GM’s New Option C Warranty Reimbursement Rate
The Warranty Reimbursement Rate can vary widely from manufacturer to manufacturer. If you’re wondering if your dealership is charging too much for parts, consider these tips. First, understand the difference between the reimbursement rate for parts and labor and the markup allowed by manufacturers. Then, understand how to submit the reimbursement request to the manufacturer. Ultimately, a reimbursement rate is a percentage of the cost of repair. In other words, it’s the difference between charging too much and getting paid too little.
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GM’s current retail parts and labor rate
If you’re a dealership, you can use the GM’s current retail parts and labor rates to make more money. Dealerships are required to perform warranty repairs on qualified vehicles and follow the Service Manual, but they also get a little extra money from the manufacturer. GM reimburses dealers in North America for warranty repairs using a uniform methodology. Hourly labor rates are multiplied by GM’s current retail parts and labor rate guidelines, and the result is the total amount the dealer gets reimbursed for a particular repair.
While the policy may seem like an unnecessary burden, dealers should take note of the terms and conditions of the agreement. GM’s current retail parts and labor rate is more than enough to cover the costs of warranty repairs. Dealers will still need to negotiate with GM’s warranty provider to secure the best deal for their customers. They can either work directly with GM or go through their preferred dealership. If the dealer agrees to work directly with GM, the process can be very smooth.
GM’s current retail parts and labor rates have caused some confusion in the industry. The current retail parts and labor rate is based on the average rate charged by dealers. If the repair is a warranty repair, the dealer’s labor rate is calculated based on the average labor rate for all warranty repairs in the dealership. Dealers also need to follow the GM’s guidelines on labor reimbursement. The difference between the two rates is the effective labor rate.
GM’s option C
GM’s new policy effectively makes its customers ineligible for the contractually-based Option C warranty reimbursement rate. The decision violates Section 9(a)(3) of the Board of Vehicles Act and consumers’ statutory rights to warranty labor and parts. This ruling will likely have an important impact on future negotiations. But before the decision is final, it is important to understand how the new policy will affect consumers.
The change in the warranty reimbursement rate by General Motors took effect in 2012. This means that GM will no longer offer CPI-based labor reimbursement to its dealers. Instead, they will have to accept a retail reimbursement rate for warranty labor. The cost recovery surcharge will increase by 2.5% every year and the reimbursement rate will remain at the standard retail rate. Dealers must be aware of the change in order to comply with the new policy.
The Board erred in interpreting the basis for GM’s conversion of labor rate reimbursement to Option C. GM was not seeking to invoke section 9(a)(3) of the Act. Rather, the car maker was proceeding under the terms of the contract with the Protesting Dealers. In other words, the contract defines Option C, not the Act. If the contract outlines the criteria for Option C, the dealership may have to follow it.
GM’s request for additional repair order documentation
GM has released a spreadsheet listing the supported vehicles for which a scan is required. It’s worth noting that the average repaired vehicle is approximately six to seven years old. In contrast, the average vehicle on the road is 11.5 years old. GM’s scan software is available for vehicles as old as 2007 and extends back to 2009. Without the scan, you could risk causing additional damage to your vehicle, even if you only make minor repairs like replacing glass or body panels. Even a battery disconnect will require a scan.
The NCRS National Convention has delayed the processing of Shipping Data Reports for GM vehicles. This convention also delays the arrival of the mail across the U.S., which may be an issue. GM’s request for additional repair order documentation is a necessary part of the process, but not an absolute requirement. This is why GM has cited several reasons for its request. However, the NCRS’s summary of the petition isn’t intended to represent the views of the Agency.