Page 8 - Summer 2025
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Nick Brunotte
Navigating Uncertain Market Conditions President,
The auto market remains volatile. Changing tariffs, production Formula Automotive
pauses and shifting consumer sentiment can make forecasting
new-vehicle sales difficult. The industry expects a summer
slowdown, with analysts noting that buyers may even delay purchases,
with continued tariff and market uncertainty.
In such an unpredictable environment, dealers must focus on what they
can control. That means doubling down on fixed operations (service
and parts) and, in particular, taking advantage of their warranty
reimbursement. Because these funds are legally owed for work already
completed, sharpening your warranty process is a controllable way to
bolster your bottom line when retail sales soften.
Why Warranty Reimbursement Matters
• Legal Entitlement: Nearly every state mandates that
manufacturers reimburse dealers at retail rates for warranty
parts and labor.
• Low Risk, High Certainty: Unlike new-vehicle transactions,
warranty work carries minimal market risk—you’ve already
performed and documented the service.
• Overhead Coverage: Service-department contributions
often underwrite a large share of dealership fixed costs.
Every additional warranty dollar captured flows straight to
gross profit, helping to stabilize technician pay and staffing.
Continue on page 34.
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