When the Magnuson-Moss Warranty Act was passed in 1975, the automotive industry saw a huge win for customers. The act, which required any consumer good with a warranty to follow its rules and regulations, helped provide peace of mind for customers by creating a standard application process for all warranties.
Because of that, whenever warranty disputes between an OEM and a customer arise, there is a fairly standard order by which those cases play out.
“The law is fairly robust,” says Allison Harrison, owner of ALH Law Group in Columbus, Ohio. “From a litigation defense, we see (Magnuson-Moss) brought up a lot, and it coincides with a lot of consumer protection laws. Often, you’ll see something be a violation of a state’s consumer law and then a federal Magnuson-Moss issue.”
As technology becomes increasingly more complex and cars require more sophisticated repairs, customers may have less of an understanding of what is actually covered by the warranties on their vehicles. Harrison says shops can play a critical part in helping customers know what their warranties cover and, maybe more importantly, what they don’t cover.
Know Before You Go
Harrison says warranty disputes are quite common between customers and whoever holds the warranty for their vehicle, adding that customers can bring up disputes on a wide range of alleged issues with their vehicles.
“It’s all over the board,” she says. “It can be anything from smaller parts of a vehicle to a specialty engine that costs $15,000.”
In most cases, if a customer brings a warranty issue to court, they try to recover the cost of the part and attorney’s fees. In some cases, they might be eligible to receive other statutory damages.
However, in her experience, Harrison says it’s best to avoid taking an issue to court if at all possible; very rarely will that work out for either party involved.
“I don’t think anyone wins. If you’ve gotten to the part where you’re bringing a lawsuit, the consumer has to pay the attorney and the repair shop has to pay an attorney,” she says. “The only people who really win are the attorneys.”
That’s where independent shops can come in and help play a key role in educating and helping customers. A common misconception that consumers have is that allowing an independent shop to work on their vehicle will invalidate its warranty. The Magnuson-Moss Warranty Act has a provision that prohibits “tying arrangements,” which require a customer to use parts or services from specific brands or companies. It is illegal for an OEM or dealership to void a customer’s warranty if they take their vehicle to an independent shop.
Regardless of who provides the warranty for a vehicle, whether its an OEM or a third party, Harrison says warranties are required to outline what they cover and what they don’t very explicitly. If a customer has a question or a concern about their warranty, the best place to tell them to start is the warranty packet that comes with their vehicle.
“It comes down to, frankly, reading it. That’s something that often gets overlooked,” Harrison says. “(Customers need) to really look at it to see what it covers. That’s the biggest miscommunication that we see.”
If the language in a warranty is unclear, calling the warranty holder can often provide answers, too. Most warranties are held by an OEM or a third party instead of a specific dealership, so hesitant customers can avoid causing an issue with a specific dealer.
Protect Yourself
In addition to seeing customer/dealership warranty disputes, customers can also bring complaints against an independent shop if they believe their car was repaired improperly.
If your shop is going to work on a vehicle that is still under any kind of warranty, Harrison says familiarizing yourself with the terms and conditions should be one of the first things you do before opening the hood.
“There’s so much information,” Harrison says. “Those warranty booklets are getting bigger and bigger as cars get more complicated, but if you make sure that you double-check that, you should be just fine.”
In the event that a customer does raise a warranty dispute with your shop, there are a couple of key things Harrison says can help resolve the situation.
It can be really easy to get defensive when a customer raises a dispute, especially if the claim is baseless – it can feel like an attack on your shop’s work ethic. Harrison says taking a step back and recognizing the customer isn’t trying to maliciously attack you or your shop. Instead, they probably don’t have a good understanding of the situation.
“It’s never good if you’re upset to have that conversation. Take a step back and breathe,” Harrison says. “A lot of times, if the parties talk it out with level heads, everyone is going to feel better about it.”
In the event that a customer is trying to question your work, Harrison says you can protect yourself by documenting what you do to the vehicle. If you don’t have a way to reproduce and validate your work, that can create a “we said-they said” argument. If you document it, you can show the customer and the warranty holder. Taking notes on what you fixed and how you fixed it, shooting a quick video on a phone to show the quality and extent of a repair and being transparent in how you talk to a customer can all help.
“Cars are really complex. Taking time to explain to your customers how the mechanics work, how parts are physically located on the car and if they’re connected goes a long way,” Harrison says. “(A lack of clarity) is usually where we see these issues come from.”
Though warranty law can seem overwhelming, there are several ways you can help protect yourself and your customers.
Quite simply, Harrison says in many cases, the solution comes down to one key thing.
“Read. Read, read, read,” she says. ““It sounds so silly, but that’s how we usually resolve it.”
