Insurance: That other insurance – Extended warranties
DON MILLS, Ont. – The folks at Webster’s are not without a sense of irony. They list the word grumble just slightly above the word guarantee, which they consider synonymous with warranty.
While the three often go together in the trucking community, the high costs associated with repairs, to say nothing of the resulting downtime, have made extended warranties a common spec among today’s truck buyers. Extended warranties have become a form of insurance no less important than the kind you buy from your broker – they are just a little more specific in wording and offer slightly different protection.
According to Paul Shermet, fleet manager of Canada Cartage Systems, a fleet passing on the opportunity to buy more protection does so at extreme peril.
“Sooner or later every manufacturer takes a turn messing up its perfectly reliable product,” he boldly states. He wonders how many of his cohorts in the industry could survive a fleet-wide gaggle of gremlins?
How many trucks did you buy last year? Whether the answer is one or 1,001, how do you think you’d fare if each suddenly needed $5,000 of unbudgeted repair work?
Fortunately almost every major manufacturer offers its customers the option of paying more now in exchange for less later. Extended warranties: They’ve become a part of buying anything and everything in the world today, not just trucks.
“It has become a sales tool,” insists Shermet.
Long before you file your first claim against your dealer’s personal guarantee, your actions will have decided whether you’ll get the work done for free or not.
John Montgomery, national service manager for Volvo Trucks Canada, explains spec’ing for coverage goes on a great deal nowadays.
“If you have synthetic lubes installed at the factory, (in some cases) the manufacturer will extend your coverage automatically,” he says.
“Why pay for it when you don’t have to?”
In fact, looking at your maintenance budget before you flip your rig can help identify problem componentry and practices unique to your operating environment that you might want to address.
By tweaking your buying strategies slightly you can let the manufacturer pay for that next set of auto slacks.
“Look at your maintenance history and then for a custom plan designed to suit your needs,” says Montgomery. Unfortunately that means paperwork, but as Volvo’s service guru points out, the rewards are substantial.
“How do you know if you need to extend your warranties without knowing your costs?” he charges. “You can’t do that without good record keeping.”
But buying that coverage – and make no mistake it can cost big bucks – is just part of the answer. The business of collecting on warranty claims rests solely in the fleet or owner/op’s ability to track and schedule regular service.
“Dealers are constantly battling with customers,” who don’t fully understand the terms of a modern warranty, adds Shermet. “They have my sympathy.”
Sadly this is where many in the industry fall down. Montgomery explains manufacturers have no room to wiggle when it comes to deciding whether repairs are covered by the customer’s warranty.
“It’s a legal document,” he stresses. “When that vehicle has been in your possession for that amount of time or has driven that amount of mileage that’s it.”
In addition, when you aren’t on your own, the process can become that much more difficult to cash in on. If you’re not careful these safety valves of truck ownership can become clogged and fail.
“The most arduous part can be training your staff,” says Chuck Jamieson, vice-president of Travelers Transportation Services.
There are always conditions to satisfy – maximum weight ratings, service intervals and replacement part requirements, for example – which must be observed to minimize a fleet’s exposure.
“There are always exclusions,” Montgomery warns. “No warranty offers true bumper-to-bumper coverage.”
Once your house is in order, there are a few items many truck owners take for granted as not having available protection, that you’ll be able to save money on.
“Contrary to popular belief, clutches and brakes are covered by warranty,” concludes Shermet, “except in the case of regular wear or abuse.”
As well, just because you’re currently running a rig that’s a year old and about to come off warranty doesn’t mean you have to go without protection.
“Most extended warranties can be negotiated before the expiry of the base plan,” says Jamieson.
But again, your ability to do this comes down to one factor.
“Good record keeping is a must,” Montgomery stresses.
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