Friday, October 20, 2006

Car Repair Scams: Why Traditional Scam Prevention Tips
Will Cost You a Fortune

The advice is all the same for auto repair scam prevention. You’ll be told to find an ASE certified shop. Ask around. Check out several different repair facilities first. Are they clean and neat? Do they provide written estimates? Check with the BBB. Is it AAA certified? Some will even advise to “ask for the parts back.”

Traditional tips and suggestions merely put a band-aid over an infected, gaping sore. Strong antibiotics are required to address the root source of the problems in the repair industry. To provide repair customers with the above advice is like sending a soldier into combat dressed in a pink tutu. We have to stop scratching at the surface.

There has not been any “new” advice in decades. More importantly, no one has answered why car repair scams have reached an estimated 40 billion dollars per year. Moreover, why is there still no solution to stop car repair scams?

The first hurdle to conquer is the perception of the frequency of auto repair scams. Many folks just don’t believe that car repair fraud is all that bad. Some even argue that the vast majority of repair shops do an honest day’s work, and that a few bad apples are making the rest look like crooks.

This is an interesting argument, and raises a number of questions.
  • If it is “only a few bad apples,” where are they hiding the 40 billion?
  • If most repair shops are honest, why does every state warn against car repair scams?
  • Why are auto repair shops at the top of consumer complaint lists every single year, in every state?
This is even expanding across the continents. For example, just this week Australia listed car repair scams at number 4 on their top 10 consumer complaint list.

The perception of frequency gets distorted because there are a number of levels to repair scams. There are the blatant rip-offs covered in the news. For a great video visit “Repair Scams Caught on Video” @ www.repairtrust.com. Then there are the common scams such as exorbitant prices and estimates, and aggressive scare tactics to get service customers to perform services. These occur every day.

The repair scams uncovered by RepairTrust not only found the tactics listed above and more, but a powerful undercurrent of scamming at the foundation of the automotive service industry. In reality, most car repair scams go unnoticed by the service consumer. Service customers just have no idea that they were ripped-off. This under-the-radar scamming occurs in dealerships, local shops, and franchises. Affiliation with ASE, AAA, BBB, NADA makes no difference.

An ASE patch on a technician’s arm, or an AAA or BBB sticker on the door of a service center means absolutely nothing in terms of a scam-free facility. Word of mouth recommendations can be just as devastating, as even shops that “seem” honest aren’t. Check out “Car Repair Prices: There Are No Honest Mechanics” @ EzineArticles or RepairTrust for further discussion on this. Also, for NEW and FREE scam prevention tips visit the Car Repair Scam Articles @ RepairTrust.

Traditional tips are ineffective in today’s service industry. Service facilities have found new and ingenious ways of ripping people off. In truth, many of the old tips and suggestions have actually become weapons allowing service centers to indulge in car repair scams more than ever.
The car repair playing field must be leveled. Service customers need solid answers, and they need to be equipped with information, understanding, tools, and an insider’s view of the who, what, when, where, why, and how of price-gouging. Navigating the dim underworld of today’s service centers with outdated information will cost a fortune.

-Theodore P. Olson
www.repairtrust.com

Wednesday, October 18, 2006

Car Dent Repair: Myths and Facts About Car Dent Repair Insurance

The long arm of car repair insurance doesn’t stop at extended warranties or tire road hazard insurance. Marketing gurus have found all sorts of knick knacks to insure. Among the top are ding and dent protection plans. Ding and dent insurance is growing steadily, and addresses those unsightly shopping cart and parking lot dings.

Dings and dents are fairly synonymous terms, although a ding is smaller than a dent. You’ll notice a dent. You’ll need to squint, or catch the vehicle in the right angle or sunlight to see a ding. Some dings are smaller than eraser heads.

Like extended warranties or tire insurance, dent and ding protection plans promise to pay for damages in part or in full for a specific period of time. These plans are primarily sold by new car dealerships and cost a few hundred dollars.

Ding and Dent Repair: Paintless Dent Repair
Ding and dent repair is called PDR, short for Paintless Dent Repair. There are many companies that perform this service: Ding Doctor, Ding King, No Dents, Dent Wizard…the list goes on. Some are better then others, although ultimately it’s up to the skill of the PDR technician. Prices are similar.

How is it done?
Most PDR techniques are non-intrusive. The PDR technicians use specially designed tools and gadgets to slip behind the damaged panels and manipulate and massage the damaged metal back to its original form.

Does it work?
Actually, it’s incredible! It works so well that in the majority of cases the dings and dents are completely removed. They’re invisible, gone, can’t-believe-your-eyes fixed.

I saw a soccer-ball-sized dent removed from the rear fender of a $120,000 car. The dent also had a large crease, which makes repairs even harder. After thirty minutes there was no visible detection that a dent was ever there. The repair cost the client $400. Traditional body shop estimates were hovering at $2700.

PDR positives
  • Very low cost compared to traditional body shops
  • Same day repairs—even while-you-wait service
  • No paint work, sanding, or traditional bodywork required
  • Original paint remains—helps retain vehicles looks and value
  • Body panels remain intact—maintaining structural integrity
PDR negatives
  • PDR does not address scratches or paint chips that are often associated with dings (Many PDR companies will address chips and scratches, but it’s not PDR technology)
  • Many areas of body panels are not accessible, so PDR is not an option
  • Plastic bumpers or any plastic components can’t be fixed with PDR techniques. Since the bumper is the most common area to get damaged, this is a significant downside of PDR technology.
  • Some damage can occur to door panels, paint, interiors, window glass and hardware, although damage of any kind is rare.

Do you need PDR insurance?
God, no!

Should you get your dings fixed using PDR techniques?
Hell, yes!

Let me explain…
Insuring against dings and dents does not make economic sense. Ding repairs average around $50 per ding. Some dings cost $99 to $149 to repair. Two to four dings can run $100 to $450, depending on the size of the dent. Insurance at this level is just not necessary. Moreover, it’s a gamble you will lose.

To benefit from a $300, two-year plan, your vehicle would need to sustain multiple “PDR repairable” dings or dents. Despite your coverage, you may not even notice the dings, making a claim impossible. Also, despite the amazing PDR techniques, they can’t fix everything, especially the chips and scratches that so frequently accompany a ding—should dings even occur.

Yes, get your dings fixed with PDR (if they’re bothering you), but don’t buy an insurance plan.

Protection plan economics 101
An article by Terence O’Hara in the Washington Post is a wonderful piece on the insanity of protection plans, and is applicable here. He writes:

The decision to buy an extended warranty…defies the recommendations of economists, consumer advocates and product quality experts, who all warn that the plans rarely benefit consumers and are nearly always a waste of money.

‘[Extended warranties and protection plans] make no rational sense,’ Harvard economist David Cutler said. ‘The implied probability [of an issue] has to be substantially greater than the risk that you can’t afford to fix it or replace it. If you’re buying a $400 item, for the overwhelming number of consumers that level of spending is not a risk you need to insure under any circumstances.’

…extended warranties play upon a basic human trait to avoid loss, even if it means sacrificing a possible future gain. In this case, the gain is all the other things of value that a consumer could buy with the money that was spent on a warranty

Fix your dings
Fix your dings and dents (if you want) as they come—maybe every spring. Fixing dings keeps your car looking pristine, and increases its value. But don’t bother with a protection plan. Save your money.

Hold off on that paint job
Quality paintless dent repair is often a great substitute for those considering full paint jobs. Whenever possible, it's best to keep the original paint. Good PDR combined with a professional detail can restore vehilces to show room condition for less than $500.

Go with the best
Since 1983 Dent Wizard has been pioneering PDR technology. Their PDR technicians undergo extensive and ongoing training. The rates are reasonable and the quality is excellent. Always request a master PDR technician, as there are various levels of abilities.

Check with local dealers
Dealerships in your area may offer Dent Wizard. Your vehicle does not have to be of the same make as the dealership. In other words, you can bring your Chevy to a Ford dealer for PDR work.

Myths
Do it yourself paintless dent repair is easy.
No it ‘s not. It requires training, skill, and experience. There are many who practice PDR techniques who crack or flake the paint, or who create ripples in the metal.

The PDR products sold on TV do the same thing.
No! Not even close. There's no good substitute for the art of PDR.

Scratch and dent repair are the same thing.
No. A ding is a small dent, which can often be repaired via paintless dent repair procedures. A scratch is an actual break in the surface of the clear coat or paint, requiring traditional body shop techniques, or touch up paint.

It’s easy to learn how to repair dents on cars.
Maybe for some, but it’s a skill that few master. Dent Wizard offers a great training program. The management and staff are top notch.

What’s the best car dent removing protection plan?
Money in your bank account!

-Theodore P. Olson
www.repairtrust.com
Making Sense of Car Dent Repair
Car Dent Repair Insurance: Myths and Facts About Ding and Dent Insurance

The long arm of car repair insurance doesn’t stop at extended warranties or tire road hazard insurance. Marketing gurus have found all sorts of knick knacks to insure. Among the top are ding and dent protection plans. Ding and dent insurance is growing steadily, and addresses those unsightly shopping cart and parking lot dings.

Dings and dents are fairly synonymous terms, although a ding is smaller than a dent. You’ll notice a dent. You’ll need to squint, or catch the vehicle in the right angle or sunlight to see a ding. Some dings are smaller than eraser heads.

Like extended warranties or tire insurance, dent and ding protection plans promise to pay for damages in part or in full for a specific period of time. These plans are primarily sold by new car dealerships and cost a few hundred dollars.

Ding and Dent Repair
Ding and dent repair is called PDR, short for Paintless Dent Removal. There are many companies that perform this service: Ding Doctor, Ding King, No Dents, Dent Wizard…the list goes on. Some are better then others, although ultimately it’s up to the skill of the PDR technician. Prices are similar.

How is it done?
Most PDR techniques are non-intrusive. The PDR technicians use specially designed tools and gadgets to slip behind the damaged panels and manipulate and massage the damaged metal back to its original form.

Does it work?
Actually, it’s incredible! It works so well that in the majority of cases the dings and dents are completely removed. They’re invisible, gone, can’t-believe-your-eyes fixed.

I saw a soccer-ball-sized dent removed from the rear fender of a $120,000 car. The dent also had a large crease, which makes repairs even harder. After thirty minutes there was no visible detection that a dent was ever there. The repair cost the client $400. Traditional body shop estimates were hovering at $2700.

PDR Positives
  • Very low cost compared to traditional body shops
  • Same day repairs—even while-you-wait service
  • No paint work, sanding, or traditional bodywork required
  • Original paint remains—helps retain vehicles looks and value
  • Body panels remain intact—maintaining structural integrity
PDR Negatives
  • PDR does not address scratches or paint chips that are often associated with dings (Many PDR companies will address chips and scratches, but it’s not PDR technology)
  • Many areas of body panels are not accessible, so PDR is not an option
  • Plastic bumpers or any plastic components can’t be fixed with PDR techniques. Since the bumper is the most common area to get damaged, this is a significant downside of PDR technology.
  • Some damage can occur to door panels, paint, interiors, window glass and hardware, although damage of any kind is rare.

Do you need PDR insurance?
God, no!

Should you get your dings fixed using PDR techniques?
Hell, yes!

Let me explain…
Insuring against dings and dents does not make economic sense. Ding repairs average around $50 per ding. Some dings cost $99 to $149 to repair. Two to four dings costs $100 to $450, depending on the size of the dent. Insurance at this level is just not necessary. Moreover, it’s a gamble you will lose.

To benefit from a $300, two-year plan, your vehicle would need to sustain multiple “PDR repairable” dings or dents. You may not even notice the dings, making a claim impossible. Also, despite the amazing PDR techniques, they can’t fix everything, especially the chips the so frequently accompany a ding—should dings even occur.

Yes, get your dings fixed via PDR (if they’re bothering you), but don’t buy an insurance plan.

Protection plan economics 101
An article by Terence O’Hara in the Washington Post is a wonderful piece on the insanity of protection plans, and is applicable here. He writes:

The decision to buy an extended warranty…defies the recommendations of economists, consumer advocates and product quality experts, who all warn that the plans rarely benefit consumers and are nearly always a waste of money.

‘[Extended warranties and protection plans] make no rational sense,’ Harvard economist David Cutler said. ‘The implied probability [of an issue] has to be substantially greater than the risk that you can’t afford to fix it or replace it. If you’re buying a $400 item, for the overwhelming number of consumers that level of spending is not a risk you need to insure under any circumstances.’

…extended warranties play upon a basic human trait to avoid loss, even if it means sacrificing a possible future gain. In this case, the gain is all the other things of value that a consumer could buy with the money that was spent on a warranty

Fix Your Dings
Fix your dings and dents (if you want) as they come—maybe every spring. But don’t bother with a protection plan. Save your money.

Go with the best
Since 1983 Dent Wizard has been pioneering PDR technology. Their PDR technicians undergo extensive and ongoing training. The rates are reasonable and the quality is excellent. Always request a master PDR technician, as there are various levels of abilities.

Check with local dealers
Dealerships in your area may offer Dent Wizard. Your vehicle does not have to be of the same make as the dealership. In other words, you can bring your Chevy to a Ford dealer for PDR work.

Myths
Do it yourself paintless dent repair is easy.
No it ‘s not. It requires training, skill, and experience. There are many who practice PDR techniques who crack or flake the paint, or who create ripples in the metal.

Scratch and dent repair are the same thing.
No. A ding is a small dent, which can often be repaired via paintless dent repair procedures. A scratch is an actual break in the surface of the clear coat or paint, requiring traditional body shop techniques, or touch up paint.

It’s easy to learn how to repair dents on cars.
Maybe for some, but it’s a skill that few master. Dent Wizard offers a great training program. The management and staff are top notch.

What’s the best ding and dent protection plan?
Money in your bank account!

-Theodore P. Olson
www.repairtrust.com
Making Sense of Car Dent Repair

Tuesday, October 17, 2006

Tire Insurance: Myths and Facts About Road Hazard Policies


Insurance—it’s everywhere. One can insure just about anything. Are tires an investment one needs to insure? Tire insurance, also called a road hazard policy, road hazard warranty, or tire reimbursement plan, is a rapidly growing industry in the automotive world.

Tire warranty plans pay in full or in part for the replacement or repair of damaged tires and/or rims from “road hazards.” Road hazards are defined as pot holes, debris, nails, wood, and other hazards found in the road. Curbs, sidewalks, and stone walls are not road hazards. This is an important distinction to consider when deciding if tire insurance is right for you (discussed further ahead).

Tire plans last for a specific period of time and tire wear tread-depth. Some plans last 2-3 years. Others can last 5 years or 60,000 miles. Several plans come with fixed amounts of coverage: $500 per year up to 4 years. Many contracts require three years of law school to comprehend. In terms of tread depth, a tire is usually considered worn out (and thus the plan null and void) at 2/32 to 3/32 of an inch.

Another important distinction is in the type of plan.

Tire reimbursement plans are just what they say. You, the plan holder, will be reimbursed after the claims process is finalized—usually 2-8 weeks. There is an out-of-pocket expense. These plans are often sold by new car dealerships. The prices can range from $300 to $600 dollars.

Road hazard policies operate similarly to reimbursement plans. However, some tire insurance providers, in partnership with the repair facility, may have a direct-pay relationship. Thus, there would be no out-of-pocket expense, except for applicable deductibles, and items not covered in part or in full. These plans are primarily sold by tire dealers and repairshops. The prices range from $10 to $30 per tire. They also can be based on a percentage of the cost of the tire: usually 12% to 15%.

Both types of plans have a number of variables, requiring a magnifying glass to read the fine print. Also, many are pro-rated warranties, covering only a percentage of the cost of the tire based on its wear.

Claims and Coverage
Depending on the plan, claims are initiated by the repair shop. The process is fairly smooth, although there can be a significant delay from the provider for authorization. This delay may be an hour or an entire weekend. This means that you’ll have to “ok” the tire replacement, and then hope it’s authorized for the full amount, or drive on your spare.

Some plans offer national coverage either among their service facilities or from other repair centers. Claims procedures will vary. Others only provide local coverage, or coverage at the selling facility.

Limitations
Tire insurance does not mean that everything is covered. Pro-rated warranties are based on the wear and tear of the tire. You may get 75%, 50%, or only 10% coverage depending on the tread-depth. You’ll pay the remainder. While there are plans that offer full coverage, even these have limitations, or they may conflict with a repair shop’s policies.

For example, many plans allow for a maximum of $30 to mount and balance one tire, and a maximum of $15 to repair a tire. However, sport tires often have significantly higher mounting and balancing fees—upwards of $50 per tire—and tire repair prices can exceed $90. There are also discrepancies on the tire and rim prices themselves, which in the end, may have to be supplemented by the service customer.

Although there usually is not an issue with the latter given the competitive market, the service center’s price mark up may be unacceptable to the plan provider. In this case, the service center needs to lower the price or you, the service customer, need to pay the difference—or go somewhere else. This does happen!

Rim Prices and Repairs
Rim replacement is becoming less frequent. With the high cost of aluminum wheels and sport wheel packages, tire insurers have opted to have them repaired. Repair will only be done if the rim does not hold air. What this means is that even if the rim is warped—enough to cause a vibration and even premature tire wear—they won’t replace it. Rather, they will send it out to be straightened and repaired.

Rims are replaced only if the damage is so extensive that the new tire, when mounted on the rim, won’t hold air. However, even in this case, especially if it’s an expensive sport wheel, they may still attempt to repair it.

Repairing rims is a bad option. While some rim repair is acceptable, badly warped or damaged rims will in no way ever be the same.

Alignments
If a car hits a road hazard hard enough, such as a pot hole, it’s wise to have the alignment checked. Road hazard policies and tire reimbursement plans do not cover alignments. The service customer will have to pay for this procedure.

Road Hazard Protection Positives
Some plans include tire rotations, wheel balancing, and nationwide coverage.

Myths
Can I pop all 4 tires and get a new set of tires?
You can try. But this type of claim will trigger a number of red flags with the insurer. The policy holder will likely send out adjusters and/or require photographs. You will also have a difficult time explaining how a “road hazard” caused all 4 tire pop.

New tires come with a warranty.
New tires do come with a warranty by the tire manufacturer. However, it only covers defects in workmanship. New tire warranties do not cover punctures or damages from external sources. This is why "road hazard" protection is being pushed. New tires are rarely defective. If there is a problem, it’s usually noticed when balancing the tire. Or, there is a drivability concern such as vibration or noise. If there’s a defect it’s generally caught right away, and the tire swapped out.

It’s so cheap; it’s a no-brainer, right?
Actually, the experts don't agree with this statement.

The Economics of Tire Warranties
An article from the Washington Post by Terence O’Hara explains the economics of extended warranties and purchase protection plans in general. It is quite fitting for road hazard warranties. He writes:

The decision to buy an extended warranty…defies the recommendations of economists, consumer advocates and product quality experts, who all warn that the plans rarely benefit consumers and are nearly always a waste of money.

‘[Extended warranties or purchase protection plans] make no rational sense,’ Harvard economist David Cutler said. ‘The implied probability [of having an issue with the product] has to be substantially greater than the risk that you can’t afford to fix it or replace it. If you’re buying a $400 item, for the overwhelming number of consumers that level of spending is not a risk you need to insure under any circumstances.’

In short, road hazard warranties are a waste of money. Don’t insure that which you can afford to replace.

Numbers Game and Slim Chances
Like all insurance, tire insurance plans are a numbers game. However, this is a game you have a 98% chance of losing. Insider statistics show that the percentage of claims paid out by providers is as low a 2%.

Curbs
Another interesting note is that a lot of tire damage is caused by curbs. Curb damage is not covered under most road hazard policies. High granite curbs with sharp edges slice through tens of thousands of tires per year.

You Won’t Notice
Many people don’t even notice tire damage. Other than to see if the tires are holding air, who “really” looks at tires? Tires are subject to a whole host of external influences which cause bubbles, slices and gouges. Despite the potential dangers of damaged tires, the damage very often does not translate into any noticeable drivability issue. The point is that if you don’t notice any tire damage you can’t benefit from the coverage.

Research Shows
Those raving about the benefits of a road hazard policy are the actual folks in the industry who stand to benefit from the sale. They’ll argue that it’s so cheap—only $10 to $20 per tire. Even so, for four tires, that’s $80 based on the “possibility,” the “chance,” of damaging a tire that meets the repair/replacement requirement protocols.

Auto Insurance
If a rim and tire has incurred significant damage, it’s quite likely that other problems have resulted as well. The first is that the vehicle may have been jarred out of alignment. Secondly, hub bearings, front end components: tie rods, spindles, ball joints, and a variety of other components may have sustained damage. In this case, auto insurance, which you are already paying for, will pay for everything—brand new.

Free Road Hazard Warranties
Many tires come with road hazard warranties FREE. In other words, in an effort to secure retailers, many tire distributors provide service centers FREE road hazard insurance. Some shops pass this on to their tire customers, others sell them. Ask if the tire “comes” with a road hazard protection policy. If not, request that one be provided at no additional charge. It’s worth a shot.

Also, some car manufacturers provide road hazard warranties FREE of charge for 12 months or 12,000 miles. If you’re buying a new car or even used, ask that the dealer provide a complimentary road hazard policy (after all the wheeling and dealing is done, of course), and just before you commit.

What’s the best road hazard policy?
Money in your bank account.

-Theodore P. Olson
www.repairtrust.com
Putting the service customer in charge of auto repair costs

Saturday, October 14, 2006

Auto Repair Insurance: Extended Warranties—Myths and Facts

How much insurance does one need? You have the big four: home, health, life, and car insurance. Then there’s a second category, which starts getting a little hazy with credit card insurance, purchase protection plans, fraud insurance and more. Extended warranties, also called extended service contracts, or extended service policies fall into the mist of this second category.

Extended warranties are supposed to pay (in full or in part) for specified repairs for a specific period of time after the expiration of the factory warranty. They can be a great value. They can also be a significant waste of money. It gets quite foggy in the details. What exactly is covered? How long? How much? Are there hidden charges?

There are numerous extended warranty companies and an even wider variety of warranty packages available: silver, gold, platinum, platinum-plus, and a host of other confidence-building words. What’s the best plan, and are extended service contracts worth the money? Extended warranties, like life insurance policies, are a numbers game. They’re a gamble. You pay $2500-$4500 for a 2 year, 100,000-mile protection plan and hope that you get at least that back in warranty repairs. The provider on the other hand, hopes to pay out less than it insured.

There are three major types of plan providers: The manufacturer, the dealership/third party, and third party providers. Each one has its assets and liabilities (discussed ahead).

What exactly is covered in an extended service plan? As mentioned above, what’s covered depends on the package purchased. Some plans only cover the power train: the mechanical components of the engine, transmission, and rear-end. Others cover the power train plus some electrical components. Still others cover electrical, advanced electrical, and computer components. Some only cover what’s listed in the contract. This is called a “Stated” or “Named” contract. This means that if it’s not stated, it’s not covered. Some cover bumper-to-bumper, similar to a manufacturer warranty, except trim pieces, upholstery, exterior components, cosmetic items, and a number of other exclusions.

Never before has the adage, “The devil’s in the details,” been so applicable.

Manufacturer Extended Plans: Extended service plans from the manufacturer are the best in terms of coverage, convenience, and quality. Coverage is similar to the warranty while the vehicle was under its original factory warranty—with similar exclusions stated above. The billing is direct, meaning you don’t have to pay out-of-pocket, except for a deductible, if applicable. Quality is great too, as an extended warranty from the manufacturer will only use factory parts. They also have money, so there’s less risk of bankruptcy.

The down side of manufacturer extended service plans is that they are not cheap. These plans are generally the most expensive, require low mileage standards, and necessitate servicing your vehicle at a dealer for coverage.

Dealership/Third Party Plans: Extended warranties from a dealership are actually from a third party insurer. These providers are “generally” reputable, but not always. However, if there is an issue (such as the warranty provider filing chapter 11, which is quite frequent in the extended service contract business), the dealer “may” step in to cover any repairs that would have been covered under the defunct plan. Also, claims are easier: billing is direct because the dealership has a working relationship with the provider, and there is usually agreement on price.

Some dealers set up their own “internal extended warranty,” which is honored by the selling dealer. This is rare, and should not be confused with a manufacturer warranty. Important: extended warranties are often passed off as “manufacturer” warranties. They’re not. This is a sales trick. Also be aware that there is a significant mark up, as the dealership is merely acting as the middle man. Lastly, extended warranty companies often go bankrupt without warning.

Third Party Plans: These plans are called third party plans because they are outside the responsibility of the manufacturer and the service center performing the repairs (unless there’s a working relationship with a repair shop as stated above).

There are hundreds of extended service contract companies. Some have good reputations, some don’t. Third party plans are frequently sold by used car dealers. You may also receive an official looking notification in the mail stating that your warranty is expiring, and directing you to call an 800 number ASAP. This is a marketing tactic by an independent warranty provider. Despite the “official” appearance of the postcard or envelope, it’s not from the manufacturer. Manufacturers do not send out reminders about warranty expirations.

Given the wide-variety of third party plans there are numerous red flags.

1) Claims: Extended warranty companies will be quick to tell you that filing claims is easy, and that the service center gets paid immediately via a credit card. Thus, there’s no out-of-pocket expense for you. However, the warranty company can’t dictate a service center’s policies. Some service centers will only accept payment from the repair customer. Thus the burden is on the repair customer to fill out the forms, contact their warranty company, and await reimbursement via check, which can take 2-8 weeks.

It is the service center’s responsibility to contact the extended warranty company to let them know what’s wrong with the vehicle and to check coverage. This process can take anywhere from 20 minutes to 20 days, sometimes more, depending on the degree of repairs and especially the amount. (See $1000 and Adjusters ahead)

Service centers and extended warranty companies frequently battle over the “fair” price of repairs. Many repair shops no longer negotiate, and just state the price, leaving the contract holder (i.e., the service customer) responsible for the difference.

2) Rentals. Rental coverage is a great benefit. However, there are fixed rates and time limits. In other words, the warranty company is not going to pay to have you drive a Mercedes-Benz, even if you drive a Benz. Rental allowances range from $25 to $35 per day. Also, rental coverage is based on the number of hours it takes to repair the vehicle, NOT how long your car has been at the shop.

3) $1000 and Adjusters. Repairs that approach $1000, or that require a significant amount of work, will be cause for the warranty company to call in an adjuster to confirm the diagnosis. This will delay the repairs by a minimum of 24-48 hours. It may cost you additional money when an adjuster is involved. You may be charged to have your vehicle pulled back into the shop for inspection, as well as for the time spent with the adjuster.

4) Tear-down Charges: In many cases, an extended warranty company will require that a particular component be taken apart for inspection to determine if the repair is indeed needed and covered. This puts the service customer in a very awkward position. The customer will have to authorize potentially hundreds of dollars of tear-down expense in the hopes that the repair is covered. If it’s not, the customer is out the hundreds in tear-down PLUS the actual repair. This does happen!

Common Myths:

Extended warranties cover maintenance services and brake work.
No. Extended warranty plans do not cover maintenance or wearable items. Brake pads and rotors are wearable parts. Maintenance such as coolant, brake and transmission flushes, tune-ups, services, oil changes, bulbs, wipers, and more are not covered.

They told me it’s bumper-to-bumper, so it covers everything right?
Wrong. Not even a factory warranty covers everything. When pitching the sale for the extended warranty, one is very often lead to believe that he or she will have nothing to worry about. This is just not true on so many levels. For example, if your bumper falls off it’s not covered.

I don’t have to pay anything, right?
Wrong. Despite the claims of 100% coverage, there are many factors involved. The labor rates, labor hours, diagnostic times, parts prices, and machine work are just a few items that often conflict with a service center’s policies. Some extended contracts only pay a maximum of $55 per hour, and only allow one half hour for diagnostic time. This is generally unacceptable to the service center, as labor rates have skyrocketed to over $100 per hour at many dealerships, and average $75 at local shops. Moreover, with the complexity of today’s vehicles, diagnostic time is at a premium. The customer pays the difference.

If I have an expensive problem, I can just purchase an extended service contract.
It’s unethical, but it’s an option many attempt. However, most service contracts have a minimum time requirement before the first claim can be filed: usually three months. Also, many contracts require that your vehicle be inspected by a service center to check for pre-existing conditions—just like life insurance.

My contract lasts up to 100,000 miles.
Only if the time limit doesn’t run out first. All extended warranty plans have a time limit. For example, a typical contract will state that the vehicle is covered for two years or 100,000 miles, which ever comes first. During the sales pitch, however, the emphasis will be on the 100,000 miles, not the time.

If my car breaks, it gets fixed like new.
Actually, depending on the contract, an extended warranty company can insist on installing remanufactured or even used parts.

Items commonly not covered by extended warranties:
• Any component with a pre-existing condition
• Any component related to a Technical Service Bulletin (TSB)
• Many components that has been updated by the manufacturer
• Extra components necessary “due to manufacturer updates” to complete the repair
• Trim pieces: molding, cup holders, dashboard, console, body parts, glass
• Many accessories: radios, DVD players, TVs
• Many expensive electronics: climate control units, navigation assemblies

Service contract positives: Some service contracts are transferable, and may thus increase the resale value of a vehicle. Many come with trip interruption reimbursement, towing and 24-hour road side. Some plans can also be financed, or have E-Z Pay Plans. Others offer a money-back guarantee.

What should you do? You’ll get lots of advice about doing the research, comparing plans, and reading the fine print. This is all sound advice. But what about doing the math?

Let’s say a plan costs $2500 for 2 years or 100,000 miles, whichever comes first. To break even you’ll need a minimum of $1250 per year in covered repairs, excluding regular maintenance. Remember covered is the vital word here.

Another way to break it down is to anticipate having to pay $104.17 per month over the next two years in “covered” repairs. Do you want to take that bet?

What could happen? You could double your money or more in repair work. You could conceivably get a new engine and transmission (or used ones anyway). You could also easily spend $2500 for a service contract, and still have to pay another $2500 for repairs, which for a variety of reasons, were not covered under your plan. Now you’re out $5000.

Alternatively, you could keep the initial $2500. In many ways all an extended warranty does is prepay for repairs. You could stick the money in the bank and collect interest. Then you could withdraw the money for repairs as needed.

Another consideration that’s rarely discussed is the cause of the problems. Many car repairs problems are the result of wear and tear, neglected maintenance, physical damage, or acts of God—such as flood damage. None of this is covered. The gamble only covers failed components.

If the vehicle you’re driving does cost $2500 to $4500 in repairs due to outright failed components, is it a vehicle you even want to consider keeping? A vehicle that needs this kind of repair work due to mechanical, electrical, or computer failures may not be worth it. The $2500-$4500 would be better spent on an upgrade to a quality vehicle rather than insuring a lemon.

There’s no question that auto repair is expensive, and even quality cars break from time to time. But do they breakdown to the tune of $2500-$4500? That’s a hefty bet on a “possibility.”

Terence O’Hara from the Washington Post makes an excellent assessment about extended warranties in general. He writes:

…extended warranties play upon a basic human trait to avoid loss, even if it means sacrificing a possible future gain…the gain is all the other things of value that a consumer could buy with the money that was spent on a warranty

What’s the best plan? Money in your bank account!

-Theodore P. Olson
www.repairtrust.com
Making sense of car repair prices!

Friday, October 13, 2006

Auto Repair: The Top Ten Mistakes Made by Your Mechanic

Number One: Not confirming the concern. Confirming a repair concern is a basic diagnostic principle frequently overlooked. To fix a problem, the first thing one must do is recognize it.

Number Two: Insufficient Road Testing. The importance of a thorough road test (even for an oil change) is well documented in automotive training manuals. Yet, many technicians consider driving the vehicle into the shop good enough.

Number Three: Misdiagnosing. For the above reasons and a multitude of others, your vehicle is misdiagnosed more often than not. Mechanics will spend hours chasing the wrong problem, wasting your time and money.

Number Four: Throwing parts at a problem. To compensate for lack of skills, mechanics often just throw parts at the problem in the hope of getting lucky. It’s common to hear mechanics say I replaced this, this, this, and that, and the problem’s still not fixed. This goes right back to mistake number one: confirm the problem with diagnostics, then proceed.

Number Five: Not addressing primary concerns first. Technicians often spend an inordinate amount of time looking for easy sells that will fatten their paychecks. There’s nothing wrong with this provided there’s no charge for the inspection, it doesn’t conflict with your time, and the upsell suggestions are valid (they’re frequently not). However, this type of free inspection and the subsequent upselling too often overshadows the primary concern. So…what’s wrong with my car?

Number Six: Overconfidence. Too often unqualified technicians get in over their heads. Rather than defer to a more experienced technician or facility, they often keep going and do more harm. How’s it go…The road to hell is paved with good intentions?

Number Seven: Taking shortcuts. In the ongoing effort to beat the clock, technicians will create a host of problems: breaking parts, snapping bolts, short circuiting sensitive electronics. Refer to Auto Repair: How Can They Screw Up an Oil Change for a great discussion.

Number Eight: Poor Repairs. Whether through incompetence or laziness, mechanics frequently don’t do repairs correctly. It’s often sloppy work. Forgotten bolts, parts not lined up correctly, or components not re-installed properly are common. It gets worse with computer repairs: incorrect software programming, coding, and resynchronization protocols are just a few.

Number Nine: Not confirming repairs. After a repair is complete, it’s important to re-check to ensure that the problem is indeed fixed. Too often parts are thrown in and the car is pulled out only to pull in another victim.

Number Ten: Making a mess. If the above nine mistakes weren’t bad enough, there are now greasy fingerprints on the hood and steering wheel, and two big greasy boot marks on the carpet.

-Theodore P. Olson
Auto Maintenance Software

Wednesday, October 11, 2006

Auto Repair: How Can They Screw Up an Oil Change?

“It’s all about beating the clock.” This quote comes from a wise old service manager, advising me on how to maximize my income as a flat-rate technician. If you have ever wondered why your car doesn’t get fixed correctly, or all your concerns weren’t addressed, you can blame, in part, the flat-rate pay structure.

Flat-rate simply means that your mechanic is paid a flat fee for a particular repair, regardless of how long the repair actually takes. In other words, if your car needs a water pump, which pays two hours of labor, and the mechanic completes the job in one hour, he gets paid for two.

In theory, this can work to your advantage. If the job takes longer, you still only pay the “predetermined” labor amount. In THEORY, not reality!

The flat-rate pay structure is designed to drive productivity. It’s very effective. The flat-rate pay system encourages technicians to work hard and fast, but it does not promote quality.

In terms of getting your car fixed correctly, the flat-rate pay structure has disastrous effects. Flat-rate technicians are constantly looking for shortcuts to beat the clock in order to maximize the number of hours they bill. Experienced flat-rate technicians can bill anywhere from 16 to 50 hours in an 8 hour day.

It’s these shortcuts and the breakneck speed at which flat rate technicians work that result in some of the most idiotic mistakes. In the rapid-fire pace of a shop I’ve witnessed technicians start engines with no oil. I’ve seen transmissions dropped, smashing into little pieces onto the shop floor. And I’ve seen cars driven right through bay doors—all in the name of “beating the clock.”

Flat-rate technicians can get quite elaborate with shortcuts. My favorite was the implementation of an 8-foot-long 2-by-4, which was placed under the engine for support while a motor mount was removed. It made a job predetermined to take 1.5 hours achievable in twenty minutes. A win-win, right? The technician makes extra money; you get your car back faster. Actually, in many cases the placement of this 2-by-4 damaged the oil pan. Moreover, it caused the car, your car, to balance precariously 6 feet in the air, while the technician manipulated the car lift to access your engine mount. This tactic was abruptly discontinued when a technician’s 2-by-4 snapped causing the car to crash nose down onto the concrete floor.

Sometimes the shortcuts create very subtle disturbances, which create problems overtime. A quick example: a vehicle had its transmission serviced with a new filter, gasket, and fluid. During the procedure, the technician was able to save time by bending the transmission dipstick tube slightly, in order to get the transmission pan out faster. The vehicle was reassembled, and the technician re-bent the tube back into place and off it went—no worries….

Six months later, the vehicle returned with an intermittent misfire. The engine wasn’t running on all cylinders. After extensive diagnostics, it was discovered that the transmission dipstick tube had chaffed through the engine harness, intermittently grounding out an injector. Hmm, that’s strange. Don’t usually see that.

The high-speed environment and the subsequent shortcuts illustrate the devastating effects of the flat-rate, sales-driven pay structure on the quality of car repairs. No wonder even an oil change gets screwed up!

The poor quality of work encouraged by the flat rate pay structure is disconcerting enough. Unfortunately, it doesn’t stop here. The negative effects of flat-rate get exponentially worse as it opens wide the door to rip you off!

-Theodore P. Olson
Auto Estimate Repair Solutions

Monday, October 09, 2006

Car Repair Prices: Should I Go to the Dealer or My Local Guy?

There is lots of advice on where to service one’s vehicle. Many argue that local shops are best, and that you only need to go to the dealer for warranty work and recalls. Others state that dealers are the real experts even though they’re expensive. These arguments are interesting, but do little to clarify the myths and facts of dealership service versus local shop service.

The two primary objectives of these arguments are money and quality. These two interweaving points need to be fleshed out when determining the appropriate facility in which to service a particular vehicle.

In terms of money, all car repair is expensive. Whether at a dealership or local shop, studies show that car repair prices are extreme. Consumers are scammed tens of billions of dollars every year. Every type of service facility: dealerships, local shops, and franchises, are ripping you off in one form or another. Stating that one facility is more expensive fails to recognize that 98% of ALL repair shops are ripping people off.

Moreover, the expense argument of car repair doesn’t take into account the quality of service for the money. The quality of service between a dealership and local shop is a key factor to consider.

There are vast differences in the quality of car repairs. There are many variables, from the customer service received, the diagnosis of the problem, the quality of parts used, to the technician performing the actual repair.

In short, you could have a water pump replaced perfectly, and at a great price, at a dealership. You could have the same job butchered at a local shop. You could easily switch these scenarios, and add ten more variables.

The concern over the quality of repairs is heightened by the fact that the majority of technicians lack the appropriate training, which can also increase the price. Furthermore, depending on the facility, the technician will be limited by the facility’s resources—equipment and expertise, as well as by the service center’s internal policies and practices.

For example, at a dealer, a technician can only use factory parts (parts built by the manufacturer). In most cases, this is great. Factory parts are perfectly designed for the vehicle. However, a twelve-year-old car doesn’t necessarily need a factory part. While it can’t hurt, the age of the car may not justify the expenditure, if the repair can been done for significantly less elsewhere. The technician may know this, and have a great alternative solution “outside company policies.” It’s unlikely, however, that he’ll speak up, or that he’ll even be allowed to speak up.

In cases like these, the customer suffers, having to pay significantly more than necessary. Dealership by-the-book protocols often dictate replacement of expensive parts, and thus dealer personnel will not and/or cannot offer alternatives. Following these mandates isn’t necessarily bad, and this example is not intended to frame dealerships in a negative light. However, repairs in a dealership environment very often exceed the value of the vehicle being repaired.

The point here is to illustrate that depending on the year, condition, and value of one’s vehicle, a dealership “may” not be the best alternative. However, this is rapidly changing. Technological advancements require dealer service more and more for computer updates, software updates, intricate electronic coding, and a host of mechanical concerns outside the scope of the local garage.

Unfortunately, a local shop may not be a good alternative either. At a local shop, a technician has a whole range of parts from which to choose. However, this presents problems. First, most local shops will use local parts suppliers regardless of quality because of speed, convenience, and business relationships. This means that you “may” get a better price (refer to Car Repair Prices: Who Charges More, Dealerships or Locals @ http://www.repairtrust.com/articles.html for an in-depth discussion on car repair prices). However, the use of many aftermarket parts (parts not built by the manufacturer) can cause numerous problems, and may even cause other systems to fail. This is common—and, you pay for it!

Local shop technicians—the good ones anyway—know the difference between quality parts and cheap parts. However, as mentioned above, the good ones are rare. In light of this, many local shops are turning to the use of factory parts because it’s just less headache. There’s nothing more frustrating than installing an aftermarket component that has to be bent, twisted, tweaked, and manipulated to fit correctly or work properly. Not only is the part made poorly, it’s been modified before it’s even installed. Comforting, isn’t it?

Car repair concerns are not limited to parts. The quality of the worked performed—diagnosis, labor, experience, and installation procedures—is a critical factor. In this arena a dealership technician and a local shop technician are often worlds apart.

A dealer technician has all available information and proper equipment at hand, although he may lack the training to know what to do with it. Nevertheless, he does have a team of co-workers to turn to, and he can draw from their experience. Dealer technicians also see your car and its types of problems daily, and what might be a complicated repair for a local shop is quite easy for a dealer.

However, the structure and flat-rate environment of dealerships very often cause even experienced technicians to overlook even simple problems. This is exacerbated by the lack of effective of communication of an inexperienced or overwhelmed service advisor who is supposed to be advocating on your behalf. While there are numerous other obstacles, the point is that dealers are in the dark ages in terms of consistent quality service.

Before discussing what’s better, a dealership or local shop, a final point to consider is the condition of your vehicle after several years. What facility keeps your vehicle in “better” condition: a dealership or local shop? And, does this “better” condition translate into dollars?

Given the current state of the service industry, it would be an aberration to receive consistent, quality service anywhere. Nevertheless, both local shops and dealerships are a vital component of the automotive service community. (Franchises are dangerous and thus have been excluded from this discussion) The consistent use of inferior parts and poor technical understanding and workmanship continues to be the locals shop’s downfall. Vehicles need to be maintained according to manufacturer specifications. There’s no argument on this. Although dealers still struggle with good customer service and consistent positive results, a well-maintained vehicle from a state-of-the-art dealership results in a significantly better quality vehicle, long term. A better quality vehicle equals an increase in value.

-Theodore P. Olson
Exposing the Truth about Car Repair Prices

Tuesday, October 03, 2006

Auto Sales & Auto Service: Who Rips You Off More, Sales or Service?

Everybody hates car salesman. They talk too fast, use too many clichés, and are generally exasperating. There’s nothing worse than being verbally romanced only to find out you were ripped-off—or is there?

· How about getting ripped-off repeatedly?
· How about getting ripped-off repeatedly for years?
· How about never even knowing you were ripped-off, repeatedly, and for years?


Welcome to service! When it comes to swindling, automotive service representatives are the real experts. They have more experience, and way more opportunity to rip you off.

A car salesman has only a few chances to rip you off provided you even engage in negotiations. There’s the price of the car, financing, leasing, accessories/options, extended warranties, your trade-in, and the general bull that wafts from the salesmen’s mouth.

You should also watch out for the finance manager. Today’s finance folks aren’t just number crunchers, they’re salesmen in disguise. This is where you’ll be encouraged to buy the extended warranty and a host of other accessories that can all be packaged up nicely into your financing.

Car sales rip-off attempts are easily thwarted. Number one, you can just walk away! Also, there are numerous resources on how to buy a car without losing your shirt. If you’re interested, visit the RepairTrust resource link www.repairtrust.com and you’ll find several sites that will tell you everything you want to know about buying, trading, leasing, financing, new, used…etc.

It’s quite different in the world of car repair. Your car needs service. You HAVE to deal with a service representative, like it or not.

The folks in the dim underworld of automotive service are well-trained in the art of ripping people off. They’re not the feeding-frenzied, thrashing sharks of sales that are easy to spot.

No, service representatives are the Great Whites. They primarily hunt alone, hiding in the murky waters of service, striking without warning.

What’s really scary is that the service industry is infested with Great Whites. Traditional tips and suggestions to avoid their attacks don’t work. This is evidenced by the fact that service customers are scammed tens of billions of dollars every year.

Information is the key to STOP a Great White. If one knows who, what, when, where, why, and how it hunts, one can take control.

Importantly, "Sharks are not mindless eating machines." The Great Whites of the service industry are experienced and smart. There are so many attacks from so many different directions, and new technologies provide fresh chum daily.

Technology creates ripples and waves, making it difficult to see below the surface of even simple auto repairs.

In auto repair, technology creates confusion. Like a struggling swimmer, the Great White can sense the anxiety of a service customer. In the midst of this confusion, the waters of service get even murkier, and SPLASH—it’s cost you an arm and a leg.

In today’s service environment, the service customer needs protection, and needs to be empowered with accurate information and powerful tools before even entering the waters. There’s no need to lose any limbs, ever!

-Theodore P. Olson
www.repairtrust.com
Empowering the service customer to take control of car repair prices

Sunday, October 01, 2006

The Top 10 Rarely Voiced Justifications Mechanics Use When Ripping You Off

The following is a list of ten excuses that mechanics use to justify excessive car repair prices. This list is the result of numerous interviews and question and answer sessions with a variety of automotive technicians, shop owners, and managers across the world. A bit of humor is used to highlight the insanity of it all.

Number 1: The costs of doing business are outrageous!
The number one rationalization mechanics use to charge excessive car repair prices is their own costs. When the bills roll in for them, they roll them out to the service customer. Don’t get your car fixed during tax season.

Number 2: It’s not easy, you know!
After mechanics are done crying about how much it costs them to rip you off in the first place, they lament about how hard their jobs are. It’s dirty AND there’s so much technical mumbo jumbo to keep up with.

Number 3: Industry pricing guidelines are unfair!
Not satisfied with the industry experts, mechanics emphasize the “guide” in guidelines to justify their prices, and to guide them to ever increasing profits.

Number 4: The car’s rusty!
This unfortunate characteristic of metal is commonly used to defend a host of charges. Those pesky nuts and bolts accumulate a lot of rust, you know!

Number 5: The repair didn’t include that!
Mechanics frequently use this “hazy ignorance” when justifying multiple charges on a repair that was supposed to include the multiple charges.

Number 6: The guy’s a jerk!
There’s an old adage in the industry: Never Piss-off a tech!

Number 7: I can get away with it!
No remorse here.

Number 8: I screwed up!
Charging the client for mechanic errors…it’s like paid training!

Number 9: Somebody else screwed up!
I’m not paying for the wasted time! Damn parts guys, delivery guy, machine shop guy, owner guy….

Number 10: Everyone else is doing it!
Finally! The TRUTH!

98% of ALL Repair Shops Are Ripping You Off!

-Theodore P. Olson
www.repairtrust.com