Kelly’s Korner
Q. Our store has a 90-day warranty on the vehicle’s power train components. What is our liability when we do additional repairs?
A. If your dealership pays for additional repairs after the delivery as a goodwill gesture, you could be opening the door that leads to implied warranties. Since customers cannot waive their rights, you may want to revisit your individual policy about these circumstances. Consult the Magnuson Moss Act of 1975, Federal Trade Commission (FTC) rulings, and your dealership’s attorney for specific guidance on this issue.
Many dealerships offer a limited power train warranty on used inventory. It is a great selling tool and can relieve the customer’s anxiety about a previously owned vehicle. Exact coverage should be identified on the buyer’s guide, and the guide should be completely filled out and posted on each piece of retail inventory.
Incomplete and improper buyer’s guides expose dealerships to FTC fines at $11,000 per violation, per day. Lax policies could be a very expensive lesson, one that can be avoided by inspecting the windows of your inventory. Are the buyer’s guides correctly written and properly posted? Contact your state association to order these forms and learn how to use them.
OIADA Squeaky Wheel Newsletter, September 2004, p. 20