| Home | Contact Us | About Us |

Chapter 6: Manufacturer-Dealership Relationship • The manufacturer also creates a variety of bonus programs for dealers, based not on quality of product or service but on staying within the warranty repair budget. When the budget is exceeded, these bonuses are withheld from the dealership’s management. • 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. • 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. A vehicle is not necessarily a lemon just because something is wrong with it. It would be hard to find a car, motor home, or boat these days that doesn’t have something wrong with it. A vehicle is not a lemon just because it has a defect, but because it cannot be fixed. Manufacturers are responsible for the original defects, but the foregoing and other practices create an environment that actually discourages dealers from properly repairing vehicles under warranty. Warranty Repair Budgets Part of the contract between a manufacturer and a dealer lets the manufacturer select a warranty repair budget. The manufacturer unilaterally limits the dollar amount of warranty repairs for which it will reimburse the dealer, per month or per quarter. When this budget is exceeded, the dealership must absorb additional warranty repair costs.

Share |

Home | About | Contact | Feed Back| Site Map © 2009, LemonLawNewyork.info