What is a Secret Warranty?

If you ever have an expensive part fail on your vehicle after the auto warranty has expired, you may be eligible for a little known program often referred to as a "secret warranty".

What is a Secret Warranty?
Manufacturers usually call it after warranty assistance, a policy adjustment or a good will program. When a manufacturer has a major defect that happens after the written warranty expires, it establishes an adjustment policy to pay for repairs rather than deal with thousands of complaints on a case by case basis. But the manufacturer communicates the policy to regional offices and/or dealers. The auto manufacturers rarely notify the consumer; so only the consumer who complains ends up getting covered by the secret warranty. Often it is the consumer who pays for the manufacturer’s mistake because they never find out about the secret warranty.

Secret Warranty Laws
Currently, no federal law requires auto companies to disclose secret warranties. Four states, California, Connecticut, Virginia, and Wisconsin, have made secret warranty laws to protect consumers from undisclosed defects, and other states are considering secret warranty legislation. The state secret warranty laws already created require auto manufacturers to disclose their warranty adjustment programs by giving direct notice of to affected owners.

How to Find a Secret Warranty
Until the disclosure of secret warranties becomes law, the only way to find out about them is to do some research. First, check the technical service bulletins for your vehicle type and model year. Check Alldata and the NHTSA to see if a technical service bulletin has been issued about the component in question. The service bulletin itself does not prove that the auto company has a secret warranty, but it does show that a defect or problem exists for which the manufacturer has had to develop a repair. Finding the bulletin could save you a lot of money in repair costs. The bulletin to look for is the one that tells the dealership how to diagnose and repair the problem. It also will authorize the dealer to make the repairs at the manufacturer’s expense even if the defect is no longer covered by the manufacturer’s auto warranty.

How to Use a Secret Warranty
Once you’ve determined that your vehicle is covered by a secret warranty, the next step is to take it in and request the repair. The best way to do this is to take a copy of the service bulletin that proves the existence of the secret warranty with you when you go to your dealer to get the defect repaired. Without a print out of the bulletin, you may have a more difficult time getting the dealership to repair your vehicle for free.

If the dealer tells you that your vehicle is not covered by a secret warranty and refuses to give you a good will adjustment, your next step is to pursue your claim directly with the manufacturer.

When it has been determined that you are eligible for the secret warranty, a decision will be made regarding the extent to which the dealer and/or the manufacturer will cover it. In many cases, you will end up getting the repair for free, but in some cases, you, the auto dealer, and the manufacturer will split the bill. With smaller repair bills a two-way split, with either the car dealer or manufacturer not participating, is common. Larger repairs will likely involve all three contributing a portion to the final repair bill. If the defect is a safety related defect, the manufacturer must repair it at no cost to you, even if your warranty has expired.