Quote:
Originally Posted by Joe-FL
The dealer has to add back in their profit to make your refund whole. Almost all of these extended warranties work the same, no matter if they are on a RV, car, or motorcycle.
For example the dealer can purchase the warranty for $1,500. They sell it to you for $4,000. They just made $2,500 commission. The problem comes in when it is the type of warranty that you can cash back in the unused portion. So the warranty company is only sending a check for around $1,300 to $1,400 for a one month old warranty that is being cancelled back to the dealer. The dealer has to put back almost all of his commission to make the refund to you. Obviously they (the dealers) don't like doing that at all and sometimes drag their feet.
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It's called a charge back in the auto business. Dealers are use to it. I never allowed more than a 10% markup, so when we did get a chargeback it was minimal. Also it was more likely customer would buy and be extra happy when needed.