Is $7.5 Million Worth a Process Change?

Most dealerships at the very least conduct some form of multi-point inspection and inform the customer about any needed repairs discovered during the inspection. But what happens if those recommendations aren’t properly documented?

Well, failing to document those recommendations can be an expensive mistake – and not just because you miss out on any future revenue as you cannot follow up on declined recommendations. There is a whole other side to the importance of documentation as relayed in a recent Automotive News’ Fixed Ops Journal article, which tells an interesting story about a very expensive lesson a California Ford dealer had to learn the hard way.

According to the article, the dealership purchased a Ford F-250 at auction then sold it to a customer who returned it complaining about “multiple steering problems.” The dealership then resold it and the new owner subsequently brought it into the service department with similar complaints.

The issues were never resolved and, sadly, while towing a van the truck had a blow-out and rolled over twice, resulting in permanent injury to the driver. And, of course, the driver took the dealer to court.

As the dealership could not provide documentation proving that it had, in fact, informed the owner of the worn ball joints, the jury awarded the driver a $7.5 million settlement against the dealership.

If you do not have a good system for documenting your service recommendations, it’s time to update your technology — you are leaving future revenue on the table and are also at risk for similar litigation.

Many solutions now exist that could prevent this verdict from happening. I recommend having the tech do a video walk around on an iPhone, an iPad or Android Phone, then storing those video recommendations in the cloud.

First and foremost, I don’t believe that any dealer would intentionally withhold service recommendations – especially those that could endanger their customers. And, according to the dealer, they did inform the customer… but couldn’t prove it. That is why it is so important to make a record, AND have it stored in a way that is fast and easy to access. You can then follow up with the customer for future service revenue and protect your dealership from any liability issues.

No court could hold you liable if you recommended service, the customer declined it then unfortunately had an accident due to a part left unrepaired. But only if you have the evidence to prove it!