Compliance Benchmarks for Your Dealership’s Service Department

By Keith Whann

If you are like most deal­ers, it’s been some time since you had the paper­work and sig­nage in your ser­vice depart­ment reviewed and updat­ed. This area of the deal­er­ship is often over­looked from a com­pli­ance per­spec­tive.

Incon­sis­tent dis­clo­sures in ser­vice paper­work, miss­ing infor­ma­tion and con­tra­dic­to­ry sig­nage post­ed in the ser­vice depart­ment are com­mon errors and easy tar­gets for state reg­u­la­tors and con­sumer attor­neys alike.

The fol­low­ing is a list of sug­ges­tions to help you set legal and reg­u­la­to­ry com­pli­ance bench­marks for your ser­vice depart­ment:

Paper­work: Deal­ers should have their ser­vice paper­work reviewed and updat­ed on a reg­u­lar basis. Start by review­ing the repair order and oth­er ser­vice relat­ed paper­work to ensure that they con­tain all of the infor­ma­tion and dis­clo­sures required by applic­a­ble law.

Cus­tomers should also be pro­vid­ed with the appro­pri­ate esti­mate choice form before any services/repairs are per­formed and a sys­tem should be in place to obtain prop­er autho­riza­tion for any addi­tion­al services/repairs that become nec­es­sary. The dealership’s war­ran­ty and return poli­cies should also be clear­ly com­mu­ni­cat­ed to cus­tomers and be con­sis­tent in all of the ser­vice paper­work, such as the repair order, repair invoice and after hours repair autho­riza­tion.

Sig­nage: Sig­nage post­ed in the dealership’s ser­vice depart­ment is nec­es­sary not only to make appro­pri­ate dis­clo­sures to cus­tomers, but also to com­ply with safe­ty-relat­ed laws and reg­u­la­tions. You should also have signs that restrict the access of cus­tomers to cer­tain areas. In those areas where employ­ees are per­form­ing ser­vices and repairs, sig­nage should be post­ed explain­ing the prop­er use of safe­ty equip­ment and the safe­ty equip­ment, such as first aid kits, eye wash sta­tions and gog­gles, should be locat­ed in close prox­im­i­ty to the signs and eas­i­ly acces­si­ble.

Ser­vice Depart­ment Poli­cies and Pro­ce­dures: All ser­vice employ­ees should receive infor­ma­tion about the ser­vice department’s poli­cies and pro­ce­dures, as well as appro­pri­ate train­ing. Don’t for­get about pro­tect­ing the con­fi­den­tial infor­ma­tion you col­lect and store in your ser­vice depart­ment.

Make sure the paper­work you are using, the fees you are charg­ing and the sig­nage that you have post­ed in your dealership’s ser­vice depart­ment are in com­pli­ance. Doing so will help to lim­it your poten­tial lia­bil­i­ty and increase your over­all prof­itabil­i­ty.

Kei­th E. Whann, founder of the law firm of Whann Asso­ciates LLC, offers advice to assist con­sumers and car deal­ers in the pur­chas­ing of an auto, and is often referred to as the “Car Coun­selor”. Read the here.

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