive, doesn’t it?
Don’t assume this applies just to mileage rollbacks. Any number of shortcuts can lead to a situation the manufacturer will consider a serious problem. It could be anything from clocking on two separate ROs at the same time to changing part numbers on a claim to get it paid or opening up a separate RO on the same vehicle to spread certain expenses over separate ROs to bypass the need for an authorization from the manufacturer.
In extreme cases where fraud/misrepresentation is widespread, there is the chance that the manufacturer may start proceedings to terminate the franchise.
If you think there’s no trouble going on, think again. It happens in many dealerships. In some dealerships it’s a rare event and in others it’s a condoned practice. It not only has to do with avoiding an audit but if the practices of deception are condoned in the dealership, how far will a rogue employee take it? Will they steal from the customer? Will they steal from the dealership?
Don’t let some extra paperwork or a little time getting an authorization bring much bigger problems into your dealership. The time saved could be the costliest mistake ever made.
