Warranty Expert Reveals: The #1 Mistake Dealers Make

Manufacturers are tightening warranty 0:00

Steve Shaw: Here we go again. Dave Rogers, what is on your mind tonight?

Dave Rogers: How you doing there, Steve Shaw? On my mind tonight is the most exciting subject ever in fixed ops: warranty.

Steve Shaw: Warranty? That's amazing. We must be on the same page, because I brought Ms. Haworth to our podcast today. Janet and I go back many, many moons, let's put it that way. And she just might be the number one warranty person in the world. Let's call her that: the top warranty person in the world.

So I want to introduce you to Janet Haworth. Janet, what's on your mind? What's going on in the warranty world? We'll talk about you and how great you are as we go. But what kind of trends are you seeing?

Janet Haworth: I'm finding that the OEMs are getting a lot more strict. Things that normally would not be a problem are coming back, and they're asking for more information. If you don't have your t's crossed and your i's dotted, you

can get charged back or audited or whatever. So the whole point is that we now have to put a lot more information in to get claims paid and have them stay paid.

Steve Shaw: Is it taking more time? What are you seeing with the dealerships? How are they responding?

Janet Haworth: Here's the thing with the dealerships. They're so used to the old-school way. It's a matter of going in and retraining them: "I know this is what you were used to, but this is not reality anymore. You need to have more information."

Dave Rogers: You do all different brands, right? Not just one. My experience has always been that with the domestics, the Chryslers, the GMs, the Fords, it was beaten into those service departments and service managers at a very young age. They were usually pretty good. It's a lot of the import lines, the Japanese imports in particular, that were very lax for years and years, because they didn't have as many warranty issues.

Are you seeing that across the board? I don't know if you do Europeans, but I noticed a lot of the import managers couldn't figure out warranty because they didn't have much of it.

Janet Haworth: We do. I just had to learn a German brand, and let me tell you, compared to Ford, or Kia and Hyundai and Toyota, which I've also done, it's a whole new world.

Dave Rogers: It's tough. It's a different world.

Janet Haworth: It's a different world. Once you figure it out... but getting the information to know what to do is harder. I was lucky. My company paid for me to go train with somebody who did that franchise. And even after training, I came back going, "What the heck?" I'm not stupid. It's not that I'm not smart. You just have to figure out where to look, and it's not as easy.

Hyundai is pretty much black and white. And then, like you said, the domestics have a lot more gray area. But that gray area is tightening up.

Why claims are harder to get paid 3:45

Dave Rogers: Well, I'm not going to defend the manufacturers, because I know what they're doing. They're trying to get money back for tariffs. They're trying to get money back for a lot of things. History: in the early 2000s, General Motors had that problem with the ignition switches, and they covered it up by not

releasing new part numbers. They kept changing the part without changing the part number, so it wasn't reported to NHTSA. Since then, they sued GM for bazillions of dollars, and I've heard of other manufacturers losing a lot of money, because

the government has tightened down on the reporting. They have to report VINs, op codes, failed part numbers and replacement parts to the government now. So I think they're retaliating against the dealers, because we're sloppy. Listen, if they can charge you back and not pay you, it's probably a win on their end, because they save some money. But I've noticed in the last ten years it's gotten a hell of a lot harder to get a claim paid.

Janet Haworth: It's almost brain damage. Things that used to be so simple are now insane, including recalls. I just remembered the dirt with Ford. Remember all the ones they had for the latches? Dealers were getting charged back and technicians blacklisted, because they said they replaced the rear latch and they didn't. So now, just to fix it, we sign off on the hard copy.

I could sign off on hard copies all day long, but that doesn't mean we actually did it. It's crazy.

Dave Rogers: It just seems like an overreaction to government regulations again.

Janet Haworth: And I've never seen so many updates in all franchises: updating PCMs, modules. It's constant recalls and repairs on that, like I've never seen before.

Steve Shaw: I can attest to that on my '25 wagon here. There must be ten of them. And every time it doesn't connect right, they say, "Oh, now you can do your own update." I'm like, I'm not doing my own update.

Janet Haworth: Right, they have that now in some franchises. It's crazy.

Dave Rogers: I get that with my Dodge. Every once in a while I can update it in the driveway. It's nice.

Steve Shaw: I'm pretty sure I'm not going to do that. I don't do self-checkout and I'm not doing a self-update, I can assure you.

Janet Haworth: Come on, Dave, we know Steve. He's not going to do shit.

Dave Rogers: Yeah, I know he's not doing it. Hey, I don't know if you've seen this yourself, but one of the other things I've heard is that the manufacturers are using AI to screen claims. And I know of a couple of instances where they've used AI to review the pictures uploaded for digital documentation, and they've caught dealerships reusing the same picture over and over for repairs. Now they're using AI for this stuff,

because dealers have been doing shady shit. But the AI keeps getting better, and you can't get away with it. The AI screens the claim and looks at the pictures. Have you seen anything like that yourself?

Janet Haworth: Yes. Not on reusing the pictures, but on certain manufacturers now, on oil leaks and stuff like that, you have to have pictures before you can do the repair. With Hyundai and Kia, you're supposed to take a picture of the VIN plate and the miles with your picture. So they're trying to make sure of that. But the AI is driving me nuts, because I see claims come back and I'm like, "Did you not read the story?"

How Janet audits a store's warranty 7:27

Steve Shaw: So what do you tell dealers? We go back a long way, and you do some consulting. You go in and help dealers out. How do you help them through these things? I know you don't really sugarcoat much. What do you say when you go into stores that are having problems, or that just want to protect themselves?

Janet Haworth: When I go in, I have them give me some repair orders and I audit them. I make sure the add-on lines are signed. I do all that. I read the stories. Ford is my golden child, but I know the others, and warranty is warranty. After I read those, I go talk to the advisors. There are all these new prior approvals and that kind of stuff.

"Listen, this is what I need your story to say. If it's a parts warranty, you need to tell me before we process it," all that stuff. And then I actually have a meeting with the technicians. I sit down with them and say, "Listen, I'm not here to take your money away. I'm here so you can keep your money or make more money.

This is what I need from you. If you do a pinpoint test, you need to tell me what test you did and what the results were. A pinpoint test might be three tenths, but I can get you more time if it's an extensive pinpoint test." There are ways, but you have to have the information for us to pay you. So I go in, read their stories, and tell them how they can improve them and keep their money. And then I work with the parts department on that too.

Steve Shaw: If I'm a technician, what kind of details would I need to add to my story to get that extra diagnostic time?

Janet Haworth: Well, if you did a PID monitor, a road test, an ignition check, whatever it is, depending on the repair, I tell them to put that in there and you get it. You can get the 1260D55, the D80 for the PID monitor, the D81 if you did a road test. And if you did a road test, make sure you update your miles, because Ford, Mercedes and other franchises know that if your mileage doesn't change, why am I paying you for a road test?

Simple things like that are what I have to explain to them.

Story-writing software and AI 9:48

Steve Shaw: Right, exactly. Dave, you talked about this before. There was some guy who came out with an AI story writer. What's that one, Tech Workbench? PencilWrench. This is a shameless plug, and we're not getting paid for it, but does a PencilWrench type of software help when it comes to this?

Janet Haworth: Yes. Manufacturers don't like it.

They don't like it because they think you're building your story and not actually doing the repair. But in reality you are, because they can tell now. Here's the thing: they're logged in, and they can see whether you connected your IDS or your GFF, whatever it is, to the vehicle. It's not just going by your word anymore. They know if you did it or not.

Steve Shaw: Like one of those software tools...

Janet Haworth: Yes. And it tells you: Pinpoint Test A1, if the answer is yes, you go to two, and now tell me the pressure, if you did some kind of pressure reading. It walks you through it, because it already knows what the workshop manual says. You have to plug in the information, though.

Dave Rogers: Again, it's getting more and more detailed. They don't want to pay, or their feet are being held to the fire because of the government, and they're looking for all this extra information. We actually heard about PencilWrench from one of the manufacturers, who recommended it because they wanted us to keep the money, or they wanted to submit it to Germany or Japan and get it paid. Years ago,

Toyota USA used to bill Japan for the warranty work. Nissan USA used to bill Japan for the warranty work. I think the same thing happened with Volkswagen.

Janet Haworth: Nissan was my first warranty, by the way.

Dave Rogers: So they wanted to get their money and keep it, and they would coach you along. But

the technicians... Steve, we've talked about this. I think we've got to get to the point where they can just talk into the phone or a headset and have it put the writing in. I've heard of a couple of them. Steve and I had the idea about six months ago on a podcast, and now somebody stole it. We didn't trademark it in time. That's what happened.

Janet Haworth: There are companies out there building that.

Steve Shaw: We're always coming up with good ideas.

Janet Haworth: I know, but I know a few people I've worked with in the industry who are building exactly that. Everything is AI. They even have it now where a customer can have their whole repair order written up before they come in.

Steve Shaw: Oh, wow. A guy reached out to me after that podcast, around NADA. Maybe Dave Anderson introduced me, I forget. Somebody said they're working on a tool where a tech could just read their story into it. I use Wispr Flow, a software on my computer. I hit the button and talk, and it types for me. I could do an email or a text message that way

on my PC. So it would be amazing if there was AI software that could guide me to a better story. What else? You were getting ready to talk about parts.

Parts charges and running time 13:26

Janet Haworth: I'm sorry, we have thunder here, so if you see me turning my head, I'm just making sure I don't have trees flying by my window.

So parts. I work with them, because they have to have all the parts charged out. You want to make sure the one-time-use parts are charged out, because claims can get kicked for that. You want to make sure the pricing is right, especially in certain states. On things like the APIMs, the radios, it's an exchange. But in the state of California, you get markup on exchanges. I had a store that didn't even know that, and on the hybrid batteries they were losing almost

a thousand dollars a battery. Now they're doing it. It's just going in, tweaking it and giving them a little more information.

Steve Shaw: That's awesome. What else? What are some things you're seeing that cost people money? What's the big thing?

Janet Haworth: Not running time. Certain manufacturers say you need 80% time. With Ford, you don't have to have time unless it's straight time. But half the op codes don't exist, so you should still be running time no matter what.

Some need 100%. Some only need half, 50%. I think Kia and Hyundai are only 50%. So I teach them that no matter what, you still need to run your time.

Dave Rogers: And just so you know, a lot of that isn't in writing either. It's like urban legend. You almost have to get audited, or hear about someone getting audited, before you find out what the rules are. Years ago, Chrysler published that they wanted you at least at 75% of the time, but most of them don't publish it. They don't even tell you what the rules are. It's a very subjective basis they use to charge you back, too.

Janet Haworth: Right. And then, you want to know what causes me brain damage?

Certain manufacturers... let's just say I replaced a water pump. I'm pulling information out of my butt. They have these folders with drop-downs: you can get more. Did you do an oil change? Did you do a coolant leak test? Did you do this? Did you do that? You can get extra time if you take the time to tell me your steps. But the techs just want to say, "I replaced this." And you're losing a half hour to three hours because you're not itemizing what you

did. And they say, "Well, it's a waste of my time," and I'm like, you're throwing away money.

Steve Shaw: Is that resistance from the technicians, saying it's not worth their time to write the story up?

Janet Haworth: Yes. "I'm too busy." You're too busy to make money? "Well, I'll make money on something else." When I hear that, I just go, oh my God. And I can tell you, by the time I'm done with them, they're doing what I asked them to do.

Steve Shaw: Well, it all comes down to that almighty dollar. If I lost three tenths, okay, big deal, that's a multi-point. But if I lost three hours, all of a sudden that's real money.

Janet Haworth: Do you remember that one technician, I'm not even going to say the name, who would fight with me over one tenth? I'm like, "Here's a dollar. You just wasted a half hour over one tenth. Here's a dollar, go away." You have those too.

Steve Shaw: Sometimes you've got to pick your battles.

Janet Haworth: Right. But I also really encourage... for my company, because we're so small, I tell them, "You've got questions, call me." I get phone calls all the time from technicians and service advisors, because when you go to the third-party companies, you don't get to talk to people.

And that's why dealers want in-house warranty admins: they don't have anyone they can talk to. But with in-house, you're paying insurance, you're paying workers' comp, all those hidden things you don't pay when you hire an outside company. And I make it very important that my employees are open and able to talk to their dealers, because we need to answer their questions. We may think a question is silly, but they don't know, and that's our job.

I get calls all the time: "Hey, I had to do this three times. Do I use the op code three times?" "No, you use it once and run straight time for the other two. But explain to me why you did that. I need details." And he says, "Thank you." How simple was that?

Documentation, not conversation 17:53

Steve Shaw: It sounds like the clock is your friend.

Janet Haworth: It is.

Dave Rogers: We used to have warranty classes with Chrysler. You'd go to the region and sit there, and they'd bring in one of the auditors. There was one auditor in the Northeast who was legendary for not giving a shit. She charged it back, and her thing was, "Documentation, not conversation." That's what she'd say.

"I don't want to hear about it. I want you to write it down, the first time. When I'm there to audit you, I don't want to hear your bullshit. I want to read it, and I want to judge it on what's written." That's the way they look at it. So it's teaching technicians that they have to write this stuff down.

They have a sense of pride in their workmanship: "Hey, if I said I did it, I did it. You should believe me." We've all had that tech. Like you said, I've had techs for whom it wasn't worth two tenths to write it down. You couldn't write down the air conditioning for two tenths?

Janet Haworth: Here's my favorite. They put the op codes in, like you said, AC or running boards or whatever, and I'm like, "Does it say that in your story? No? Then I'm not paying you." When I was in-house, I was a witch with a B. I'd tell you three times, and after the third, I'm taking your money away.

Steve Shaw: You're more generous than me. I'd generally tell you two times.

Janet Haworth: And then they say, "I didn't write it up." I'm like, "Is your name on it? Yes. Are you getting paid for it? Yes. Then I don't give a shit. It's yours."

Steve Shaw: Going back to the previous conversation about op codes, I came from GM, and I was very good at GM warranty. GM warranty was easy. It was "replace transmission," and back in the day you got five hours. Then I went to work at Ford, and it's "take transmission out of car, mount transmission on bench, drain..." Oh my God, the brain damage, going through each and every step.

I had to learn that as a Ford manager when I moved from GM to Ford Motor Company. A lot of new things. But you know what I did, and I'd hope people do it, and I know Mr. Rogers over here has done it a thousand times with every manufacturer: I read the policy and procedure manual. Dave talks about that. I think it's important to actually read the P&P and the warranty manual so people understand

how things actually work, especially in the store as an advisor, technician or manager.

Janet Haworth: It's brain damage when they don't.

Dave Rogers: Now it's a lot easier. You just download it to your desktop and search by word in Adobe. We used to have to read a book five inches thick. At my first service manager job, I sat down at the desk: what do I do first? My boss came walking into my office, threw it on my desk and said, "Read this." I'm like, "Read what?"

Learning warranty the hard way 21:07

Janet Haworth: Do you remember the manuals that were this thick, and the labor time books and the TC books, and you'd have to replace them and update them? I had muscles back then.

Dave Rogers: You couldn't search online. There was no online. You had to physically go looking for this stuff. It was crazy.

Janet Haworth: But you know what, that's how I learned my job. I'm grateful for that, because it made me smarter.

Dave Rogers: When I was first a technician, I was at a big Chevy store with about forty techs. The warranty administrator was an ex-Marine, this guy Rich. You'd turn in your paperwork, get your next job, and you'd be walking across the shop when all of a sudden you'd hear, "Dave Rogers, dial 212," whatever it was. You're like, "Shit, here we go."

You'd pick up the phone: "Yeah, Rich?" "Let me ask you a question, Mr. Rogers." You'd get drilled like a drill sergeant. "Did you replace the glove box door hinge?" "Yes." "How did you get to that glove box?" He would grill you. "Well, maybe if you wrote it on the back of the RO, we'd know these things. Come back, get the repair order and rewrite it." You know what? After a while, you got it.

You knew. We used to have to write down the trim codes on the GMs that had the plate on the front. You didn't know what half of it meant, but you had to know if it had column steering, a column shifter or a floor shifter, and write all this stuff down. It was brutal. But that's how I learned.

Steve Shaw: Remember the good old days? I remember working at the Toyota Dodge dealer, and after hours we'd have to go back into the little room and key it all in. They made us do that. We were a small store, so we didn't have a warranty administrator. We had to do everything ourselves back there in 1990-whatever.

Janet Haworth: Telling everyone how old we are. Be careful.

Dave Rogers: Everybody knows.

Steve Shaw: That's half the game. We've been around.

Janet Haworth: But I need to be honest. Like I said, it's not that I'm smarter. It's just that it helped me as I got older and I've been

at it longer. I see these people coming in who maybe only have four or five years. I'm not saying they don't know what they're doing, but you don't understand what you really need to do. You're missing that. Back then, like you said, I had to handwrite my tickets. I had to do the cost. I had the lick-and-stick flag sheets. I had to balance those flag sheets. Somebody had to come put it in manually. I remember that. But that is how I learned.

Steve Shaw: Well, that's what we talk about: doing the work. We always make fun of the new people who started yesterday and want to be CEO tomorrow. You've got to put in the work. Having that background and experience... to this day, I don't really consult that much, but if I'm in a store, I want lick-and-stick flags on my repair orders. I want the technicians to have them.

You can't take that away from me.

Dave Rogers: That's funny.

Steve Shaw: I love that stuff. I'd have a manual route sheet. I'd have it all manual, because I'm old.

Janet Haworth: Yeah, you did. It's so funny, because Steve is all about reports and computers and stuff. But Dave, as smart as I am, when it comes to computer technology I have to be one of the stupidest people on this planet.

Dave Rogers: That's okay. You just need to know how that one system works. You just need to get the claim in.

Janet Haworth: Just show me how it works. Don't make me learn it myself. Walk me through it and then go away.

AI and video inspections 25:02

Steve Shaw: Well, Dave is in the store as a fixed ops director, so he's got to be attuned to thirty different auto manufacturers. My job is to teach people how to sell things. But you're in there, and you've got to know all those things, and there's a limited amount of time. I think there's a great reason for AI and those types of tools.

And I love the idea. But it works both ways. On the positive side, Dave, weren't you and I talking about using ChatGPT for your story? If I'm a Ford technician and I enter my prompt, "I'm a Ford tech, I replaced the transmission, what are the steps in doing that?" That could be helpful to a technician, I'm assuming.

Janet Haworth: Which is what I'm going to do.

Dave Rogers: Absolutely. I know there are people in my stores using ChatGPT to write stories or help write stories. I think it's just going to get better and better.

There are people out there trying to use AI to anticipate. I actually saw it in CDK today. It's starting to anticipate recommendations for service work on cars, popping up in CDK service. There's also software out there trying to do predictive everything. It's not going to be long.

Janet Haworth: I know they're really pushing the virtual multi-point inspections. I'm not going to mention the franchise, but with one, if it's a mobile repair or a pickup and delivery, the technician has to introduce himself, do the whole thing, under the hood, the interior, all of it, and it goes to the customer. And it helps.

As a customer... okay, I've been doing warranty for years, but if I looked underneath a car, I wouldn't know what crap it is. But if someone shows me a picture and says, "Look, can you see where this is leaking?"

instead of just taking their word for it... I find that really interesting. I just took a class on it today, and I thought, that is actually really smart. I wish they'd had that years ago. AI and the virtual stuff are just amazing to me.

Steve Shaw: It is. And you were in class, so you missed our podcast that came out today. That's what we were talking about: reinventing the video multi-point inspection. Dave and I both have very strong opinions on how it should be done in the store.

Janet Haworth: Well, the dealers are making it mandatory. They're grading their advisors and their managers on whether their technicians are using it.

Dave Rogers: I think a lot of people are drinking the Kool-Aid a little bit, like we talked about, with these three- to five-minute videos. That's a whole lot of extra work the manufacturers are trying to shove down our throats. I think a technician showing a video of what the car needs is awesome. There's an oil leak, rear brakes, your tires, whatever the case is. That's visual evidence, transparency, whatever you want to call it. But

I don't know that they need to be taking three- and five-minute videos.

Janet Haworth: No, but I also think multi-point inspections are a big deal, and Steve used to get on people's cases all the time. Let's be real: it's upsell. If you're not doing a multi-point inspection, you're an idiot, because you know you're going to upsell something.

Dave Rogers: He still does.

Steve Shaw: Janet, I'm the kinder, gentler Steve Shaw. When we worked together, I remember having the conversation that it is a condition of employment, because we used the whiz-bang multi-point inspection tool. But like I said, I'm the kinder, gentler Steve Shaw now, not the real jerk I was way back in the day.

Janet Haworth: Really? You should have heard some of the conversations he and I used to have, Dave. I used to say, "Oh my God, if you don't shut up, I'm going to kill you. Listen to what I'm telling you."

Four things a GM can do now 29:28

Steve Shaw: We're both hardheaded. So Janet, we're going to wrap up in a second. Dave always wraps us up with a GM tip of the day. But if I'm a GM listening right now, what's the most important thing, or the one, two or three things, you'd tell me to make sure claims get paid, prevent audits, and keep my money?

Janet Haworth: One, have your manager review all repair orders and sign them. Two, make sure your technicians are thoroughly trained on how to write the three C's. That's a big deal. I had a meeting today where they wrote, "It doesn't work." Well, that doesn't work for me either. I need to know what's wrong. And three, make sure you're tracking your schedule and not letting things get out of hand.

Steve Shaw: Track your schedule. That is a novel concept.

Janet Haworth: Oh, and work in process. Let's make it four. Go over work in process at least once a week with each writer. They need it.

Dave Rogers: There you go. I like it.

Steve Shaw: Absolutely. Dave, you want to wrap us up with the GM tip of the day?

Dave Rogers: Well, I think Janet gave the GM tip of the day, and I'll repeat it. Make sure you touch base on those four items. Don't leave anything to chance. And trust but verify. Start looking into these things, get your hands dirty and look at them yourself. Those four areas to focus on are very strong, and I think that's great advice, Janet. Perfect.

Janet Haworth: Thank you.

Steve Shaw: Well, Janet, you know I love you. I wish we talked more offline. Tell everybody how they can reach out to you, and I'll put it in the show notes as well.

Janet Haworth: Oh gosh, didn't I just tell you what my email was? I don't remember what my email is. I thought I told you.

Steve Shaw: That's all right. I'll put it in the show notes.

Janet Haworth: That's how sad it is. I just made my own new email. But you can find us on LinkedIn. We're called Rainmaker LLC. Yeah, I'm an LLC now, Steve.

Steve Shaw: Rainmaker LLC, Janet Haworth, the best warranty person on the planet. And I'd say this with all my heart to anybody listening, all of you: we're almost at 3,600 subscribers right now. We are killing it. So call Janet if you need help getting your warranty in a row. Janet is the bomb, I can attest to that. Janet, thank you so much. I love you,

and I appreciate having you on our podcast. I look forward to seeing you soon. I can't wait.

Janet Haworth: I'm coming to see you, buddy. And Dave, it's so nice to meet you, and I'm sorry, but that's just what it is. Take care.

Dave Rogers: It's all right. It's great meeting you.

Steve Shaw: It's all good. Dave, I'll catch up with you next week. See you guys.

Dave Rogers: Yep.

Janet Haworth: Bye.