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Old 03-15-2016, 10:40 AM   #1
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Extended Warranty Service Markup

I recently had extended warranty service done to replace my AquaHot system. My deductible is $250, however, the service cost was over $1400. Good Sam extended warranty covered the list price for the system, but Leales RV Service added a markup over list price. They never did this for extended warranty service before, so I am wondering if anyone else has experienced a markup above what extended warranty covers.
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Old 03-15-2016, 11:31 AM   #2
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How did you find out what GS "list" price was ? Did GS indicate the max $$ for this AquaHot replacement in your contract ?
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Old 03-15-2016, 11:53 AM   #3
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I called GS and they said they covered the list price. The service center did not explain whether they paid list or a wholesale price. They explained they charge a markup because it was a specialty item. GS did say that is unusual to charge a markup.
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Old 03-15-2016, 12:05 PM   #4
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A service provider can charge whatever they want, as long as they tell you up front. You then have a choice to say yes, or go somewhere else if you feel the service/product price is too high.

If you have been tot his place before, I'd go back and share the prices of what others were charging for the parts. Ask him to consider you have been a repeat customer, and politely say that you would like to remain so. IMO, a price fluctuation of 5% between places is reasonable. As depending upon the product, they all may have different sources and or price points with a product provider.

You could also call Good Sam, and ask them to intervene on you behalf, as like it or not - they can make a difference on a place of business if they don't recommend them as a service point for their warranty business.

Best of luck to you,
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Old 03-15-2016, 09:19 PM   #5
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It depends on two things.

Ethics of the service provider and maybe their ability to purchase the part.

Just suppose the dealer is not factory authorized to deal with e the part in question so they may not be able to get dealer cost so they pay retail just like you and mark it up.

Ethics play a part here too.

They could be getting discount but know they can push to get more.

Or if the cannot buy discount or are not authorized then huge flag as did the work get done correctly.

A shady place may add a service fee then offer a rebate or credit to cover deductible to be used down the road.

Seems some questions need to be asked.
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Old 03-16-2016, 07:09 AM   #6
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Wow! I have never heard of this. I would go ballistic if I was told I would have to pay more than my deductible. Especially if it was AFTER the fact. The reason to have an ESP is so you know upfront, your deductible, what you'll be liable for.
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Old 03-16-2016, 07:36 AM   #7
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There is a lot of "it depends" here.

To start with if Leales RV Service is not part of the Good Sam network then it cost them more just to jump through the Good Sam hoops.

Good Sam has been known to low ball what they pay. They may also have wanted to supply the parts so they captured any markup. No idea here.

Then there are the other practices already mentioned.

Leales RV Service is not in the business to lose money nor should they be in the business to screw people. You will probably never find out the whole answer as to what happened. What is Leales RV Service's reputation otherwise? That may tip you off. The take away for most of us is probably to understand what the deal is going in.
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Old 03-16-2016, 07:39 AM   #8
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Wow! I have never heard of this. I would go ballistic if I was told I would have to pay more than my deductible. Especially if it was AFTER the fact. The reason to have an ESP is so you know upfront, your deductible, what you'll be liable for.
It has happened to me more than once. The ESP only paid for so many hours and the dealer said it took more time than that so I had to pay for those hours above and beyond my deductible.
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Old 03-16-2016, 08:16 AM   #9
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Many of these warranties specify a specific type or price they will pay.. And manufacturers "list price" isn't a bad deal. Many of them refer to a prevailing price - which is often lowest online, without shipping...

I think it's a fairly common complaint when not using an "in network" repair facility.

The things they don't tell you when selling you a warranty...
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Old 03-16-2016, 05:14 PM   #10
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I had meant to also add to my post. That the willingness of the Service Provider to 'champion' on behalf of the customer, can also make a difference in how much is coming out of pocket. No one should be better equipped to go back to the warranty company, and explain why the allocated shop labor hours are not enough, or why the price is different at their location for parts.

Now, I've never had a extended warranty, so no first hand experience. But I have heard of how important it is for a shop office person, or the manager, to work with the extended warranty to help maximize both theirs, while at the same time helping the customer with the lowers possible out of pocket price. (This does take time for a person to do, and I understand that time is money. But, this was a a 'Repeating customer'. It seems I'm hearing more and more cases, usually in and around large cities, where shops have been rubbing long term customers away... Have no idea why, but my BIL just stopped going to a shop he'd been going to for 16 years. Loved the mechanic, but some reason the Manager's attitude had changed over the course of the last few years.)

Best to all,
Smitty
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Old 03-17-2016, 04:01 AM   #11
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Well Smitty, BTDT. All it takes is a different service manager or accountant worrying more about maximizing profit than doing the best job. If we are the owner/stock holder we cheer the book keeping. If we are the customer we cheer for the mechanic.
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Old 03-17-2016, 08:29 AM   #12
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Wow! I have never heard of this. I would go ballistic if I was told I would have to pay more than my deductible. Especially if it was AFTER the fact. The reason to have an ESP is so you know upfront, your deductible, what you'll be liable for.
You are dreaming if you think an ESP means you never pay more than the deductible. Maybe the sales guy said that, but nowhere does your contract promise it. There are things not covered (e.g. parts shipping, ancillary things in a repair like belts & hoses and sealants), and there is always the possibility the shop charges more for a given part or service than what GS (or another provider) will pay. Not to mention repairs that simply aren't covered at all.
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Old 03-17-2016, 09:28 AM   #13
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You are dreaming if you think an ESP means you never pay more than the deductible. Maybe the sales guy said that, but nowhere does your contract promise it. There are things not covered (e.g. parts shipping, ancillary things in a repair like belts & hoses and sealants), and there is always the possibility the shop charges more for a given part or service than what GS (or another provider) will pay. Not to mention repairs that simply aren't covered at all.
No one is dreaming but when you take it back to the dealer where you bought the RV and the ESP and the contract says for a covered item you pay the deductible that is all you should have to pay. The dealer got prior approval and knows what they will get paid for the repair. If there is any additional charges the owner should be notified. The dealer has us over a barrel we either pay it or they keep the RV. It could be a way a dealer to make more money off the ESP and the owner.
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Old 03-17-2016, 05:31 PM   #14
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What happens is that the shop (dealer or otherwise) gives you an estimate for the repair, at his regular rates for whatever parts & services are involved. The better shops also get the reimbursement amount when they get the repair authorization from the insurer (ESP or other) and relay that info to the RV owner. It may be just the deductible, or it may be more, for any number of valid reasons. Then you decide to proceed with the job or not.

The service center doesn't have the ESP user any more or less "over a barrel" than any other customer. The shop quotes their price and you decide if it's worth the cost to get it done. The shop gets paid the same amount whether part of the price comes from ESP or is all comes out of your pocket.
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