Even more on flat rate...

Interestingly, the hours side of the warranty reimbursement equation is, like the dollar side, also subject to review, in two important ways. One, a dealer may submit a suggestion for flat rate revision, which if accepted by the manufacturer ends up benefitting all dealers, not just the one submitting the suggestion. It must be made on substantive grounds proving the time allotment unrealistic. It is seldom approved, though I have seen it happen. Second, a dealer is also able to call the manufacturer and make the case for a one-time, just for them augmentation to the scheduled warranty hourly flat rate. This request is almost automatically granted by some manufacturers, less often by others. To sum up, a dealer has two kinds of flat rate. One is the warranty flat rate, the other is the retail flat rate, and the latter is typically twice the warranty rate. There are also two aspects to warranty reimbursement, the hours reimbursed and the money per hour reimbursed, which are multiplied together to arrive at the actual rembursement to a given dealer, via that dealer's parts account. The dealer's host manufacturer has complete control over the warranty time and dollar amounts, but virtually no control over the retail time and dollar amounts, and for that matter over most of what goes on in the dealership, depending on the manufacturer. In fact, OEM control is what we'll explore next.