How to Handle Goodwill Warranty Claims

Quick answer: Handling goodwill warranty claims means getting written approval from the OEM before you repair an out-of-warranty vehicle, documenting that approval on the repair order, and filing the claim under the OEM's goodwill or policy claim type for exactly the amount approved. The approval number and a story that matches it are what keep the claim paid at audit.

Goodwill claims are a powerful tool for customer retention, but they require a distinct process from standard warranty work to ensure you get paid.

What Is a Goodwill Warranty Claim?#

A goodwill warranty claim is a request for the manufacturer to cover some or all of the cost of a repair on a vehicle that is outside its standard warranty, typically granted to keep a loyal customer. Unlike a standard warranty claim, which is a contractual obligation, goodwill is a discretionary business decision by the Original Equipment Manufacturer (OEM).

The purpose of goodwill is to preserve the relationship with a valuable customer who has had a frustrating failure just outside the warranty window. Handled well, it secures their loyalty for the life of that vehicle and the next one they buy. Handled poorly, it sends them to an independent shop.

It is sometimes confused with a "policy adjustment," which is the OEM's decision to cover a specific, known issue on a defined group of vehicles that doesn't have a formal Technical Service Bulletin (TSB) or recall. Goodwill is more personal and customer-specific. The names differ by brand: Ford files approved goodwill as claim type 13, Policy; Chrysler runs it through its Warranty Goodwill request on DealerCONNECT.

Who Pays for a Goodwill Repair?#

This is the central question for every service manager and GM. The answer is usually a split, agreed during the approval, between up to three parties:

• The OEM. The main source of funding you'll seek. Your field representative is accountable for a budget and needs a clear, defensible reason to contribute, so make the "ask" specific and reasonable.
• The dealership. Many stores keep an internal policy or goodwill budget that the service manager or GM can authorize to close the gap, say the OEM covers most of the repair and the store covers a small share to get it done. Track its use so you can see what it returns in customer retention.
• The customer. Sometimes the best offer is a three-way split. Frame it as a partnership: "The warranty has expired, but because you're a loyal customer, we've worked with the manufacturer to cover a significant part of the cost. Your share is X."

The approval fixes the numbers. On a Ford goodwill line, for example, the approved amount is the most Ford will pay: the customer's share goes in Customer Participation, and billing more hours does not raise what Ford pays.

The Step-by-Step Process for Handling a Goodwill Claim#

Successfully moving a goodwill claim from the service drive to the accounting office requires a precise workflow. One misstep can lead to a rejected claim or a future chargeback.

1. Identify the Opportunity The process starts in the service lane. A service advisor or manager recognizes a customer who is just out of warranty, by a small margin of time or mileage, with a significant repair estimate. The ideal candidate is a long-time customer with a verifiable service history at your dealership or another authorized dealer.

2. Set Customer Expectations Explain that you will contact the manufacturer on their behalf to request assistance, and that approval is not guaranteed. A phrase like "We value your business, let me gather the information and see what options might be available" works. Never promise a free or discounted repair until you have written authorization from the OEM.

3. Vet the Request Internally Before you contact the OEM, the service manager should review the customer's history in your DMS. Are they a consistent service customer? Have they bought vehicles from your dealer group? If the customer has never been to your shop, goodwill is a much harder case to make. Also check for an open recall, special service campaign or extended coverage on the part first (see below).

4. Build Your Case Gather the customer's service history and loyalty, the vehicle's in-service date and current mileage, and a clear description of the failure. Your request should include:

   • A clear summary of the failure: what part failed and what the symptoms are.
   • The technician's diagnostic story: a clean, logical narrative of the steps taken to confirm the failure.
   • Supporting documentation, such as photos of the failed component, where they help.
   • Customer loyalty data: a short summary of their service and vehicle purchase history.
   • The "ask": be specific, for example "Requesting OEM participation on parts and labor for out-of-warranty engine repair."

5. Contact Your OEM Representative Reach out through your OEM's goodwill channel: your District Service Manager (DSM), Field Service Engineer (FSE), the brand's goodwill request tool, or its dealer support line. Present your case professionally and frame it as retaining a customer for the brand.

6. Receive and Document Authorization This is the single most important step. Get the approval in writing: an authorization number in the OEM's system, or a formal email from your representative. A verbal "go ahead" over the phone will not protect you in an audit. Chrysler, for example, requires a Goodwill Grid request, and above $2,000 the FCA representative must approve it in DM Notes; the approval number goes in the claim's Authorization field.

7. Write the Repair Order (RO) Correctly The story must describe the customer's complaint, the diagnostic steps (the three C's: Complaint, Cause, Correction), and the repair performed. Add a note that references the goodwill authorization, including who approved it and the authorization number.

8. Submit the Claim File it under the OEM's goodwill or policy claim type and the labor operations the approval directs, which differ from standard warranty ops. Make sure parts, labor and any sublet repairs match the terms of the authorization exactly. Chrysler rejects a goodwill claim whose dollars don't match the approved amount.

9. Close the RO Properly Once the claim is paid, close the RO with every payment applied correctly: the OEM portion, the dealer portion and the customer portion. Open ROs are an administrative and financial liability.

Best Practices for Getting Goodwill Claims Approved#

Following the process is a science, but getting the initial "yes" from the OEM is an art. Service managers who consistently secure goodwill approvals have mastered these practices.

Present a Strong, Data-Driven Case#

An OEM representative is evaluating a business decision. Give them the data they need to justify the expense:

• The customer's lifetime repair spend at your dealership.
• The new or used vehicles the customer's household has bought from your dealer group.
• A consistent service history that shows the vehicle was maintained properly.
• The nature of the failure, especially if it's a known issue with the model, even without a TSB.

Know Who to Ask and How to Ask#

A direct line to your local FSE or DSM is far more effective than a generic dealer support number. Building a professional, trusted relationship with your field rep is invaluable: they know that when you call, the request is legitimate and well-researched. Frame the ask in terms the OEM values: customer retention and brand loyalty.

Document Everything Meticulously#

The RO is your primary piece of evidence. The customer complaint, the technician's notes, the parts listed and the authorization note must all tell a consistent story.

A common and costly mistake is a contradiction within the RO itself. For example, a service manager secures goodwill for a failed strut assembly. But the technician, out of habit, writes, "Customer states they hit a large pothole, and the noise started." That note suggests outside damage and contradicts the basis for goodwill coverage. An auditor will flag it for a chargeback in seconds.

Avoiding Common Pitfalls and Chargeback Risks#

A successful goodwill claim isn't just one that gets paid; it's one that stays paid. Audits often look closely at policy and goodwill claims because they are non-standard. See our guide to preparing for an OEM warranty audit.

• No prior written authorization. If you don't have written approval before you do the work, you have nothing to stand on if the claim is questioned.
• Goodwill for a covered or known issue. If there's an active recall, special service campaign or extended coverage for the component, file it under that program, not as goodwill. Using goodwill to get around a specific program is a red flag for auditors.
• Inconsistent storytelling. Any gap between the RO complaint, the tech's notes and the claim suggests you're fitting a non-covered repair into a covered narrative.
• Policy creep. If you give goodwill for the same issue to many customers, you are effectively writing your own policy, which creates financial exposure and expectations you can't keep.
• Expecting to appeal for more. The approved amount is the deal. On Ford goodwill, for example, a claim can't be appealed for more than was approved, so ask for the right amount up front.

Goodwill vs. Standard Warranty vs. TSB/Recall Claims#

For new warranty administrators and service managers, it's essential to understand the differences between these claim types. Each has its own rules for authorization, submission and payment.

How Forge Handles Goodwill Claims#

The hardest part of a goodwill claim is the relationship: convincing the OEM to approve the assistance. That call stays with your service manager or director.

Everything after the approval is ours. Forge picks up the RO with the approver's name and authorization number, files the claim under the correct goodwill or policy claim type and labor operations, and makes sure every amount matches the approval terms, including the customer and dealer shares. That removes the clerical errors that can turn an approved goodwill gesture into a rejected claim.