August 18, 2008
Recent Steering You Right articles
By Jordan W. Charness
Peter has a 2005 vehicle. Its three-year warranty expired in January and in June the “Body Control Module” (BCM) decided to go belly-up. This is a small, solid-state box that controls many features of the car such as the electronic door locks. The unit itself costs $330 plus tax plus labour for a total bill of about $550.
He vented long and hard at his dealer for having expensive parts fail just after the warranty period, and they suggested he call the manufacturer’s Customer Service. He vented similarly to them. Their customer service rep contacted his dealer to verify the situation, and in due course he was informed that the dealer would recompense him for the cost of the unit plus tax.
At first Peter was delighted since the warranty was over and he wasn’t expecting a cent. Then his wife suggested that maybe there was some hidden guarantee that the manufacturer wasn’t telling him about. Peter went ahead and asked the question directly to the dealer. His service advisor at the dealer said that the only components covered after the original three-year warranty period are the ECM (Electronic Control Module) and the catalytic converter. Apparently they were paying for the BCM out of the goodness
of their hearts.
Peter was willing to swallow this explanation, but his wife Mary just didn’t believe it. She was positive that there is some warranty on electronic components that, for some reason, the manufacturer didn’t want to tell him about. Peter wanted to know if I had any opinion or information on the topic.
Since, as my friends will tell you, I have an opinion on just about every topic, I certainly have one on this topic. Hidden warranties don’t exist. Goodwill payments, on the other hand, do.
The courts have sometimes held that a part might have been failing prior to the expiration date of the warranty. For this reason they will occasionally order a manufacturer or warranty company to pay for the repair of a product failure that was reported just after the warranty deadline.
In addition, there are some parts that clearly should not fail until the car has at least aged a certain amount. Even though the warranty period may have expired, a court may decide that the part failed to live up to the requirement that all items sold to consumers be “fit for the purpose for which it was intended”.
Given these variables it is often in the manufacturers’ interest to occasionally make goodwill payments and save potential litigation.
On the other hand there are some warranties that are not hidden but are added to a specific car to extend the warranty. Although this seems like the manufacturer is just being a nice guy, in actual fact this gesture is simply saving them the cost of a full recall.
If an item on the car repeatedly fails and is clearly defective the government may order that all of that make and model be recalled for a replacement of that part. Whether or not the car is still under warranty has no bearing on this repair since it is a safety issue.
In some cases a disproportionate number of the same part fails but not so many so as to require the manufacturer to issue a full recall. In that type of case the warranty on the part is voluntarily extended by the manufacturer well past the original guarantee. This is not usually done on safety items but may be done on expensive parts that really should not fail. These published extensions are neither hidden nor goodwill gestures.