National Repair Centers Offer Competitive Alternative to Dealerships

By P&A Staff Writer

For service contract administrators looking for an alternative to dealership service departments, national repair centers can be a cost-effective option. Jack Bachinsky, vice president of marketing at Aamco Transmissions, Inc., talks with P&A Online about the low national pricing structure and technical expertise these retail businesses can provide.

Partnerships Build Business for Warranty Providers

Tier One Warranty, a third-party administrator based in Houston, saw its labor rate go down in 2009 when it started working with Aamco. Claims manager Matt Dryer says this benefit was even experienced in high-dollar locations like Chicago, New England and California.

The labor rate is set at today's standards, which saves money for warranty providers and vehicle owners. And because Aamco provides its customers with full versions of its fleet pricing book, third-party administrators can determine the worst-case scenario price up front.

"Aamco is very flexible and most stores are full service," Dryer says. "Our customers like this because when they travel, commute or relocate, the warranty on Aamco repairs is covered nationwide."

Bob Detmer, claims manager for O’Fallon, Ill.-based Marathon Administrative Co., says over half of Marathon's customers go to Aamco for repair work. Finding a location anywhere in the country is easy and customer satisfaction is high, he adds.

"Our business was founded in 2000 and we started working with Aamco about two years ago," Detmer says. "They're good people to work with and we look forward to continuing the relationship going forward."

Bachinsky: The main benefits that warranty companies receive are competitive pricing across a national footprint, a nationwide warranty, priority service at all of our centers, the technical expertise to ensure claims work is done right and the knowledge that their contract holders at the time of repair will recognize a strong brand. For example, Aamco enjoys 96 percent brand recognition among transmission customers.

How does the claims/inspection process work?

Bachinsky: In the many years AAMCO centers have been working with contract administrators, we have come to understand the unique claims/inspection process. No work is initiated without proper authorization and our center personnel are familiar with the claims process and working with third-party inspectors.

Do you partner with any other national suppliers?

Bachinsky: As a national chain of nearly 900 retail centers, AAMCO has national relationships with many parts suppliers assuring competitive pricing.

What products does Aamco offer that administrators might not be aware of?

Bachinsky: While AAMCO is certainly recognized as the "transmission" specialists, we also provide total car care services for our national accounts. For nearly a decade now, AAMCO has become a one-stop source for all services and repair work.

What trends have you seen in claims in the last few years? What do you see happening in the near future?

Bachinsky: As the average age of vehicles on the road has increased, we have seen more customers with extended service contracts. The latest Automotive Aftermarket Industry Association (AAIA) data projects that soon the average car on the road will be 11.1 years old. Light trucks averaged 9.5 years and cars averaged 10.1 years as recently as 2006. We anticipate these trends continuing due to current economic forecasts.

Do you see other trends related to the administration of vehicle service contracts?

Bachinsky: As the OEMs have lengthened their power-train warranties, we have seen a dramatic increase in "wrap-around" contracts. AAMCO is committed to helping administrators control costs, getting vehicles serviced more quickly, keeping them on the road longer, and offering the peace of mind of a nationwide warranty.