Archived Copies of Warranty Week

December 2002 to Today

Truck, RV & Car Warranty Snapshots: The pandemic lockdowns hit the consumer vehicle makers hardest, and the farm equipment makers the least, as one would expect when commuting to the office is forbidden and food becomes an essential business. The good news is that the downturn may have hit bottom in the second quarter, with third-quarter data pointing towards a V-shaped recovery, as both sales and warranty accruals rise proportionally for many companies.
November 12, 2020
U.S. Auto Warranty Metrics: In 2019, warranty metrics improved for Tesla and deteriorated for GM and Ford. While Tesla still sets aside the most funds per unit sold to finance future warranty costs, its current claims rate is one of the lowest in the business. And while GM and Ford spend less per vehicle, their vehicles also cost less, and their costs have been rising for several years in a row.
March 5, 2020
Jet Engine Warranty Expense Report: On the one hand, the warranty expenses of the top engine makers are setting record highs. On the other hand, that increase could be caused by the non-aviation product lines of some of these conglomerates. But we might know the answer soon, as some of those product lines are spun off.
October 17, 2019
Top Japanese Automaker Warranty Expenses: Toyota and Honda continue to recover from their recall-related spikes in warranty costs. But for Nissan Motor Company Ltd., there's not much change to report. The company's warranty expense rates have remained stubbornly close to one percent for more than a decade.
July 25, 2019
New Home Warranty Expense Rates: Some industry metrics are at their highest level in more than a decade, and one set a new all-time high. And none of the builders are using the sleight-of-hand accounting tricks they employed before the last recession. So is there any substance to these talks of an imminent industry downturn?
November 29, 2018
Tavant Signs Kubota: The second time around, experienced customers will perform sophisticated analyses of warranty claims processing platforms before making their choice. One company graded vendors on 350 different metrics before deciding which platform they were going to buy.
September 20, 2018
Building Materials Warranty Report: Warranty costs are generally rising in recent years among the suppliers of building materials, fixtures, and furniture. The latter group has seen the most noticeable cost increase, though expense rates across the industry are still generally on the low side (below one percent of revenue).
June 14, 2018
Apple's Warranties & Service Contracts: Although it is one of the world's largest warranty providers and extended warranty administrators, both programs used to be even larger. Using figures from Apple's just-published annual report, we estimate the size of each.
November 9, 2017
Recreational Vehicle Warranties: If the old saying that no news is good news, then there's plenty of positive tidings coming out of the RV manufacturers. Homes on wheels, which fared much worse than either site-built homes or passenger cars during the last downturn, have nothing to say about the timing of the next one.
October 19, 2017
Warranty Analytics: One is an online service. The other is a suite of Salesforce components. Both are attempts by warranty management companies to package their vast expertise into easy-to-use and low-cost warranty analytics capabilities.
May 11, 2017
Aerospace Warranty Expense Report: Because one major airframe manufacturer has now separated its warranty and extended warranty accounts, the aerospace industry totals and averages are in disarray. However, many OEMs and suppliers continue to cut their warranty costs, setting new record lows for their expense rates.
April 13, 2017
WCM Preview, Part One: Given that so much of the knowledge and wisdom in the warranty management profession is passed on verbally, this annual gathering of product protection industry experts is an unrivaled opportunity to hear both vendors and their customers tell the stories of their journeys.
February 23, 2017
Service Contract Pricing: Microwaves: Built like electronics but sold like an appliance, the microwave oven is a hybrid of two different product categories. And with service contracts costing almost 19% of the product's price on average, it also has one of the highest average costs of protection. And there's a big difference in the cost of protection plans for units priced at the high or the low end of the market.
February 2, 2017
Reflections of a Warranty Researcher: One of the world's leading warranty researchers takes a look back at the most recent 35 years of his illustrious career, noting some of the people, places, and publications he's connected with over those decades. But he's not done yet, and he's proposing three additional topics for further research.
December 22, 2016
Apple's Warranties & Service Contracts: Not only has the company grown into one of the world's largest product warranty providers, but it's also running one of the world's largest extended warranty programs. However, while iPhone sales were down by 12% in 2016, iPhone protection plan sales were down by even more. Is it the competition? Or are consumers buying fewer iPhone extended warranties from Apple?
December 15, 2016
Service Contract Pricing: Wi-Fi Doorbells: One of this holiday season's hottest products is likely to be those video doorbells that let homeowners see who's knocking even when they're away. But they're so new to the market, the technology is so unproven, and the risks are so unknown, that a large part of the service contract industry seems reluctant to offer protection plans for them.
November 17, 2016
Service Contract Pricing: TVs: Although the average price of a TV service contract is 17% of the TV's price, there is a tremendous amount of variation. One administrator wants $30 to protect a $400 TV while another wants nearly 2/3rds the price of a high-end Sony set for a service plan.
October 6, 2016
Consumer Reports' 2006 Extended Warranty Ad: There was panic in the industry when one of the most trusted consumer advocates told its readers not to buy extended warranties. Ten years later, the magazine's advice is almost forgotten, and the industry is bigger than ever.
September 29, 2016
Warranty & Corporate Inversions: Although warranty has an effect on taxes, the movement of a company's headquarters from a high-tax to a low-tax country doesn't seem to change its warranty claims or accrual rates. The merger of product lines has a much bigger effect, no matter what their nationality. But in at least one case, a company leaving the U.S. decided to cease complying with warranty reporting rules.
August 4, 2016
Solar Equipment Warranties: While product warranties that last for one or two decades are reassuring to buyers, they're not worth much unless funds are available to pay claims. That means betting on young startup companies eventually becoming old industry veterans. But who knows how reliable a system installed now will be in 10 or 20 years, and how much it will cost to repair or replace?
July 28, 2016
Planning and Structuring a Successful Warranty Transformation Program: One of the biggest mistake companies make is failing to consider the needs of customers and stakeholders in other departments. Others fail to articulate the business benefits internally, or they fail to consider industry trends that will impact the warranty process.
June 23, 2016
Apple's Warranty & AppleCare Programs: Not only has the company grown into one of the world's largest product warranty providers, but it's also running one of the world's largest extended warranty programs. And smartphones are one of the hottest product categories for protection plans.
December 10, 2015
Extended Warranty Conferences: Both the show in Chicago and the one in Nashville last month were generally regarded as advancements over their 2014 editions, with better presenters, more people, and much improved venues. But they're still not in the same league as the conference held in March, according to people who have been to all three shows.
October 15, 2015
VW's Emissions Warranty Scandal: Some students cheat on tests. But companies rarely do, because the cost of getting caught is very high. And in the long run, someone usually snitches. So isn't it ironic that a bunch of students caught one of the world's largest manufacturers cheating on a test?
October 1, 2015
Warranty Accruals for New Homes: When a new home is sold, the builder sets aside a specific amount of money in the form of warranty accruals to cover its predicted warranty costs. Some builders do a consistently good job, accruing roughly the same amount per home sold from one season to the next. But others raise and lower their accrual rates over incredible ranges that seem to have little to do with predicted warranty costs.
August 13, 2015
International Consumer Goods Warranties: One good reason that not much is ever written about the expense of covering consumer electronics with product warranties: costs generally aren't that high. Except for laptops and smartphones, the expense rates for most consumer electronic products are generally quite low. But there are some big gaps in the amount of warranty data that's available, outside of a handful of top industry brands.
July 30, 2015
Sports Equipment Warranty Report: The makers of ATVs, jet skis, snowmobiles, and other sports vehicles are very serious about reducing their warranty expenses. But the makers of hockey sticks, helmets, camping gear and other equipment aren't. So for one side of the sports industry, warranty costs are dropping. But for the other, costs remain the same.
June 18, 2015
New Home & RV Warranty Report: Put a home on wheels and its warranty costs rise. While the warranties on traditional site-built homes typically cost the builder about one percent of selling price, the warranty cost of mobile homes is somewhat higher. And the warranty cost of modular, prefabricated homes may be highest of all.
May 21, 2015
Semiconductor Industry Warranty Report: While the companies making semiconductors and printed circuit boards have kept their warranty expenses below one percent of revenue, the companies that make the machinery that actually manufactures the products pay much more. Even so, over the past decade the machinery makers have been much more successful at cutting their warranty expenses than their customers.
May 14, 2015
Top 100 Warranty Providers of 2014: While we can't directly compare one company's warranty expenses to another's, we can compare each company to itself over time, and then compare the magnitude of the changes. What follows is a list of the manufacturers that have raised or lowered their warranty expense rates the most from 2013 to 2014.
March 12, 2015
New Home Warranty Accruals: While the average homebuilder sets aside about one percent of revenue to cover warranty costs, the average new home is expected to cost around $2,500 over the life of its warranty. Luxury homes will cost more, but even some average-priced units have high warranty costs. It all depends on the builder.
December 18, 2014
Apple's Warranty & AppleCare Programs: It's not the kind of thing the consumer advocates like to report, but one of the world's leading electronics manufacturers and retailers is giving its customers a break, paying more warranty claims, keeping extended warranty prices steady, and giving customers a better value proposition on their product protection plans.
October 30, 2014
Material Handling Equipment Warranties: Most of the companies that manufacture equipment to handle, move and store materials have kept their warranty expense rates below one percent. But a few have expense rates far above that level, and some have expense rates that rise and fall dramatically.
July 31, 2014
Farm & Lawn Equipment Warranties: Six months after the peak in sales comes the annual peak in warranty expenses. And while some companies take a pay-as-you-go approach, others have mastered the annual cycle to such an extent that their accrual rates hardly budge from one season to the next.
June 20, 2013
Extended Warranty Conference: The WCM Conference provides both basic and advanced presentations about both manufacturer's warranty and extended warranty issues. So how can one person see it all? This week, we look at the sessions most appealing to extended warranty professionals.
March 7, 2013
Warranty Conference: Opening in two weeks, the WCM Conference provides both basic and advanced presentations about both manufacturer's warranty and extended warranty issues. So how can one person see it all? This week, we look at the sessions most appealing to manufacturer's warranty professionals.
February 28, 2013
Average Warranty Costs per Industry: One can get a good idea of the industries where warranty is most important by looking at both the amount they pay and the percentage of sales that those payments represent. And the data suggests that automotive, computers and appliances are at the top of the list.
May 31, 2012
Extended Warranty Survey: At long last, warranty researchers are publishing the results of surveys and vendor assessments, as the industry matures and the appetite for analysis and expertise grows. One study was released and another was previewed at this week's WCM Conference.
March 8, 2012
Automotive Warranty Report: As vehicle makers get back to normal and sales rebound, one thing that's not bouncing back is their warranty expense. Key warranty metrics continue to decline, including claims as a percentage of revenue. And once again, the warranty reserve fund balances of the top vehicle makers and their suppliers are growing.
September 22, 2011
How to Buy Extended Warranties: Step One: Read the contract. Research the terms and conditions of the service contract while you compare the prices and features of the products themselves. Then use your common sense and Google to decide if the extended warranty offer is a deal worth adding, or if you should shop elsewhere.
August 25, 2011
Warranty Reserves vs. Accruals, Part One: With 32 quarters of data, it's becoming easier to see which companies carefully calibrate their warranty budgets and which make it up as they go along. Here are the "scores" for the top three in each of six industries.
June 16, 2011
WCM Conference, Part One: With less than two weeks until the annual WCM Conference opens in San Diego, we take a look at some of the major themes expected. And almost every speaker has the same advice: don't try to do it alone without help from some of the warranty industry's experts.
March 3, 2011
Appliance Service Contracts: While hard data is difficult to find, one retailer discloses lots of details about extended warranty sales in its financial statements. But as detailed as these metrics are, they may not apply to other less forthcoming retailers.
January 6, 2011
Data Storage Warranties: Sales are once again rising and warranty costs are falling or at least remaining under control, despite longer warranty durations. But while some companies are cutting their warranty costs for real, at least one is merely changing the way it reports the numbers.
September 23, 2010
INDS Signs with Virginia Surety: One of the largest vehicle service contract administrators has selected one of the largest service contract underwriters to help it diversify and expand.
July 29, 2010
Top Auto Insurance Companies: One would expect a high correlation between those offering auto insurance policies and those offering vehicle service contracts or mechanical breakdown insurance to consumers. But Zurich is the only one with a major presence in both.
June 25, 2010
Retail Auto Parts Warranties: While many of the major auto parts chains are willing to go above and beyond the warranties that manufacturers offer on products such as batteries, most are reluctant to begin selling service contracts. But at least one retail chain has taken that step, and has also begun to offer extended warranties on its own labor services.
June 10, 2010
Vehicle Service Contract
Attachment Rates: Has the chaos of the Great Recession actually increased the appeal of vehicle service contracts? Auto dealers aren't selling as many as they used to, but for at least the past five years roughly one out of every three customers has bought one. And the recent trend seems to have been upwards, as unlikely as that sounds.
January 28, 2010
Home Warranty Scam? There are good extended warranty companies and there are bad extended warranty companies. One of the worst seems to have a policy of denying all claims over $100 for what at first seem like legitimate reasons, and then hiding from the angry mob behind the anonymity of its web site, toll-free number, and post office box.
November 5, 2009
New Home Warranties: One CEO recently said the worst of this cycle may be behind us. In terms of sales decreases and price declines, maybe so. But in terms of warranty costs, the worst is right now, as builders have less cash to pay for warranty work on units they sold at the end of the boom years. And then there's the question of how costly the defective Chinese drywall will turn out to be to replace.
September 24, 2009
Used Auto Warranties: Signs of life are beginning to appear in the used auto industry as partnerships are formed and annual sales increases are claimed. One of the latest deals is struck between the makers of electronic contract and tax form software and a veteran administrator of service contracts sold by used car dealers.
August 6, 2009
Warranty in Financial Statements: Because warranty disclosures began appearing in annual reports less than seven years ago, it takes a bit of skill to hunt down the right data and turn it into meaningful percentages and ratios. So until the procedures are old enough to make it into the accounting textbooks, here's a step-by-step guide to how it's done, using one company's most recent disclosures as an example.
July 30, 2009
Worldwide Auto Warranties, Part Two: It turns out that Volkswagen, BMW, and Fiat do disclose their warranty data, if one knows where to look and what to look for. And thanks to the help of a reader who's fluent in five languages, we now have hard numbers for the warranty costs of more than half the world's vehicles.
July 23, 2009
Auto Part Supplier Warranties: Claims are up a bit but sales are down a lot. And while most suppliers have reduced accruals proportionally, at least one seems to have taken an accrual holiday.
June 25, 2009
Telecom & Medical Equipment Warranties: While Motorola sets the pace in the telecom equipment warranty sector, no one company dominates medical equipment warranties. In fact, if anything, the medical and scientific instrument makers are known for consistently low rates of warranty spending.
April 2, 2009
Warranty Experts: It's one thing to hear software salesmen talk about the benefits of their products. It's something else when that company's own customers stand up and say how happy they are, despite the challenges they had to overcome. And when warranty professionals gather next month in Orlando, multiple warranty experts from major manufacturing companies will do just that.
February 20, 2009
Warranty Cost per Vehicle: If one has a figure for warranty accruals and for annual sales, one can quickly calculate an estimate of what a given automaker expects to spend on warranty claims over the life of its vehicles. And better yet, all the complexities of warranty durations, local currencies, labor and parts cost are built into the estimate.
July 16, 2008
WCM Workshops, Part One: The day before the opening of the Warranty Chain Management Conference next month, attendees have a chance to hear two experts talk about the pitfalls of relying upon seemingly simple statistical measures of warranty cost.
February 14, 2008
NEW Acquires ServiceBench: One is a leading service plan administrator and call center operator. The other is a major network hub for warranty professionals. Together they can set the standard for warranty claims processing, customer care, extended warranty administration, service dispatch, and end-of-life recycling.
January 23, 2008
Extended Warranty Shopping: Everybody knows that prices vary from one retailer to the next, but the prices they charge for extended warranties vary even more. And while some retailers sell their products low and their service plans high, others discount both while a few overcharge for both. So while some bundles are rip-offs, others could be seen as compelling bargains.
November 28, 2007
Dell's Warranty Accounting: While it came up short in terms of scandal and financial impact, Dell's accounting investigation did produce one benefit. At long last, the company separated its basic and extended warranty programs. And it turns out that extended warranty was even bigger than we thought.
November 7, 2007
Automotive Warranties: Are claims soaring or falling? It depends how you slice the market. One way is to compare OEMs to their suppliers. Another is to group OEMs by the size of the vehicles they make. Either way, passenger car and light truck makers always seem to end up paying the most.
September 11, 2007
The Chief Warranty Officer: Having detected something of a plateau in warranty activity, one speaker at the WCM Conference calls for the creation of a job position that cuts across the many departments with interests in warranty.

Yet some top executives still see warranty as nothing but a cost that needs to be reduced, and pay little attention to its potential to increase customer loyalty or build a brand's image of quality. Perhaps that's why a warranty champion is needed?
March 20, 2007
Disk Drive Warranties: As our warranty tour continues, we've finally found a product segment for which warranties vary tremendously from one company to the next. And competitive marketing strategies seem to matter more than either product specs or price.
August 22, 2006
Peripheral Warranties: With computer printers and monitors, older technologies frequently get longer warranties than new. And while one would think higher prices mean longer warranties, that doesn't seem to be the case.
August 8, 2006
Warranty Research: As one important new warranty research project concludes, another is beginning. AberdeenGroup's warranty report is now available for download, while APQC's survey questions are available for a first look.
July 18, 2006
Warranty Reporting vs. Analytics: One turns the past into charts. The other turns the future into actionable items. But some people who know the difference between the two don't want to talk about it, for fear that they'll lose an edge on their competition.
July 11, 2006
Warranty Investments: One Wall Street-weary extended warranty administrator is going private while another was swept up by an acquisitive company out to corner the market for mobile phone extended warranties. And then there's ServiceBench, carefully planning its next logical step.
June 27, 2006
Auto Warranty vs. Quality: Does the total cost of warranty have any correlation to product quality? Based on the worldwide claims rates seen for the top five carmakers and quality data collected in the U.S. by J.D. Power and Associates, one does seem to be related to the other.
June 20, 2006
Warranty Conference,
Part Three: Extended warranties may look like easy money to some, but beneath the surface there are lots of moving parts. Here's one expert's how-to guide:
March 22, 2005
Warranty Conference,
Part One: During the kickoff keynotes by HP and IBM at last week's Warranty Chain Management conference, the need to involve people in warranty transformation projects outranked all technical and financial challenges.
March 8, 2005
Integrated Warranties: Assurant Solutions, along with partner General Electric, has quietly built itself into one of the largest and most diversified extended warranty service providers.
December 14, 2004
The Power of One: The Aon Warranty Group has turned vertical integration into a strategic advantage, expanding and acquiring its way to a position where it can sell extended warranties on electronics, homes, or cars, all of which it can underwrite itself.
November 30, 2004
Warranty Outsourcing: For one service contract administrator, discretion is a virtue. Some clients don't want anyone to know they outsource claims administration. Some don't even want their names to appear in print.
November 23, 2004
Public Warranty: Of all the companies in the extended warranty business, most are either small units within very large companies, or they're family-owned or privately-held companies. Only one is publicly held, and lately that's been a problem for them.
November 16, 2004
Warranty Intelligence Software: How does one launch a warranty software company that attracts John Deere and Whirlpool as early customers? And how does one attract the CIA as both an end user and an investor? Perhaps it takes equal parts skill, spunk, and luck.
May 11, 2004
Warranty Industry Associations: Until recently, nobody thought warranty could support a trade association, especially one that crosses industry boundaries. But when a warranty seminar held in a Detroit suburb in the middle of the week sells out, you can bet people will take notice. So who can host a talking shop for warranty professionals?
April 27, 2004
FASB Non-Compliance: While most of the major US-based manufacturers now include the warranty tables mandated by FASB FIN 45, at least one-in-five have chosen non-compliance. What happens to them? FASB says they can be called non-GAAP companies, but the SEC says little about enforcement plans.
December 29, 2003
Warranty Software: In the automotive market, sooner or later virtually every software package has to interact with warranty data. And why not? Warranty is a $9 billion activity for vehicle manufacturers, with a direct impact on the bottom line. It's also one of the best available measures of a product's quality and reliability, and it could be as useful to the engineers as it already is to the accountants.
July 28, 2003