Archived Copies of Warranty Week

December 2002 to Today

Homebuilding Warranty Report: Warranty expenses are rising but so are new home prices, keeping the average amount of money accrued industry-wide after each closing relatively steady, and allowing the accrual rate as a percentage of revenue to actually decline a bit. But many homebuilders continue to raise and reduce their warranty accruals rather impulsively, and sometimes skip them altogether.
June 28, 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
Telecom Equipment Warranty Report: Claims and accruals have fallen dramatically in the past decade, both in terms of dollars and as a percentage of sales. Mergers and bankruptcies were a major factor, but so were cost-cutting efforts. Now, however, expenses are rising again and sales aren't, so expense rates are creeping upwards.
May 18, 2017
Declining Accruals in Detroit: This news can't wait for summer: Ford and General Motors set aside less in warranty accruals per vehicle sold last year than ever before. Thanks to a well-timed coincidence of rising sales, falling warranty costs, rising reliability, and reduced recalls, the top two passenger car and light truck makers in Detroit are cutting their warranty expenses to just a few hundred dollars per vehicle sold.
February 25, 2016
Warranty Reserves & Foreign Exchange: The rising value of the U.S. dollar is impacting revenue, profits, and even warranty expenses. For U.S. companies, it's hurting exports. And for international companies in the U.S., it's helping to reduce the cost of imports and to increase the value of warranty reserves.
October 22, 2015
Twelfth Annual Product Warranty Report: Warranty expenses are once again rising and so are the associated expense rates. Much of that has to do with the increased cost of passenger car recalls, and some of it is caused by the soaring sales of smartphones. But could it be that some of the most successful warranty cost-cutters have let things slip back a little recently?
March 19, 2015
Warranty Year in Review: While some companies enjoyed record highs on the stock market, others suffered as rising warranty costs cut into profits. Some even went out of business. And top automakers once and for all proved how useless the TREAD Act is when it comes to protecting customers.
January 8, 2015
Computer OEM & Supplier Warranties: Are the computer OEMs paying a growing or shrinking percentage of the warranty costs of their industry? Are the warranty costs of their suppliers rising or falling as a result of their efforts to make them split the bill?
September 4, 2014
Supplier Recovery Efforts: Are the automotive OEMs paying a growing or shrinking percentage of the warranty costs of their industry? Are the warranty costs of their suppliers rising or falling as a result of their efforts to make them split the bill?
August 21, 2014
New Home Warranty Report: Sales are rising and home prices are increasing, but warranty costs are remaining the same. So the cost of new home warranties as both a percentage of sales and on a per-home basis are declining, in some cases to record low levels. Is this the beginning of a long-awaited recovery in the new home industry?
January 30, 2014
New Home Warranties: Sales are rising and so are some warranty expenses. Builders and their suppliers, slammed by the recession, are getting back to normal. But who is figuring out their accruals per home and why are they doing it so badly?
April 18, 2013
Dell's Extended Warranties: Though its hardware sales have flattened, the importance of Dell's extended warranty program continues to rise. While a few years ago it was twice as large as the product warranty operation, now it's four times larger. And it accounts for a rising percentage of the company's total revenue.
January 24, 2013
Most Improved Warranty Metrics, Part 1: While many companies manage to reduce the percentage of revenue they spend on warranty, some do it better than others. Rising sales helps. So does building a better product. And then some companies are merely returning to normal after ending a "warranty excursion."
October 11, 2012
New Home Warranty Report: Though sales keep falling, claims are rising after several years of declines, and the accrual rates are holding steady. So is the worst over? Or are there homebuilders out there with bigger problems ahead of them?
May 19, 2011
Eighth Annual Warranty Report,
Totals & Averages: When sales fell, so did warranty costs. But even though sales are rising again, warranty costs are remaining low as a percent of sales. That reflects a change in reliability, and caps a multi-year success story resulting from the increased attention paid to warranties.
April 1, 2011
New Home Builders & RV Makers: Even among the survivors of the Great Recession, warranty costs are now rising to alarming levels. And for some builders, home sales are still falling year-over-year. The result is a state of affairs where warranty work is financed from a shrinking pool of reserves.
October 14, 2010
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
Extended Warranty Insurance Companies: All four of our imaginary investments are up, with AIG rising the least and Assurant rising the most. And now our hypothetical extended warranty stock fund has grown with the addition of four more insurance companies that also underwrite service contracts.
August 5, 2010
Aerospace Industry Warranties: In an industry that puts a premium on safety and reliability, warranty costs rarely stray far from the baseline. And while many aviation companies cope with the double whammy of rising warranty costs and declining sales, some such as Boeing and Gulfstream are actually seeing sales rise and claims fall.
October 1, 2009
Warranty Trends in 2008: With the filing of the last few financial reports of this cycle, it's time to look at warranty costs by industry. The big story in 2008 is how falling sales have made warranty claims less affordable for some companies. Warranty reserves peaked at the end of 2007, but claims are still rising. And for hard-hit sectors such as autos and homebuilding, the worst may still be ahead.
December 18, 2008
Medical Equipment Warranties: While claims are increasing, sales are rising a little faster in the medical and scientific equipment industries. And at least eight companies have cut their warranty expenses by big percentages over the past five years.
October 2, 2008
RV & New Home Warranties: Sales are declining so claims rates are rising. But a few homebuilders have radically cut the amount they set aside per unit sold, raising suspicions that they're intentionally estimating low. Meanwhile, homes on wheels continue to show higher warranty costs.
June 20, 2008
Product Warranty Claims, 2003-2006: Signs are emerging that suggest a peak in warranty spending by American manufacturers. Is it better management? Shorter warranties? Or could it be nothing more than sales rising faster than costs? With four years of data to examine, there's evidence for each scenario.
April 11, 2007
Warranty Claims Automation: For a motorcycle manufacturer and a home appliance manufacturer, it wasn't so much that their warranty systems were broke or that their costs were rising. It was just that their old warranty processes were inefficient and couldn't keep up with company growth.
April 4, 2006
Top 50 Warranty Providers: While 20 saw declines in the percentage of revenue spent on warranty claims, all but 12 paid out more claims in dollars during the first half of 2005. Rising product sales made the difference.
August 30, 2005
Declining Warranty Claims: In both dollar amounts and as a percentage of product sales, warranty claims took a steep dive during the first quarter of 2004. Was it caused by cyclical factors? Was it due to rising sales? Or has there been a product quality improvement?
June 15, 2004
Jetliner Warranties: In the good old days, the airlines and aviation parts manufacturers already swamped by regulatory paperwork had little time for the additional bother of warranty claims. But in an era of falling revenue and rising costs, warranty has suddenly become very important to both operators and their suppliers.
March 2, 2004