Warranty and insurance jobs: steady, but slower.

Know your customer

The vehicle owner is present, but the payer isn’t; most warranty issues stem from this divide.

The owner wants their car repaired, indifferent to the process. The payer seeks cost control and documentation. You serve both, and when they clash, you’re caught in the middle.

Clearly inform the owner about coverage, early and in writing, to prevent issues. A surprised customer at collection blames the workshop, not the policy.

Authorisation before work, without fail

This rule distinguishes profitable warranty work from unpaid tasks, often compromised by time pressure.

1. Obtain written authorisation for any work beyond the agreed diagnosis.
2. Log the authorisation reference with the job to ensure the invoice is clear.
3. Understand what you can do without authorisation, especially for safety.
4. Include evidence with your request, as photos are approved quicker than descriptions.
5. Re-authorise if the job expands, rather than assuming the original covers it.

Work done in good faith without authorisation often goes unpaid, with little chance of appeal. The vehicle owner isn't liable, as they were informed it was covered.

Rates and exclusions

Third-party payers typically adhere to agreed labour rates and their own estimates of job duration.

The second part is more crucial than the rate. If a payer uses a standard time shorter than the actual job duration, an acceptable rate becomes poor, visible only by comparing authorised time to actual time.

Also verify exclusions: consumables, diagnosis without confirmed faults, collection, and paperwork costs. These exclusions can turn a seemingly fair rate into a marginal one.

Documentation is key.

In retail, the car leaving is the deliverable. In warranty work, it's the file, and an incomplete file means no payment.

Photos before and after, diagnostic reasoning, part numbers, authorisation reference, and matching invoice are essential. Capturing this as you go takes minutes; reconstructing it later after a query can take an afternoon and may risk payment.

This strongly supports digital inspections in workshops doing third-party work. Evidence is captured as part of the job, not as a separate admin task.

Cash flow, and how much you can manage

Warranty work pays on terms and can be slow, and more of it often worsens the situation.

A workshop with large outstanding claims has lent significant capital to slow companies. This is manageable if planned, but risky if the workshop also holds stock and pays wages on the same cycle.

Setting a sensible limit is wise: a share of turnover from third-party payers beyond which you halt new claims until older ones settle. Deciding this in advance is easier than in a tough month.

Decide if it fits your garage

It's good business for some, a poor fit for others; the difference lies in capacity and admin.

If your bays are often underused, warranty work fills them at a reasonable rate with predictable volume, which is valuable. If you're already full, it displaces retail work that pays more and faster, which is a clear loss.

Without proper admin, it won't work regardless of capacity, as the money in this setup comes from paperwork, not repairs.