Fixed Ops Magazine - 2020 Vol17 06 - 48

SERV IC E D E PARTME NT

ANNUAL
WARRANTY
LABOR RATE
INCREASE
Statutory or Factory Submission?

E

very year, as dealers begin to work on their

is submitting for a labor rate increase should be evalu-

annual labor rate submissions, many are quick

ating its factory protocol and its statutory protocol to

to grab their policies and procedures manuals

determine which is most advantageous. 

to get started. For most, it's a process that may involve filling out a competitive survey, producing a certain amount of consecutive qualified repair orders, or
a combination of the two. Does this process yield as
much of an increase as the dealership wants or is entitled to receive? Many times, the answer is no. 
Most dealers are surprised to learn
that a factory submission isn't their

FACTORY SUBMISSIONS
The guidelines for a factory labor submission are different for each manufacturer and can typically be found
in your policies and procedures manual. The process
can be as simple as filling out a competitive survey

Any dealer who is

or as arduous as producing 100
sequential qualified repair orders.

only choice. In fact, 48 states have

submitting for a labor

Most manufacturers will require a

some type of legislation in place

rate increase should

tain amount of qualified repair or-

that allows dealers to perform a
statutory labor submission. The purpose of a statutory submission is
for a dealer to achieve warranty labor compensation at its retail rate,
which is a market driven rate based
on its warranty-like customer-pay
repair transactions. Any dealer who

48

combination of a survey and a cer-

be evaluating its

ders. In some cases, it's a quick and

factory protocol and

and wait for a response. While this

simple process to request your rate

its statutory protocol

process may seem enticing, there

to determine which is

submission. First, your manufacturer

most advantageous.

are some pitfalls to filing a factory
is not required to respond in a certain time frame. Many dealers have



Fixed Ops Magazine - 2020 Vol17 06

Table of Contents for the Digital Edition of Fixed Ops Magazine - 2020 Vol17 06

Fixed Ops Magazine - 2020 Vol17 06 - 1
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Fixed Ops Magazine - 2020 Vol17 06 - 48
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