[stressdoc]

So I was thinking that it's not fair for those drivers that take good care of their cars to basically be subsidizing the warranty repairs of those that do not. Why not fine tune warranty coverage to fit the owner. This would be more equitable, and might encourage better maintenance & and driving practices. Of course it would invite a ton of bitching and arguing. But it might at least be feasible for deciding pricing for extended warranties. Kind of like the procedures that go into CPO assessments.

The detailed data available now via FASTA could be used to judge mechanical wear and driving patterns.

[noro]

Originally Posted by stressdoc

So I was thinking that it's not fair for those drivers that take good care of their cars to basically be subsidizing the warranty repairs of those that do not. Why not fine tune warranty coverage to fit the owner. This would be more equitable, and might encourage better maintenance & and driving practices. Of course it would invite a ton of bitching and arguing. But it might at least be feasible for deciding pricing for extended warranties. Kind of like the procedures that go into CPO assessments.

The detailed data available now via FASTA could be used to judge mechanical wear and driving patterns.

This is one of those theoretically perfect ideas that will never work in the real world. The amount time and money needed to manage individualized patterns not to mention how subjective the decisions are going to be. Basically it will create a bureaucratic clusterfuck.

[LionRampant]

Warranty repairs in the current sense are not affected by individual behavior nearly as much as the property/medical coverages of traditional auto insurance. The underlying assumption in warranty coverage is that products are made with a certain degree of uniform quality, and deviations from that quality (failures) are due to design, material, or quality control problems on the part of the manufacturer. Under normal operating conditions, a warranty repair is expected to be no more or no less likely for one user than for another. Most warranty agreements provide exception for issues caused primarily by user behavior or environmental factors, and focus on the quality of the product rather than the conditions in which it is used.

I have been a member of a demographic on the wrong side of the insurance actuarial tables my entire 18-year driving career. I would imagine that allowing warranty coverage to be varied based on factors other than product and process quality would not be favorable to many of the folks here in the enthusiast community. Service centers could effectively choose to discriminate via pricing or coverage decisions against anyone whose behavior in their view increases the chance that a warranty failure will occur. Accelerate too fast, put a different set of wheels on, or brake hard to avoid a collision on the freeway, and you might well find that your next mechanical issue is tied to your behavior.

The current warranty system provides limits on what sort of interpretations a service center can make when determining warranty coverage. Open that up, and it may well be that anything the center doesn't want to fix becomes tied to factors that deny coverage or increase the cost beyond reason.

--LR

[stressdoc]

We are in a new world of information. The diagnostics for auto mechanicals are becoming much more precise. In the near future one should be able to take a BMW in and have it evaluated via computer in great detail -- how many miles left on brakes, clutch, rings, etc. One would think that this info would be of interest to sellers of warranties.

[Lassaxi]

Originally Posted by LionRampant

I would imagine that allowing warranty coverage to be varied based on factors other than product and process quality would not be favorable to many of the folks here in the enthusiast community. Service centers could effectively choose to discriminate via pricing or coverage decisions against anyone whose behavior in their view increases the chance that a warranty failure will occur. Accelerate too fast, put a different set of wheels on, or brake hard to avoid a collision on the freeway, and you might well find that your next mechanical issue is tied to your behavior.

Car dealerships can already do exactly what you've described under existing warranties. I think you've missed the doc's point. The model would not be to deny claims after the fact. The model would be to try to assess who is taking care of their cars and who is abusing them, and to charge those who are abusing them more for warranties up front.

I don't know how easy it would be to discern between those who care for their cars and those who abuse them, but in theory it sounds good to me. I certainly don't think I should have to pay as much for a warranty as all those people who have messed around with their boost, intakes, and exhausts. Frankly, I think if you've changed your factory tuning, you have no business making a warranty claim on any part that's affected by your mod.

[LionRampant]

Originally Posted by stressdoc

One would think that this info would be of interest to sellers of warranties.

Originally Posted by Lassaxi

Car dealerships can already do exactly what you've described under existing warranties. I think you've missed the doc's point. The model would not be to deny claims after the fact. The model would be to try to assess who is taking care of their cars and who is abusing them, and to charge those who are abusing them more for warranties up front.

I don't know how easy it would be to discern between those who care for their cars and those who abuse them, but in theory it sounds good to me. I certainly don't think I should have to pay as much for a warranty as all those people who have messed around with their boost, intakes, and exhausts. Frankly, I think if you've changed your factory tuning, you have no business making a warranty claim on any part that's affected by your mod.

Ah. A bit of clarity in subject line and initial post limiting this concept to extended warranties might have been called for, but perhaps I merely missed the implied limitation. The prices of extended warranties are certainly more applicable to the maintenance history of the product, and I agree that there is, or may soon be, sufficient information available to make very educated guesses about extended warranty risks based on that history.

Not all extended warranties are purchased after significant history has been incurred, at least currently. Those offering extended warranties would therefore have incentives for those purchasing with a bit of positive history accumulated, while those bought at vehicle purchase time would have some middling cost based on broader risks, given no available history. The losers would be those who did not take care of the vehicle and waited to pick up the extended warranty, of course.

The issue then becomes "what historical factors come into play when determining pricing?" Wear factors like those mentioned by stressdoc above would be helpful, as would usage patterns (high RPMs, hard braking, frequent DSC invokes, high miles/year, high city-highway ratio) and repair history (collision repair, modifications). As long as some loose association between these risk factors could be drawn to potential failure, the price of the warranty would be increased.

I'm not certain it would work with the "single price for a number of years or miles" model that is currently employed. It would almost need to be a subscription model similar to traditional auto insurance that periodically checked factors and adjusted the price for the next period.

--LR