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Navigating Warranty & Service Contracts: How to Approach “Standing Behind What We Sell”

By Kristen Faber
Published on November 15, 2024

Disclaimer: The content shared herein should not be construed as legal advice and is only designed for discussion purposes. Please contact your legal service provider if you have any questions.

Jacob Bryce, founder and President of Machinery Scope, sits down with Aaron Lunt, an attorney and shareholder at Meenan Law. In this insightful conversation, they break down the differences between warranty types: standard warranties, implied and express warranties, extended warranties, and extended service contracts. The discussion provides valuable takeaways for both equipment dealers and equipment owners on effectively managing risks and protecting their investments.

Machinery Scope Program Highlights:

  • Tractors up to 15 years old and 5500 hours
  • Skid loaders, mini excavators, compact wheel loaders, and telehandlers up to 15 years old and 3500 engine hours
  • 3 levels of coverage: Powertrain, Powertrain+, and Ultimate
  • 3 deductible options
  • Easy qualification process
  • Coverage available for a wide range of makes and models
  • Simple claims process with excellent reimbursement rates including MSRP on parts, posted shop rate, and travel time / mileage.
  • Our contracts are backed by A rated insurance so that you can be assured that we are here for you long term.

About Machinery Scope:

At Machinery Scope, our experience in farming and equipment dealerships fuels our commitment to developing innovative risk management solutions. We aim to shield equipment owners from the financial impact of major mechanical failures through tailored extended service contracts. Our focus is on providing exceptional value and ensuring a smooth experience from the initial quote through the claims process. We work hard to safeguard your equipment investments, giving you peace of mind and allowing you to focus on what matters most.

About Meenan Law:

Based in Tallahassee, Florida, Meenan P.A. offers comprehensive legal services, including extensive regulatory and litigation experience. The firm assists clients in navigating challenges with government agencies by providing creative, effective solutions. Meenan’s expertise spans several sectors, including insurance, healthcare, and motor vehicle service contracts, and they offer nationwide support with tailored compliance programs across all 50 states and the District of Columbia.

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Equipment Extended Warranty FAQs

Having been in the business since 2013, we’ve put together a list of the most commonly asked questions we hear regarding Extended Warranty. If you have a question you can’t find here, please feel free to contact us.

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What type of equipment qualifies?
What types of coverages are available?

The parts covered are the main difference between each plan. It is important to review the breakdown of what is covered by each level of protection being offered in the terms and conditions of the coverage.

  • Powertrain: This plan includes the components pertaining to the engine and transmission that oil touches. Our plans will also provide coverage on additional related components.
  • Powertrain+: Covers the hydraulic pumps and valves. In some instances, Powertrain+ will need to be purchased to cover hydraulic drive components, such as factory installed rear-wheels assist on combines.
  • Ultimate: covers several components often found in comprehensive coverage but is not to be considered “full machine” or “bumper-to-bumper.” Covered components include, but are not limited to emissions components, starter, alternator, engine block heater, ac compressor, factory installed auto steer, front axle suspension, ROPS and FOPS.

We are always happy to talk through the details of the different solutions that we can offer so that you have the information and full transparency to decide what is best for your operation.

What are the benefits of having extended warranty on my equipment?

There are numerous reasons why having an extended warranty plan might make sense for your operation. Besides being a risk management tool on your operation, having extended warranty remaining on used equipment will translate to improved resale value. For example, we estimate that used equipment with at least one year and 250 hours of coverage will have improved resale value between 1% and 5%. For dealerships, equipment that has coverage will sell more quickly than those that do not (assuming everything else being equal).

Most importantly, an extended warranty plan can save you from the financial burden of a major repair bill. Extending the protection on your equipment provides peace of mind by helping to turn an unknown variable cost into a known fixed cost.

What are the key differences between all the companies that offer coverage?

Most OEM’s offer some type of coverage. There are also independent providers, such as Machinery Scope, that offer coverage for a wide range of equipment types, makes, and models of equipment. We are proud to offer our solutions to equipment dealers so that we can protect their mainline offerings as well as competitive trades. Machinery Scope is also proud of being deeply rooted in the equipment industry, both in our farming operations and within the equipment dealerships. Our roles within the equipment dealership have included, sales, sale management, operational management, service technician, and service management. We understand this business and we are proud to leverage that to make it easy for our dealers and their customers to do business.

Another key distinction from one program to the next is how the programs are financially supported. Programs can be fully insured, reinsured, bonded, or backed by the financial strength of the administrator and/or the company offering the policies. Additionally, commercial extended service contracts are regulated differently by each state. Certain terms, products, and or programs will vary from state to state. It is not unreasonable to ask questions. At Machinery Scope, we administer the plans we provide and are proud to be backed by CNA to provide you with a product that you can count on when you need it most.

What factors determine how much my plan will cost?

As you can imagine, the cost of the coverage varies. This will depend on the following factors:

  • Age of the equipment
  • Current hours
  • Type of equipment
  • Horsepower
  • Usage
  • Prior claims history on that model (or series)
  • Requested Years of Coverage
  • Requested Hours Per Year
  • Coverage Type (Powertrain, Powertrain+, or Ultimate)
  • Deductible