Dollar/Thrifty's Unwritten Rule For Mechanics To "Find" Problems Covered By Warranty And Bill The Manufacturer

An unverified reader report has an interesting claim that should grab the attention of every auto-maker. Dudes, Dollar/Thrifty Group car rental is totally ripping you off.

Dollar/Thrifty Group has an “unwritten/kinda-written” mandate that each mechanic who is employed by a store must earn at least $5.25 per car in warranty claims per month. This means that even if a car isn’t in need of any repairs, the company is forcing the mechanic to “find” something wrong with it. Each of the other rental car companies apparently have similar requirements. Basically they have a corporate mandate to stick it to the big three…

More, inside…


I have been around the automotive repair industry for many years and there are a few things that are pretty much a given when you take your car into a dealer for work. The mechanic will always repair your warranty related issue, but more times than not, he will “find” some other problem that was covered under warranty. Sometimes the problem is legitimate, other times it’s not. Warranty “finds” are then billed back to the manufacturer for reimbursement. The problem arises though, when many times, the warranty repair is claimed, a part is ordered, but the work never happened. The mechanic gets to charge more billable hours and earn more pay. This is pretty much standard operating procedure in the industry. It really doesn’t hurt the consumer directly, but I’m sure that through a trickle down effect from the factory, they feel the financial pinch somewhere down the line.

Now each of the mechanics is working on commission, and any decision concerning a warranty “find” is generally left to the discretion and conscience of the mechanic. Some play by the book, others push the limits, and yet others blatantly cross the line. But it’s always a personal decision by each mechanic. There is (as far as I have heard) no overriding directive from upper management to “find” warranty issues. When asked about that by mechanics who are in the know, the response has been “Wouldn’t that be illegal?”

Now on the other side of things we come to the Dollar/Thrifty Group. Like many rental car companies such as Hertz (Ford), DTG has special dealer like relationships with manufacturers (Daimler/Chrysler) where they are classified as dealerships and the staff at their individual stores is approved to perform work on their fleet of cars. This gives them the privilege of being able to claim warranty repairs directly back to the manufacturer rather than taking the car to a standard classic authorized dealer. Depending on the staffing level of each store they choose what level of repair can be performed in-house and what must be sent away to a dealer. Some just do minor repairs, others do full engine rebuilds. Recently, DTG has seen the warranty work as a profit center, and has sent “unwritten/written” mandates that each store must pull in a certain dollar amount per car in warranty repairs. The numbers we had heard were about $5.00+ per car. Some stores have small fleets, others have large fleets of 1500+ cars. What this has done is force the employee’s to “find” problems with the cars. If the cars don’t have problems, the employees are still required to “find” something to make their quota or risk being written up in reviews with the possibility of losing their job for under performing. This corporate policy forces employees to lie and borders on or goes way beyond fraud.

The mandate isn’t actually written into any job descriptions, but it does show up in emails passed back and forth from high up to down below, and in performance reviews that are documented.

The thing that sticks in my craw, is when management is asked if they want the mechanic to “make stuff up” they say absolutely not, but by forcing a quota for earnings from warranty work on vehicles that may or may not have problems is essentially forcing them to “make stuff up”.

I would imagine that this tactic is use by other corporate entities around the work to boost profits, but I would like to think they they could be a little smarter about how they went about it.

Like the man says, somewhere down the line this alleged practice might trickle down to the consumers, like in the form of higher car prices. — BEN POPKEN

Whistleblower’s Anonymous is a program where employees can report to The Consumerist questionable practices within their industry. All reports will remain strictly confidential. Send yours to tips@consumerist.com.

Comments

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  1. Nearsite00 says:

    Thanks for making me feel better about driving with the parking brake on for ten miles in my last rental!

  2. mantari says:

    UPSIDE: Consumers can feel a WHOLE lot better about purchasing rental cars that have been taken out of rotation. Except for Nearsite00′s handbrake thing. You know, the handbrake just makes turns that much more fun!

  3. brad.lane says:

    on a totally unrelated note:

    thank you, consumerist, for not using the phrase “after the jump”

  4. oldhat says:

    UUUUUGGGGH MUST CONCENTRATE!!!!

    Must figure out a reason to give a shit….company cheating another company….must gather some sort of outrage….car companies trying to raise car prices for legit reasons rather than whatever the market will bear is too frightening to consider!

    Nope. Not working. Don’t care. Ha de ha ha.

    Let them turn on each other and demand regulatory agencies fix it..wait, they are declawed and corrupt already? Lawsuits? But then people will accuse them of wasting the court’s time for $5 a month.

    Now my mind is bending inward, time and space is collapsing in on itself, all of existence is in peril!

  5. segfault, registered cat offender says:

    I can find a “needed repair” in nearly every car I rent. Airbag light on, low tire pressure, trim pieces falling off, something stuck in wheel and making noise, etc…

  6. cgarison says:

    Remind me to purchase my next used car from the Thrifty auction. Do they have any Hemi Magnums in their fleet. I am in bad need of a hoonable wagon all of a sudden.

  7. calacak says:

    When stuff like this happens, why do bloggers/news people always single out the “Big 3″. Both Dollar and Thrifty rent Chrysler cars and others are increasing buying Toyota and Nissan cars for their fleets. It’s just not a problem for the “Big 3″ any more.

  8. danio3834 says:

    the automakers have entire departments that are devoted to ensure this type of fraud doesnt happen. While they cant prevent %100, thats why they exist

  9. abgwin says:

    um, doesn’t Cerberus own both Chrysler and a rental car company or two now?

  10. Crazytree says:

    @danio3834: really? what do they call these mysterious departments?

  11. dantsea says:

    I’m the last person who should twitch about grammar, but I’ve got to ask: “Whistleblower’s Anonymous”? Whistleblower’s Anonymous… what? Car? Ice cream cone? Jeweled elephant?

  12. Ben Popken says:

    @dantc: I guess we need to start asking the same of those pesky AA types.

  13. matuszek says:

    Ben,

    dantc was trying to make a joke of it, because no one likes a pedant, but I’ll be pedantic anyway:

    Plurals don’t have apostrophes.

    Q.v., Alcoholics Anonymous.

    Thank you!

  14. matdevdug says:

    This is a weird case indeed.

    On the one hand it is one horrible corporation destroying another corporation, neither one of which has a great reputation with consumers as a general rule. On the other hand this is taking money from a n industry that is really hurting and that keeps tens of thousands of people with food on their table.

    In the end the car companies shouldn’t be billed for work that doesn’t need to be done just on the principle of the issue alone. Just don’t expect me to write letters on their behalf. . .

  15. swalve says:

    It’s just as possible that management is concerned that its fleet vehicles remain in tip-top condition, and equally concerned that any problem with the vehicle is discovered before the warranty period is up.

    Couldn’t it be possible that $5 per month per car is an industry standard for warranty reimbursement, and that management is simply giving the mechanics a trackable target to shoot for? Rather than the fuzzy directive to “keep the cars working good”? Because there IS a difference between “make shit up” and “make an effort to find things that are broken and fix them.” You know, proactive maintenance?

    Ahem. Um, what I mean is, yeah, corporations are bad and other corporations are worse and stuff. Sorry.

  16. quantum-shaman says:

    doesn’t this mean i should buy a used car from dollar/thrifty instead of some screaming guy in plaid pants?

  17. dpeppers says:

    Crazytree they call it the Warranty Audit Department

  18. danio3834 says:

    @Crazytree:

    Most automakers refer to them as “warranty” departments. They employ field reps and fraud investigators as well as analysts that carefully monitor all warranty claims.

    To think that automakers just pay out any ole claim that comes accross the desk is ridiculous. If they authorize a facility to do warranty work, they hold them acountable.

  19. John Stracke says:

    @swalve:

    It’s just as possible that management is concerned that its fleet vehicles remain in tip-top condition

    If that were their concern, they could handle it by penalizing local managers for mechanical problems with the cars.

  20. mattbrown says:

    Is there something wrong with this? I have no problem with a mechanic doing their job. If they would like to exploit my car for a day so that they can find and charge some gigantor corporation instead of me, I’m down.

  21. swalve says:

    John Strake- That’s reactive, not proactive. If I’m right, the idea is to stay ahead of trouble, not simply make people accountable for trouble that’s already happened.

  22. latemodel says:

    The problem is that it is fraud and the dollars involved are increasing the cost of products to the consumer. It demonstrates yet another company that has no ethics and will sacrifice their eternal soul for the LordProfit.

  23. racermd says:

    um, doesn’t Cerberus own both Chrysler and a rental car company or two now?

    Cerberus is the parent company of National/Alamo and recently purchased the Chrysler brand, yes.

    It’s interesting, too. Long ago, National used to be a direct GM subsidiary. I wonder what will happen to the mix of vehicles in their fleets…

    While I’m at it, I have a short story about a car my parents purchased as a used rental car. The ’88 Camry they purchased was involved in a crash before being sold to the public. It was repaired, but always pulled to one side or the other. This was before we knew about CarFax (or before it even existed – I don’t remember as I was just a young’n), my parents tried to get as much information from the dealer about it. They even mentioned the apparent alignment problems. They outright told the dealer that they suspected it had been in a crash. The dealer denied everything, but ultimately agreed to free lifetime alignments.

    Long story short, we got it as straight as we could get it and never looked back. It was handed down to me as my first car, as well. However, to this day, I still don’t trust a used car no matter how well it might look (and even I know what to look for). I especially distrust all former rental vehicles.

  24. Trai_Dep says:

    @matuszek: “Plurals don’t have apostrophes.”

    Sure they do. You put the apostrophe after the “s” in that case.

    Signage does non-grammatical things for stylistic reasons, so they make lousy examples.

    Alcoholics Anonymous: a group of alkies, incognito. Not a group owning an adjective. So no apostrophe.

    …This concludes your grammer lesson for the day. Carry on. :D

  25. Miguel Valdespino says:

    @mantari:

    Umm… NO! The number one reason to never ever ever buy a car from a rental company is self-insuarance. All accidents reported to insurance companies are tracked – which is why you can get a reasonable accurate CarFax report. However, rental companies usually self-insure, so they don’t report problems. Problems like the Chrysler 300 my co-worker bought. It had been submerged. They had replaced all of the upholstery, so it looked new. But there was plenty of electrical damage. Their mechanic found the signs of water damage during the repairs.

    So repeat after me: I will never buy a car from a rental company ever ever ever.