Attention Manufacturers: You Can’t Cut Warranty But You Can Cut Warranty Costs Drastically

Why do you need to Offer Warranty?

Whenever you buy a vehicle, the law of the land gives you certain rights. The first of these is the right attached to the purchase of goods or services. Goods include vehicles as well as trailers. The guarantee to a consumer in respect of any vehicle or trailer is irrespective of the warranty offered by the manufacturer. Such guarantee is for both new and used vehicles and is applicable for a reasonable length of time after the vehicle has been purchased. The guarantee runs long even if the warranty ends. Generally speaking, this form of guarantee ensures that your vehicle is of an acceptable standard, fit for use on road, has the spares and repairs necessary and fulfills the promises made by the manufacturer in respect of the quality and performance standards of the vehicle.

Over and above this guarantee, manufacturers provide warranty. This warranty gives you the right to free repairs, replacements and services for a certain length of time and mileage. Manufacturers ensure accurate warranty claim management once the vehicle is in production. But by keeping warranty claims come down impressively, manufacturers can increase profitability.

Reducing Warranty Claims Dramatically

Manufacturers today are squeezed between a competitive market, shrinking economy and reduced profit margins. There is a dire need to cut costs. However, it is seen that mere downsizing ends up cutting productivity. Warranty claim rates have a direct bearing with annual expenses. An efficient warranty claim management will therefore yield greater profits. Research has shown that one of the best ways to reduce warranty claims is by improving the quality of the product. It has been found that such an improvement results in improved customer goodwill and confidence.

Product Reliability

Improved product reliability is better achieved with thorough testing. This does not necessarily mean an increase in either cost or the time taken to put the product out in the market. Such tests happen before the product reaches the market. Automobile engineers today create harsh conditions under which the vehicle is put to rigorous testing. The scope of such testing is always far beyond the accepted design criteria. This is the best way to create failures and find out the weak areas in the design of the vehicle. Manufacturers find it far less expensive to carry out these tests and alter the design of the vehicle before it hits the market. The obvious advantage of this exercise is a product that is far more robust and durable. Such products last far longer, and thereby help in cutting down the expenses from reduced warranty claims administrator. The other interesting point is that this form of reliability testing is always in an accelerated envelope and this, reduces the time taken for the product to reach the market.

Reliability testing is a key weapon in the hands of manufacturers fighting warranty costs. When you improve the reliability of a vehicle, you gain customer loyalty.