Outsourcing Warranty Claims: Costs & Setup
Ben Chapdelaine
Head of Product & Content
What outsourcing warranty claims costs a dealership, how an outside processor gets access, and the questions that protect your paid claims before you sign.
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Quick answer: Outsourcing warranty claims means an outside processor files your repair orders with the manufacturer for you. Most charge a small percentage of paid claims, often 2–4%. The processor works under logins your store issues, so you keep ownership of every claim while the clerical work leaves the building.
For a service manager, the question is not whether claims get filed. They always do, eventually. The question is how many dollars each repair order actually brings back, how fast, and what happens when the one person who knows the portals is out. This guide covers what outsourcing costs, how the access works, and what to ask before you sign.
What an outside warranty processor does
An outside processor takes over the clerical part of the claim: reading the repair order, picking labor operations, entering the claim in the manufacturer's system, answering rejections, and tracking the claim until it pays. Your technicians still fix the car and write the story. Your advisors still talk to the customer. The processor turns that finished work into money.
Forge works this way. Forge picks up the repair order through a limited, read-only DMS user your store sets up once, builds the claim, and files it. No scanning, no retyping.
What it costs: three ways to compare
Compare outsourcing to what your store spends today, using your own numbers. Put the assumptions on paper so anyone can check them.
| Cost line | In-house | Outsourced |
|---|---|---|
| Labor on claims | Hours spent on claims × wage × overhead (benefits and taxes add to the cost on top of salary) | Included |
| Fee | None | Usually a percentage of paid claims (2–4% is common), sometimes plus a flat monthly amount |
| Coverage gaps | Claims stop when the admin is out | The processor covers vacations, turnover and recall surges |
| Missed dollars | Ops, diagnostic time and sublet that never get claimed | Depends on how thorough the processor is |
The fee line is the easy one to see. The missed-dollars line is usually bigger. A claim that is filed short is never rejected, so nobody downstream ever notices the money that wasn't claimed. See how dealerships lose warranty money for where those leaks come from.
How access works
An outside processor needs two kinds of access for each store:
- DMS access. A limited user profile scoped to repair orders, parts lookup and warranty coding. Your store sets it up once.
- Manufacturer access. A user ID on each manufacturer's dealer system with permission to submit warranty claims. Each store issues its own.
Some manufacturers spell out the path. Ford's published Warranty and Policy Manual requires outside claims processors to be registered in STARS under the job "Outside Claims Processing Company - Warranty Processor." It also requires the service manager, parts and service director, or office manager to hold Ford's warranty administrator certification when the store uses an outside processor. Check the current manual on FMCDealer, since policy changes.
How claims leave the building differs by brand. Ford claims are filed in OWS or through the DMS. Toyota and Stellantis claims are entered directly in the manufacturer's portal. A good processor knows which is which for every franchise you hold. For multi-franchise stores, see managing multiple OEM warranty portals.
What you keep, and what you give up
You keep ownership. Claims are filed under your dealer code, through logins you issued and can switch off. Every claim should carry an audit trail you can read.
You give up the daily clerical work and the risk that one person's absence stops the cash. You do not give up control of policy decisions: goodwill, customer pay versus warranty, and anything that needs a manager's signature stay with you.
Questions to ask before you sign
- How fast is a claim filed after the repair order closes? Forge commits to the same business day.
- What do you check on every repair order before filing: labor ops, diagnostic time, sublet, parts markup?
- How do you handle rejections, and how fast?
- What reporting do I get, and how often? Can I see each store separately?
- What does each claim's record show if the manufacturer audits it?
- What happens to my logins and data if we stop working together?
For the warranty-claim basics behind these questions, see the car dealership warranty claim process.
See what your repair orders are leaving unclaimed
The fastest way to judge an outside processor is to see what it finds on your own work. Book a demo and Forge will show you what your recent repair orders left on the table.
Frequently Asked Questions
- How much does it cost to outsource warranty claims?
- Most outside processors charge a percentage of the claims they get paid, commonly 2 to 4 percent, sometimes with a flat monthly fee. Compare that to the hours your own staff spends on claims, including benefits and overhead, plus the dollars that never get claimed today.
- Is outsourcing warranty claims allowed by the manufacturer?
- Some manufacturers describe how it works. Ford's published Warranty and Policy Manual has a STARS job for outside claims processors and requires a certified manager at the store. Check each manufacturer's current policy for the brands you sell.
- Do we lose control of our claims if we outsource?
- No. Claims are filed under your dealer code using logins your store issues and can turn off. You still decide policy questions like goodwill, and every claim should come with a record you can review.
- Is it worth hiring a warranty vendor or keeping claims in-house?
- It depends on your volume, how much goes unclaimed today, and how exposed you are when your admin is out. Run the numbers with your own wages and claim counts. The coverage gap is often what decides it.
About the author
Ben Chapdelaine, Head of Product & Content
Ben leads product and content at Forge, which prepares and files warranty claims for dealerships.
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