The Warranty on Your New Car May Be Less Than You Were Promised

There’s a very good chance that the warranty on your new car is for a shorter time than you thought. This likelihood is much greater since the COVID crisis precipitated the microchip and other parts shortages, limiting production while consumer demand and prices climbed to all-time highs.

 
The featured Op-ed story in a recent Automotive News (the auto industries trade journal) was entitled “Yes, a car must be delivered to count as sold.” What the editor of this op-ed was alluding to was that many car dealers are lying to their manufacturers about the number of cars they’re truly selling, in order to “earn” more production from the manufacturer than they are entitled to. All auto manufacturers calculate the number of cars they sell and ship to each dealer by the number of cars that dealer “sells”. The only way that a manufacturer knows that a car is sold by a particular dealer is when that dealer emails his retail daily reports (RDR’s) which include the customer’s name and VIN of the vehicle purchased. It’s important that dealers report sales every day for any vehicles he sells, because a replacement vehicle is then shipped immediately.

 
Most dealers, most of the time, have falsified these Retail Sales Reports to get new inventory ahead of their competitive dealers, especially with high demand/low supply vehicles… like the Corvette, Subaru WRX, and most hybrids. Most dealers have always reported these sold, whether they were or not as soon as they learned the VIN. This deception is motivated purely by greed to receive new cars the dealer is not entitled to because the factory believed the dealer was really selling and delivering them to a buyer. The car may not be truly sold for weeks or months after its reported sold to the manufacturer.

 
The big problem for the real car buyers with all of this is that the manufacturer began the “new car warranty clock” ticking as soon as they received the dealers bogus retail sales report. If you bought one of those, and it’s very likely you might have, your new car warranty will actually end days, weeks, or even months before what your new car warranty promises. If you had a transmission problem today and you supposedly had a 5 year/50,000-mile warranty, you’d have to pay out-of-pocket because the dealer had lied to his manufacturer about the true sale date, weeks, or months earlier.

 
Your best protection against this is to ask the dealer, before you pay for the car, to show you the dated retail sales report he sent to his manufacturer. That date should match the day you take your new car home. If it doesn’t, your options are several. You can insist that he correct this false report to show the current date. He may be reluctant to do this because the manufacturer will penalize his new car allocation based to bogus sales reporting. You can contact the manufacturer directly and expose the dealer’s deception. Of course, you can simply refuse to buy the car. A final option would be to get a written commitment from the dealer to repair anything that should have been covered by warranty that wasn’t because of his deception. Remember that this commitment would be good only for this specific dealer. If you were out-of-state and had to go do a different dealer, you’d be out of luck.