Car repairs can get quite expensive. And, when you’re facing car repairs, the last thing you want is to get into a disagreement with the dealer or service provider about your automotive warranty.
Fortunately, understanding the repair claim procedure will help you take the steps necessary to increase your chances of getting the repair bill paid.
What Are the Differences Between a Warranty and Service Contract?
It’s important to understand the differences between a warranty and a service contract. Even though the two terms sound similar, they’re not, and the repair claims process depends on the type of policy.
How Automotive Warranties Work
When you buy a car, especially a new car, the dealer or manufacturer promises to repair any defects within a specified period. This pledge is a “warranty,” and it is included as part of the purchase price. For example, a warranty might cover repairs or defects for the first three years or 36,000 miles.
Dealers typically offer warranties on new cars. However, some also offer them on newer, reconditioned used cars (often referred to as "certified used" cars).
How Service Contracts Work
A service contract, or "extended warranty," is separate, additional coverage that you elect to purchase. Unlike the vehicle warranty, it doesn’t automatically come with the car—you must pay for it.
It’s common to finance the coverage (roll it into your loan) when you buy the car, but it’s possible to purchase it from another company at a later date, too. If your vehicle is under warranty when you buy the service plan, it usually takes effect after the warranty expires.
What Are Some Common Reasons for Disputes Over Vehicle Warranties?
Disputes about vehicle warranties frequently come up. Many disputes arise due to a miscommunication or misunderstanding about the warranty’s terms and exactly what a warranty covers. For example, a consumer might not understand:
- the parts or services included in the warranty
- the duration of the coverage, or
- what conditions might void the warranty.
A dispute involving one of these issues is more likely to arise if the vehicle is new or has low mileage because the owner might have higher expectations for the standard of coverage.
Also, a dispute might happen if there is a delay in getting the vehicle repaired or if parts are unavailable. Supply chain issues, scheduling conflicts, or a lack of parts can all lead to delays, resulting in disputes over a perceived lack of support and reliability from the dealer or manufacturer concerning a warranty issue.
What Are Common Reasons for Denied Warranty Claims?
Vehicle warranty claims can be denied for several reasons, including:
- Failing to maintain the vehicle or not complying with the maintenance schedule, such as not doing oil changes, tire rotations, or scheduling other routine services as specified in the owner's manual.
- Using unauthorized parts or service providers. (Usually, you need to have an authorized dealer or service center perform any repairs or modifications, and they must use approved parts.)
- Misuse or abuse of the vehicle, including using the vehicle in a way that the manufacturer didn't intend, like going off-road in a car that isn't designed for that activity, racing, or overloading the vehicle beyond the recommended amount.
General Tips for Resolving Claim Disputes
When dealing with a warranty or service plan claim, the first thing you’ll want to do after a claim denial is to ask the dealer or plan administrator to provide you with the reason for the denial in writing. Because it’s important to create a document trail, your request should be in writing, too.
Once you know the reason for the claim denial, you might be able to dispute it by providing supporting documentation such as receipts and repair records. For example, if the warranty or service plan denies your claim because you didn’t properly maintain the vehicle, you can provide copies of documents such as timely oil changes and routine maintenance. Keep in mind that you can also propose a compromise, such as splitting the cost of the repair.
What Steps Should I Take If My Warranty Claim Is Denied?
In most cases, if your car is under warranty, you’ll have to take it to the dealer's service department for an assessment and repair. If the service department agent claims that the warranty doesn’t cover the repair, consider taking the following steps:
- Speak with the dealer service agent's supervisor.
- Take the car to another authorized dealer's service center.
If you can’t resolve the issue through one of these channels, the next step is to contact the vehicle manufacturer's warranty department. It’s important to realize that in rare cases, the manufacturer or dealer might still repair the car after the warranty expires, especially if a defect common to a particular make and model caused the problem.
How Can I Tell If My Warranty Claim Was Wrongfully Denied?
If you think your vehicle warranty claim was wrongfully denied, there are a few steps you can take to find out. First, carefully read through your warranty paperwork. Check to see what’s covered, what isn’t covered, and what you need to do to keep the warranty valid. Compare the details of your claim with these terms. If your claim is for something that isn’t covered, the denial might be valid even if you properly maintained the vehicle.
Next, gather all the documentation related to your claim, such as maintenance records, receipts, and any emails or letters from the dealer or manufacturer. These documents can help prove that you did everything required under the warranty.
Also, you might have another mechanic take a look at the vehicle. A different mechanic might confirm the issue and whether it’s under warranty. Consider talking to an attorney who can explain your rights and suggest the next steps you should take, like negotiating with the dealer or manufacturer after presenting your evidence or taking the case to small claims court.
What Documentation Do I Need to File a Warranty Claim Appeal?
Generally, you'll need to provide maintenance records, such as receipts or service records, and any correspondence with the dealer or manufacturer.
How Can I Win a Dispute Over a Denied Warranty Claim?
The steps for winning a dispute over a denied warranty claim are largely the same as for figuring out if your claim was wrongfully denied:
- review your warranty agreement to ensure your claim is valid
- organize your supporting documentation, including maintenance records, repair receipts, and any communications with the dealer or manufacturer, and
- consider getting an independent assessment from a different mechanic to provide an unbiased opinion on the defect and its coverage under the warranty.
Then, present this evidence to the ask for a reevaluation of your claim. If your claim is wrongfully denied again, you might consider filing a complaint with the appropriate agency, attending mediation or arbitration, or filing a case in court.
How Service Contract Claims Work
Your service contract will contain instructions for making a claim under the policy, as well as information about the overall process. For example, you’ll review your policy to determine the following:
- the person you should contact to authorize the repair (often called the “administrator”)
- shops allowed to make the repair
- the repairs covered by the plan
- actions that will void your claim (such as the use of non-covered parts)
- how to make a claim, and
- the steps to take to dispute a claim denial.
The procedures won’t be the same in every policy. For instance, in many cases, you’ll seek repair authorization from the plan administrator before you take the car to an approved mechanic. With other policies, the administrator will make a coverage determination after the dealer or authorized mechanic diagnoses the problem.
If you’re denied coverage under a dealer-serviced plan, you’ll follow the steps discussed above for resolving warranty claims. If your service plan is through another company, refer to your service agreement for your dispute rights.
Other Ways to Get Help With an Automotive Warranty Issue
Many states have programs designed to help consumers with automotive issues. In Ohio, for example, the Automotive Consumer Action Program provides mediation assistance for dealer disputes. In California, the Consumer Mediation Services Program helps new car owners resolve dealer disputes at no cost. To find a consumer protection organization in your state, visit the USA.gov site.
You might also consider filing a complaint with the Federal Trade Commission (FTC), the agency responsible for enforcing violations of automobile warranty laws. The FTC will conduct an investigation and, if appropriate, take measures against the plan provider, dealer, or manufacturer.
If you’re unable to resolve the matter, you might have to take legal action. Before doing so, it’s essential to determine whether you must file a complaint with a particular administrative agency (or use some other program) beforehand because if you fail to meet such a requirement, the judge will throw your case out of court. A practiced consumer lawyer is in the best position to advise you about the steps to take to enforce your rights.
