Well Warranted

Dec 2, 2009

Warranty issues are a definite concern of all involved in the automotive performance aftermarket. They’re a concern to the OEMs and dealerships that make and sell the cars. They’re a concern to the manufacturers and jobbers who create and then sell and install performance parts. Most importantly, they’re a concern of the consumer.

The consumer has to weigh the fun and full experience of an upgraded vehicle versus the potential pain and headache of issues that sometimes arise with aftermarket parts. Those issues rarely have anything to do with an actual problem caused by the performance part. Instead, issues arise because of the potential for a problem. And, many would-be enthusiasts look at that situation and decide to save themselves the trouble. The result is the aftermarket misses out on a sale, and looking at the big picture, misses out on an opportunity to grow the entire market.

Developing Solutions

We know all of this thanks to research conducted by SEMA and aftermarket companies, including Superchips. In response to that research, SEMA and Superchips have independently developed warranty programs to solve the problem and calm consumer concerns.

Tom Bennett, president of Superchips, notes, “We’ve been conducting consumer research for years. But, in the last four or five years (with the advent of the Internet and using the Internet for update capability), we’ve really begun to mine data on what consumers’ needs are, their interests, what features they’d like to have for their vehicle in the future, reasons for their purchase and so forth.”

Bennett says Superchips has also been talking with consumers that have inquired with Superchips but have decided not to buy.

Bennett continues, “We ask them why they didn’t buy, what their reason was for not purchasing a programmer. One of the top reasons was concern about the factory warranty. Shoppers would ask, ‘What does it do to my factory warranty?’ The other one was, ‘Even if I’m out of my factory warranty, what does it mean to my engine? I’m always concerned about this black box talking to my engine. What is it going to do to my engine over the life of my vehicle? Am I going to push it to its limits? Am I going to exceed its limits?'”

SEMA received similar responses to their own research, and so began to develop a program to address those concerns: ProPledge.

“ProPledge is a program that, at its core, is designed to help expand our industry’s market by addressing concerns that come up in the warranty area. At the end of the day, it’s a program that’s expected not just to maintain or to assist in solving a problem but to actually grow the market,” says Chris Kersting, president and CEO of SEMA. “It addresses potential problems that people might have, and through that, we expect it will help expand the market.”

Superchips developed a warranty program as well, which is included with their new Cortex line of programmers.

“We came up with this powertrain warranty,” says Bennett. “And again, it was just to give people peace of mind and to bridge that uncertainty with how the programmer would affect things. It says, ‘Regardless of how we do our art and our science, in terms of programming, calibrations and providing performance through flash-based programming, rest assured that if you use this product, your engine and transmission will be safe.'”

How Do Warranty ProgramsHelp The Jobber?

These warranty programs (ProPledge for SEMA’s and Superchips’ is included with their Cortex line) help jobbers in a variety of ways.

Kersting notes, “The program is set up very specifically to help our installer-level professionals address some of the concerns that car dealerships often have when considering adding accessories as a profit center.”

Those include questions about whether they’ll be able to offer their customer a similar three-year, 36,000-mile warranty or better, as they expect to receive with the vehicle.

“It addresses the matter of liability insurance coverage for the dealer from those who are involved: both the installer and the manufacturer,” says Kersting. “It also gives the jobber a great sales package, materials we put together working with all of the parties involved. When that jobber makes a presentation, he has the tools. He has point-of-purchase displays and a whole packet that helps explain to the dealer why they will benefit and actually be able to create a new profit center and how to do it. That’s a powerful tool,” says Kersting.

Just as Superchips has started their warranty program by offering it exclusively with their Cortex line, SEMA is rolling out ProPledge incrementally. The ProPledge program is currently half-way through its pilot year, and the pilot is limited to a number of markets around the country. This allows SEMA to experience the program in a controlled environment in terms of overall volume. They can then learn from it, tweak it and get it to a point where SEMA feels comfortable moving it to a broader, national scale.

“The pilot has been going very well up to this point. We expect that at the beginning of 2009, we will begin rolling the program out from its initial pilot phase to cover an additional 10 to 15 markets across the country. We began with 10 markets. We’re also hoping to expand the number of manufacturers who are involved in the program,” says Kersting.

The Coverage

While the warranties offered by SEMA and Superchips are meant to relieve consumer fears, they’re hardly token gestures. These are strong warranties.

Detailing the Superchips warranty included with Cortex programmers, Bennett says, “It’s a two-year, 100,000-mile powertrain warranty for the hard parts of the engine and transmission, the ones that typically could be harmed by significant power upgrades.”

Bennett adds that Superchips assumes, based on years of experience, that their programs truly do no harm to those hard parts. They’re merely optimizing vehicle performance and are not exceeding the vehicle’s engine or transmission capability.

“But, we’re trying to create a program that will give people peace of mind to know that we know what we’re doing so well that we’re willing to stand behind it with the warranty. But, in the event that something were to go wrong, it’s always nice to have that protection available to make the customer’s vehicle whole and healthy again,” says Bennett.

He adds that they’re currently considering expanding the coverage for their whole line of products, but Cortex is being used to test the waters, not so much for Superchips but for the insurance company they’re working with to provide the warranty. Again, that Superchips’ warranty is two years, 100,000 miles-whichever were to happen first.

“The subtle thing about it is it’s not an incremental 100,000 miles; it’s the total on the odometer. So, if your vehicle had 45,000 miles on the odometer when the Cortex programmer was installed, you’d have either two years or the balance up to 100,000 on the odometer or 55,000 miles. If you had a vehicle with 90,000, you’d probably hit 100,000 before you’d use the two-year duration,” says Bennett.

Kersting notes that the ProPledge warranty is a 3-year, 36,000 mile warranty. He adds that the ProPledge program is built into the pricing for the product and installation.

“There is no additional charge to the consumer, no additional warranty that they have to buy or that a dealer has to sell. It’s part of the manufacturers quality insurance standing behind the product as well as the installer’s quality insurance standing behind the product,” says Kersting.

In Case Something DoesHappen

In the case that an issue does arise, Kersting says there is material that is distributed to the consumer, at the time of purchase and delivery of the vehicle, to help them be able to report any sort of warranty issue, repair or replacement issue that they might have. It can be done one of two ways.

“They can either use the customer-service center that is a part of the ProPledge program, and as I say the material and information about that center is provided at the time of purchase. Or, they can call the dealership, and the dealership will then see in the records for sale of that vehicle that the product is covered by the ProPledge warranty and will put them directly in touch with the installer or handle it through the installer themselves,” says Kersting.

OEMs and Dealerships

These aftermarket warranty programs are great, and it’s safe to say they will be welcomed by OEMs, which makes one wonder, did Detroit contribute at all to these new programs?

In the case of SEMA, the answer is yes, says Kersting. “The program was created, in part, through efforts we made bringing in focus groups and roundtable discussions that involved our members, people from the dealership community and from the OEM community. Naturally, because we were creating something completely new here, we really needed the input from all of those different aspects in order to understand how to shape this thing up best, to be really useful and really successful.”

Kersting actually has experience in indemnification legal work. “When I worked for SEMA doing both legal and government affairs work, I spent a good deal of time addressing what were concerns from our member companies having to do with warranty. Warranty, of course, is a topic that covers a couple of different areas. It’s the warranty that our own members offer, and it can involve the warranty that the vehicle manufacturer offers. This is why we brought together the OEMs and the dealership community when we formed up this program. We knew it wasn’t simply the warranty issues from the standpoint of our members. It also involved the vehicle warranty.”

Kersting feels that the car dealerships and OEMs helped SEMA create a well-rounded program. For instance, the program offers a warranty on both the part and the installation for the consumer. But, the program also allows SEMA’s professional installer community to go to the dealership with this program and let them know that it also includes insurance indemnification from the manufacturer and the installer to that dealership, up to five-million dollars per incident, for anything that might happen in connection with the installation or use of these products.

“That was a great additional element to the program that we were able to build into it through our communication with the dealerships and the OEMs,” says Kersting.

Initially, Superchips had some discussions with all of the OEMs, and they also talked with their aftermarket performance divisions, Mopar for example, about using programming technology to enhance the vehicle experience post-purchase or even at the point of sale. Bennett, who used to work for Chrysler, says they’re warming up to it in some cases.

“But for this particular program, we didn’t talk with them directly, but we did emulate some of the things that they offer, in terms of the parts that are covered. The coverage is very similar to what you would find in a factory warranty,” says Bennett.

Thoughts & Reasoning

As this article comes to a close, it should be noted that this is just the beginning. Other aftermarket companies are looking to add warranty programs, either through ProPledge or on their own. It’s also important to note that these warranty programs have not been created in response to vehicle failures of any kind. They have been created as a gesture toward new car owners, and by extension, new car dealerships and the OEMs. It’s a way for the aftermarket to say, “We know these performance parts do not cause harm, and here’s a warranty to prove it.”

Bennett adds that, “As the economy gets going again, I think we’re going to begin attracting a new buyer, a buyer that’s been casually observing the market from the outside, kind of waiting to see until they have a little more money in their pocket. And, I think when they’re ready to start buying and become an enthusiast, they’re going to see this coverage, and think, ‘That’s the kind of thing I want on my vehicle.'”

He continues, “When you consider that the market is really looking for another wave of innovation right now, I think things like what I’ll call services on the back end of products, like a powertrain warranty, are a really compelling message for strong aftermarket consumer brands. If the industry were to really embrace concepts like this, it could really make those casual enthusiasts sitting on the fence right now, whether it be on programming or any other product, to become enthusiasts. If we don’t do that, then we’re just going to continue talking to the core we’re talking to right now. There are just too many buyers out there that just need a couple of reasons to buy. As an industry, if we work on that, we could really grow the market.”

Let the innovation begin; consumers are ready to ride the wave.