Honda Warranty Administration
Honda and Acura dealerships scramble to understand Honda’s new primary warranty expense measurement.
Under the old measurement system, dealers could modify Honda warranty administration and impact their overall numbers with the simple inclusion or exclusion of repair values per VIN. Although frequency and VIN expense still play a role in the new system, proper claim coding and administration have a more significant impact.
Honda’s new Warranty Summary Report uses a score based measurement system that compares the labor, parts, and miscellaneous expense of each unique claim to similarly submitted claims. Repairs with low cost produce a lower favorable score, while those with a high value an unfavorable one. Thus, making it imperative that the correct labor and parts be submitted to fit the proper repair type. According to Honda miscoded claims result in driving up the Expense Sub-Score, which is now their Primary Warranty Expense Measure. Unfortunately, Honda is keeping the exact formula and the contributing claims obscure, but they do provide an Administration Sub-Score on the report. Its purpose to help dealers decipher administrative concerns from policy ones. If the Honda Warranty Administration Sub-Score is high, there is a more significant mismatch between labor and parts than other comparable dealerships. Your DSPM, upon request, is able to provide a list of RO’s that directly impact the Expense Sub-Score.
If you are struggling to keep the new numbers in line, consider comparing each credit memo to the repair orders for proper coding and warranty administration. Message me through LinkedIn if you would like help with this. For a nominal fee, we will review paid claims. We started with Honda in 1987; we have a great team of experienced Honda/Acura warranty administrators, that are ready to assist you with the new Dealer Warranty Summary Report.