When car dealerships perform service under warranty conditions, who eats the cost? car comp or dealership?

Answer 1

The company, which is why they try to keep warranty low. If the company rejects warranty claims the dealership will have to eat it which is why warranty rules are strict.

Answer 2

That's a good question. It depends on the type of repair and the type of warranty you have. If you bought the vehicle new and it's covered under the factory warranty then the dealer bills the manufacturer (Ford, Chevy, etc).

If it's a dealer issued warranty (most likely on a used vehicle) the dealer eats the cost every time. You'll find that in either situation the dealer will do whatever possible to avoid doing warranty work. The more submissions they put out for payment the less cash flow they have on hand and the less incentives the car manufacturers give them. For example, if you run in your new vehicle for a repair, they fix the problem, bill the manufacturer and get reimbursed or issued credit with the company. The second time the manufacturer will most likely deny coverage to the dealer but still require the dealer fix the problem at hand.

The warranty industry is similar to the insurance industry, they will do whatever possible to avoid "paying out". The manufacturer of an automobile is no exception.

This is not to say many warranties offered today aren't worth their weight. If you work with a reputable dealer and buy a well built vehicle you shouldn't have any issues resolving a warranty related issue.

Hope this helps!

Answer 3

Each repair is costed by the Manufacturer and that amount is paid to the garage as the fix it cost.

Answer 4

The dealer bills the corporation.

Answer 5

company takes the hit

Answer 6

Dealer if their not the origenal company of that model.

Answer 7

they are reimbused by the manufacturer of the car.truck

Answer 8

IN REALITY WE DO AS THE CONSUMERS.