How Mediation Solved A $3000 Car Repair Problem

  • 7 min read

With permission, we’ve been allowed to talk about a mediation case that’s a good example of what might be a solution for a relatively small dispute. This case had to do with a car dealership and a vehicle owner that were in a dispute over the repairs on the vehicle. The customer had purchased a vehicle from a dealership and it was relatively new. It was about two or three years old. And it had relatively low miles about 35-36,000 miles when they bought it. And they drove it for about two or three months and then it started to have some pretty significant electrical problems. Now, this vehicle was under a factory warranty. But the factory warranty was five-year 60,000 miles for the engine and powertrain, but it was only three years 36,000 miles for the other items like electrical shocks brakes all the other components. So this vehicle was just outside of the warranty for the bumper-to-bumper warranty. It was still in the powertrain warranty but not in the bumper-to-bumper. And the problem with this vehicle was it was having fuel injector problems where the fuel injector electrical system was not firing properly and it was running rough installing and it just wasn’t working. So they brought it into the dealership where they purchased it from which happened to be the same brand of vehicle that they bought. And they gave him an estimate of $2,800 to fix this problem. And they said look, we just bought this car four months ago, and now you’re hitting us up for almost three grand to fix it. Not fair. Well, it’s out of warranty Nothing I can do. And they were in a dispute with this dealership. And they talked about filing a lawsuit or filing a complaint with the licensing board for that state for dealerships. And the dealership wanted to do something but their hands were tied. They can’t just you know pay for something that’s not under warranty. So a colleague of the vehicle owner suggested a mediation. And the mediation cost $380. And they convinced the dealership to at least pay half, the dealership had actually paid 200 and the vehicle owner paid 180 to do mediation. 

As a mediating firm, we looked at the case. We looked at the warranty, we looked at the repair bills we looked at the estimate, and we looked at the contracts. We talked to the vehicle owner and we pointed out some things to both parties. Look, both parties wanted to come to a solution. The dealership didn’t want to get sued, they didn’t want to have an unhappy customer. The customer just didn’t want to pay three grand. They understood and we found this out by talking to the customer individually, the dealership was never going to get this information. The customer said look I know when you buy a used car there’s some risk, right things might go wrong. I just didn’t expect it would be that much. Well right there, there’s your answer. The answer is not so much I have a free car nothing goes wrong with it full warranty, the answer was, look, if I drove it for a year and something happened it was a couple of hundred dollars I would expect that. I drove it for four months and it needs three grand. So right away there’s already some common ground talk to the dealership separately. The dealership said look, we understand that we want to stand behind our vehicles we checked it out here’s where we inspected the vehicle before it went out the fuel injectors are working fine. Everything was working fine Here’s our copy of our inspection report and evaluation of this vehicle before we sold it. So they operated in good faith. They checked out the car, it’s not just that they sold it without evaluating it or diagnosing it. And they said we’d like to try to warranty but the factory won’t warranty it because it’s outside the mileage. And they had some common ground to they, they felt for the customer but it just was too big of an amount. So right away there’s already getting closer together. In looking at the reports we also found that there was a code that had been repaired on the vehicle computer for the emission system where the emission system has an oxygen sensor, an O two sensor, and the code was resetting. And the dealership fixed that cost them a couple of hundred dollars. They fixed it before they sold the car. So in looking at that and reading through some technical manuals we found that that oxygen sensor might have something to do with the fuel injecting system. It’s a stretch. It was a reach. It wasn’t exactly a direct connection. So we had their service manager contact the claims department for the manufacturer. And say look, we have this vehicle, technically it’s out of warranty, but when we fixed this O two sensor it was still in warranty. It only had 35,000 and change on it. We fixed the O two sensor. We think that this fuel-injecting system was part of the problem back then it just wasn’t diagnosed. So we want to warranty it after the fact. Normally, they have to do it within 90 days, this was outside 90 days it was four months. But the warranty department of this manufacturer said, you know it’s a gray area, we’re willing to pay some of it we’ll pay for the parts and the parts are going to be maybe $800

Now you have 2,800 minus 800, which leaves 2000. The dealership said look we’re willing to kick in some of the labor but, and we pointed this out, in four months they had driven almost 10,000 miles. So they’re putting a lot of miles on this vehicle. It’s not like they just drove it back and forth to work. They had driven 10,000 miles in four months and that’s a lot of mileage. So the people recognize they had some liability in this too. So the way it worked out was the manufacturer kicked in 800, the dealership, kicked in a thousand, and the customer kicked in another 700. You might think well that leaves them short 300. Well, where they found the difference was they found a way to do the repair that had less labor. They save three hours of labor at a hundred dollars an hour by doing the repair a different way. So to make a long story short the customer came out of pocket 700 and they were happy. The dealership came out of pocket a thousand, and they weren’t as happy because technically it’s out of warranty, but at least now they resolve the problem without having to go to court without getting sued. 

The only reason this happened is that a third party a mediator looked at all the stakeholders and found what their common ground was, and what were the things they already had in common. And put those things together to come up with a solution. The parties wouldn’t have been able to do this on their own because we all have egos. We want to be right. We don’t want to admit something. You don’t want to acknowledge something that the dealership doesn’t want to acknowledge. Look we’re willing to do something because now you can be taken advantage of as the customer, who didn’t want to acknowledge. Look we understand there might be repairs because you’re not willing to admit that to the dealer because you might be taken advantage of. A third-party mediator is a good option to look at the big picture and find things that people already can agree on. Put those things together and that way you’re only solving the gap. You’re only solving the difference. And you’re also putting a fresh face on the conversation to keep adversarial feelings from escalating and making the problem worse or not solving it in the first place.

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