You sold a car as-is and days or weeks later the customer asks you to make some repairs. Should you eat the cost and do the repairs? In this article, we define what goodwill repairs are, the risks associated with them, and why dealers should avoid them.
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What are Goodwill Repairs?
When a dealer sells a car to a customer and the customer calls the dealer up days or weeks later and says, “I’ve got this problem with the car. It shouldn’t be happening.” Instead of taking the car back and giving the customer their money back, the dealer decides to make the repair and says “You know what, this $50 fix, I’m just going to eat it, and I’m going to do it for the customer.”
This is called a goodwill repair– the dealer is repairing out of goodwill.
Why Goodwill Repairs Are Risky
Maybe a dealer is trying to avoid rescinding a sale or maybe they are trying to be a nice person when offering goodwill repairs. Regardless of the reason, it is risky. Most dealers don’t recognize that when they do goodwill repairs, doing so creates a warranty.
Just because a car is an as-is sale doesn’t mean that after-sale repairs are also as-is, unless the customer signs a disclosure form, notifying the customer and acknowledging that this goodwill repair by the dealer does not create any additional warranty. We have seen too many cases where a dealer makes a goodwill repair, thinks they simply did a nice thing for the customer, and it turns out the repair either doesn’t fix the problem or the repair eventually fails, and the original repair becomes a much more expensive problem. In this case, there is an implied warranty provided on the repair that is not disclosed by the as-is of the initial vehicle purchase.
What Dealers Should Do
Given that a goodwill repair can create an implied warranty, it is always best for goodwill repairs to come with their own separate as-is disclaimer. This is especially important if the dealer intends for that repair to not be warranted.
How We Can Help
If you are looking for more support when it comes to understanding goodwill repairs or you are currently navigating this issue, you can book a strategy session with us here. We’ll personalize your counsel and guide you through everything to ensure your business is protected.
You can also find more information at www.georgiacarlaw.com.
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