Extended warranty services offered in the sale of second-hand cars has become a major marketing tool in the recent years. Nowadays, almost all authorized dealers facilitate used car sale departments in order to liquidate the inventories build up by trade-inn initiatives. This study illustrates the modeling of expected warranty costs as an important decision support tool in the construction of feasible warranty durations while limiting the long term warranty costs to an acceptable level. Analyses conducted here are based on a data set gathered from a best selling sedan model of a European brand and reflects the failure mechanism of this certain model. However, extended warranties offered by dealers are usually applied to all models with identical terms, conditions and length unless it is a commercial vehicle or it is sold as part of a fleet contract. For this reason, further analysis covering all model spectrum of the brand with data gathered from multiple service points has to be implemented along with trade-off analysis between models. Also, if there are any special terms regarding to the repair policy, such as deductibles, these provisions need to be taken into account. Some used car extended warranties apply deductibles on a per visit basis meaning that every time you bring your car into the service shop for a warranted repair, you must pay a deductible. Changes in the suppliers of crucial parts may also take place throughout the life cycle of a specific model or between models. This effect must be taken into account during failure classification so that it can be identified as an assignable cause (if present) for all parts supplied by the same supplier. This identification can be achieved by obtaining the failure data as periodical snapshots of the service records and analyzing them simultaneously. Such group of failures must be evaluated at a macro level by the higher management. Voluntary or mandatory recalls and their associated budget can cover the cost of these failures. Apart from the analysis of expected warranty cost, variations from the mean cost should also be analyzed. Variance of the warranty cost may especially be important for long term financial and risk planning activities such as hedging and insurance. Validation and verification of the losses incurred by the dealer, as a result of the extended warranty length, should further be analyzed as new claim data becomes available from the sold used cars. Such error analysis and derivation of variance terms for the associated warranty cost models seem promising research directions.


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    Titel :

    Failure analysis and warranty modeling of used cars


    Beteiligte:

    Erschienen in:

    Engineering Failure Analysis ; 18 , 6 ; 1520-1526


    Erscheinungsdatum :

    2011


    Format / Umfang :

    7 Seiten, 2 Bilder, 2 Tabellen, 23 Quellen




    Medientyp :

    Aufsatz (Zeitschrift)


    Format :

    Print


    Sprache :

    Englisch