“Sorry… It’s Out of Warranty”
a cooler. They felt this wasn’t a good sales technique.
For question #2, nearly all the
What’s Working forum participants felt that, since the original failure had to do with the loss of high range and reverse, the shop should have been more aggres- sive in its efforts to duplicate the con- dition. The suggestions included such things as: • Having the customer drive with one of the techs, because many times only the customer can make it act up.
• Getting the customer’s permis- sion to keep the truck for a few days and to drive it from time to time to give the shop ample opportunity to experience the problem, even if it meant to drive it home at night.
• When the pan was clean at 9000 miles, most felt it would have been wise to assume something was overlooked in the original repair. The shop should have done an internal inspection to confirm that the original problem and its cause had been fully addressed, and, if not, it should be taken care of under warranty.
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On question #3, while everyone
agreed the shop failed to properly repair the original problem and its cause, there were differing opinions regarding the shop’s liability. • The general thought was that a transmission should last beyond the warranty, and since the cus- tomer continued to raise a con- cern, the warranty period wasn’t a valid defense.
• Some thought the terms and con- ditions of the written warranty were a sufficient defense for the shop. The warranty was expired by time and mileage, so the shop was no longer obligated. Related to that, others thought the shop wasn’t obligated because nei- ther the customer nor the general repair shop contacted them before having the reman unit installed.
• On the other extreme, a number of the participants felt the shop was negligent and should give the refund; a couple thought they should even pay the $500.
The Ruling This case was arbitrated by a three-
person panel that included a retired judge who provided insight regarding warranty law. Honestly, we relied a great deal on his input in making the
decision. Our ruling directed the shop to refund the customer 80% of the price of the original repair plus $500 for the added inconvenience and expenses. The reason for this decision will
likely surprise you. It didn’t have to do with whether the original repair was done properly or whether the original shop acted in good faith. It had to do with the question of the “reasonable useful life” of a rebuilt transmission coupled with the fact that the written warranty had expired. Here are the key points. • The original transmission lasted 120,000 miles. While it isn’t rea- sonable to expect a rebuilt unit to last 120,000 miles, it is reason- able to expect it to last more than the 12,000 miles stipulated in the written warranty. Arbitrators are left with discretion in mak- ing these types of determinations, and we arrived at 50%, or 60,000 miles, as a reasonable useful life. The refund was based on 12,500 miles being about 20% of 60,000 miles, so the customer had received 20% of the value from the original repair.
• With respect to the terms and conditions of the written war- ranty, the ruling was that the war- ranty had expired and was of no
GEARS August 2012
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