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Peyton Panik

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Feb 14, 2024

7 minute read

Fleet Management Blog

Why It’s Important to Adhere to Vehicle Warranties

Though they may feel like a standard part of any vehicle purchase, warranties can present an incredible opportunity for cost savings and preventive maintenance guidance.

Why It’s Important to Adhere to Vehicle Warranties

What does a typical warranty look like?

In basic terms, a fleet vehicle warranty is a commitment from the manufacturer of the vehicles in your fleet that they will make necessary repairs and replacements to your assets up to a certain time limit or mileage – under certain terms and conditions. Each warranty is supplemented with the original equipment manufacturer’s (OEM) recommendations for the maintenance and upkeep of your vehicle, which is key to not only finding potential warranty claims, but extending the lifetime of your mobile assets.

Knowing what is contained within each warranty and how to enforce them can allow you to save a significant amount of money on unforeseen repairs and manufacturer defects. Here’s a few examples of what you can expect for some of the warranties found in fleet vehicles:

maintenance-warranty-comparison

While most base warranties cover the big things, like engines, transmissions and other high-priced parts, there are also small parts warranties available to help you save on smaller defects that can build up over time.

If you don’t know your current warranty details, you can search for them in car history reports online using the vehicle’s vehicle identification number (VIN) or by contacting the dealership you purchased the vehicle from.

Are vehicle extended warranties worth it?

Extended warranties present an intriguing option for fleet managers looking to mitigate long-term maintenance costs, extending coverage beyond the standard warranty period. Ultimately, the decision to opt for extended warranty coverage requires a thorough analysis of costs and benefits.

If you’re looking for additional coverage outside of your standard warranty, there are a few routes available to purchase extended warranties that will give your fleet a little extra protection and padding. You can opt for an extended warranty through your dealership at the time of purchase or aftermarket through third-party insurers.

The price breakdown of extended warranty options should be carefully evaluated. Consider factors like duration of coverage, types of repairs included and deductibles associated with claims, as well as how many out-of-warranty expenses you've come across with some of your older vehicles in the past.

Whether or not to purchase extended warranties is a decision that is really dependent on the fleet. A couple of situations that would warrant a need for an extended warranty include:

1. Smaller fleets

Larger fleets have the luxury of spreading use and cost across a larger pool of assets, but when you’re managing a leaner fleet, keeping your vehicles up and running with the least assumed financial risk possible is vital to staying efficient.

2. Extending vehicle lifecycles

Standard warranties generally span about three years. If there is any chance that you want to avoid replacement for longer than that time, it’s better safe than sorry with an extended warranty.

3. New and unproven technologies

For fleets that are leveraging innovation, like a hybrid or all-electric vehicle, it’s always good to have additional coverage for unknown or irregular repair costs that you can’t always estimate.

Why are warranties important?

Warranty recovery can be an important cost-saving measure for fleets looking to maximize uptime and extend the life cycle of each asset. When something goes wrong with a vehicle that is considered warrantable, the repair or replacement becomes the manufacturer’s expense, keeping more money in your operation to take care of costs that aren’t covered by a standard vehicle warranty.

Without the safety net of warranty coverage, fleet managers are exposed to the full brunt of repair expenses, which means it's imperative to weigh the potential costs of out-of-warranty service against the benefits offered by both standard and extended warranty options.

Standard warranties are great for ensuring your vehicles run as the OEM recommends even in scenarios you can’t always control. Let’s take a look at a quick example scenario to see how much a standard warranty can save you. A standard corrosion warranty on a medium duty Chevy Silverado 4500 HD lasts 5 years or 60,000 miles, whichever comes first. If you operate in a particularly cold, snow-prone region, road salt can be great for keeping vehicles safer on the road – while also wreak havoc on the body of your truck. If you start to see perforations early on in your truck’s lifespan, your warranty will cover the body repairs, which means you get to retain maximum resale for your vehicle when it comes time to offload it.

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Alternatively, extended warranties can be an extra expense that you can’t always guarantee you’ll need, but when you do, it can be a lifesaver. Let’s look again at that Silverado. The average powertrain warranty lasts between 3 to 5 years, or up to around 60,000 miles, which doesn’t always encompass the full lifecycle of a fleet vehicle. Engine block cracks are a rare issue, but they do happen, especially if your vehicle sees a lot of hard use in its lifespan. When that happens, you generally must replace the whole engine, which can be a pricy endeavor to the tune of a few thousand dollars. An extended powertrain warranty will cover your engine replacement and extend the life of that Silverado with impacting its total cost of ownership.

Warranties can also serve to bolster your preventive maintenance efforts. OEM guidelines are structured to meter out maintenance in a way that best sustains the vehicle, so using those guidelines to inform your maintenance timelines means you give each vehicle exactly what it needs to keep running before it becomes an issue.

Following the OEM maintenance schedule creates an easily tracked and predictable cadence for repairs and routine maintenance that can increase your assets’ overall uptime.

In addition to cost savings and maintenance recommendations, warranties add another layer of protection to your fleet that preventive maintenance alone can’t address. While inspections and maintenance schedules are helpful on a day-to-day basis, manufacturer defects and malfunctions happen outside of anyone’s timeline. Warranties work to cover the situations that even good fleet management can’t prevent.

How to better leverage OEM maintenance schedules

The key to capitalizing on the protection of a warranty is following the manufacturer’s guidelines and recommendations to the letter. That means the details of your vehicles’ service – like mileage at the time of service or what location the maintenance is performed at – make a huge difference in the manufacturer’s decision to honor the warranty.

Keeping track of all the requirements for each of the vehicles in your fleet can become a difficult task, especially for fleets that use multiple makes and models of vehicles or vehicle types. That’s where a robust fleet management software can become a vital tool in maintenance scheduling.

With a fleet management system, fleet managers can see each vehicle and vehicle types’ specific warranty requirements and automate PM schedules based on OEM recommendations. Technicians can be directly notified when service on a particular vehicle is due soon, and maintenance can be scheduled around the availability of the vehicle to avoid excessive downtime.

The right fleet management software can even let you know about recalls based on your vehicles’ VIN before they become public knowledge, meaning you get into the shop and back out on the road faster.

How do warranties factor into vehicle retirement?

Fleet management costs extend beyond the immediate expenses of repairs and service. Considering warranties in your vehicle retirement analysis means taking a strategic approach to optimize budget allocation – some fleet managers prefer adopt a proactive strategy, retiring vehicles once they exit their warranty period to avoid potential spikes in repair costs, while other smaller, more budget conscious fleets might choose extended warranties or vehicle protection plans to get more use out of their assets.

Regardless of the overall approach, smart fleet managers develop comprehensive strategies that align with both budgetary constraints and long-term efficiency goals. You should assess the remaining lifespan of vehicles, anticipated maintenance costs post-warranty and the potential impact on overall fleet performance.

The road to effective vehicle warranty management requires a blend of adherence to manufacturer recommendations, meticulous service histories and strategic decisions around warranty coverage and retirement analysis. Navigating this path ensures not only the longevity of fleet vehicles but also the financial health of the overall fleet management operation.


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About the Author


Peyton Panik

Peyton Panik

Content Marketing Specialist

Peyton Panik is a Content Marketing Specialist at Fleetio. When she’s not writing, she’s probably churning through a new book or watching a movie she’s already seen 15 times.

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