A transition has occurred in the new car sales market. This was once industry that used to be more localized, resulting in more favorable profit margins for dealers. Now with the internet and more widespread competition for sales dealers have turned to add-on options and warranties to boost their bottom line. There are many products offered. In this article I will be focus on one specific add-on. The dent warranty.
I am a 10 year veteran in the Paintless Dent Repair field. Prior to that I worked in service departments as a mechanic for 8 years. This adding up to spending my adult life in the automotive industry. In this article I will be sharing the knowledge I have learned in the dealer world as an employee and subsequently as a current PDR company owner and technician.
For starters, what is PDR? Simply put, Paintless Dent Repair (PDR) process is designed to get behind a vehicle’s “skin” and massage dented panels back to their original shape. You can read more in depth about the process here.
To break this down we will look at a few many questions regarding dent warranties
- Who sells these plans?
- What do these plans typically cost?
- What is the claims process?
- What limits or restrictions are there?
- Is a dent warranty plan a good buy?
Typical dent warranty plans aren’t sold directly from your dealership/manufacturer. These plans are presented by a myriad of third-party companies. Almost all of these companies have NO experience with paintless dent repair and DO NOT employ their own dent repair technicians. They are simply insurance or holding companies that sell a product to the car dealership, which in turn adds a markup and then sells it to you. Most plans are sold to the dealership for $300-500. The dealership then sells the dent protection plan to you for $600-1500. This is pure profit for the dealership. They love these plans, and are selling them like hot cakes. After they sell you the plan, the sales department at the dealership has no further responsibility with your dent repair claims in the future. The claims process is left up to either you or your dealership service advisor to execute with the third-party warranty company. It is a tedious process that most service advisors are forced to do, in order to keep their customers happy.
If you have purchased a dent warranty here is how the claims process will likely work. You call the 1-800 number to make a claim with the warranty company. The warranty company then searches for a local dent repair specialist. They call or send the provider the claim via email. The local provider must first check his email inbox and then decide to accept or pass on the claim.
If accepted the local provider tries to call or email you they will then work with you to set a day, time, and location to repair the dent. Some dent repair technicians will come to you. Or in some cases they may require you to come to a repair facility in order to have the claim completed. Keep in mind, you are not able to research and choose who repairs your car. That choice is left to the warranty company.
With certain plans the warranty company will want to inspect the damage on the car, before they determine how much they will pay for the repair. Once the dent is repaired, you sign the claim form and then a wholesale payment (which can be as little as a 1⁄3 of the industry standard) is sent to the local provider 30-45 days later.
At this point, if you have managed to wade through the many layers of phone calls and headaches to actually get your car in front of the dent repair technician, the next step is making sure the damage on your car is covered by the service plan. Most people who contact me with a claim usually end up disappointed when they discover the damage they have on their car is not covered. Here are just a few of the many limitations and exclusions that most plans have:
- Dents with any paint blemish, chip, or scratch are not covered Dents over 4 inches in diameter are not covered
- Dents on a body/accent line are not covered
- Scratches are not covered
- Collision damage is not covered
- Bumper damage is not covered
- Hail damage is not covered
- Part replacement or repainting is not covered
- Removing and reinstalling parts to gain access to remove the dent is not covered
- Dents that are obstructed on the back side of the panel in any way are not covered Is it worth buying a dent repair service plan?
Now let’s run the numbers and try to determine if purchasing one of these plans is right for you. The typical door dent (about the size of a quarter) usually cost about $150 to repair. That price can vary slightly depending on the location, size, and depth of the dent. Most of these plans cover 3-5 years. Let’s say you paid $750 for your dent protection plan. That means you will have to make
5 dent repair claims that are covered before you break even on the contract. If you live next to a careless neighbor or coworker who dings you daily, it might be worth it. However, most people don’t even make a claim that is covered. Those that do make a claim and have their dent repaired rarely make a second claim. The “bean counters” know this, and that is why so many third-party companies now offer this cash making machine to car dealerships. So do your research and make sure you have exactly what the policy covers in writing. More importantly know what is NOT covered before you buy the plan. Please read the fine print.
Bottom line: Common sense says to save your money and contact a local dent repair provider you can research and choose on your own terms.