Chapter 6 Manufacturer - Dealer Relationship

When you buy a car you enter into a relationship with the manufacturer and the dealership. You better know the rules of the game!

You need to understand how dealerships and manufacturers work together and how it affects you; it could save you a lot of grief.

A vehicle is not a lemon just because it has defects, but because it cannot be fixed. Manufacturers are responsible for the defects. Dealerships are responsible for repairs. Unfortunately business practices and warranty relationships create an environment that discourages proper repair of vehicles under warranty and beyond.

The Games Manufacturers and Dealerships Play

In American business, the bottom line is profit. Both manufacturers and dealerships must make money. Many things interfere with this goal.
• The manufacturer is producing large numbers of defective products. The dealer can't change this. We can show you how it happens. It's not an accident.
• Learn how the manufacturer sets a warranty repair budget for the dealership, and how when the budget is depleted, the dealership is penalized. For example, the dealership may have to eat repair costs. Find out how these costs are passed on to the consumer.
• The manufacturer creates bonus programs for dealerships. They aren't based not on quality of product or service, but on staying within the warranty repair budget. When the budget is exceeded, what do you think happens to bonuses?
• Manufacturers create games where the "winner" is the dealership with the lowest number of hours billed for warranty repairs over the game period, typically a month or a business quarter. This kind of incentive drives dealerships to cut corners.

This is important! Find out how manufacturers create arbitrary time limits for warranty repairs. The dealership and its technicians have no incentive to take their time with repairs. Indeed, they have every incentive to go as fast as possible. Find out how this affects you.

Did you know about Secret Warranties? You should! It could save you a lot of money.

In the wars between manufacturers and dealerships the consumer is the loser. But there are ways to win. You can read about them in Chapter 6.

The Technician Flat-Rate Pay System

It might not seem like it, but this terrible system has a lot to do with you getting poor repairs at the dealership. Find out how this works in this chapter.

Recalls & TSB's

If you don't think these affect you, remember the Ford Pinto. Chapter 6 covers a lot of ground and all of it is worth knowing.

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