Warranty management is a core operation of the aftermarket and majorly impacts how consumers perceive a brand. Aftermarket players with good turnaround times often leverage a loyal customer base and can remain sustainable for decades.

However, for OEMs, warranty claims also translate to added costs that drain the profit. While warranty claims can be avoided by focusing on quality control, ensuring zero equipment breakdowns is unrealistic and impractical. The only solution to resolve warranty management challenges is identifying and tackling them one by one.

In 2026, the need to streamline warranty management is even more important, especially when the competition is tough, and even incumbents are susceptible to market loss. Where competitors are adopting advanced AI technology and transforming their warranty claims operations, here are some solutions you can consider to resolve the most agonizing warranty management issues. 

Resolving Warranty Management Issues: The OEM Aftermarket Guide

Warranty management requires a holistic look. We are going to focus on challenges that hinder speed, quality, processing, and increase warranty costs.

1. Complex Warranty Terms

OEMs have to deal with multiple warranty documents for thousands of parts. The terms and conditions of warranty are also quite complex, including various inclusions, exclusions, key variables, and other factors. We also need to factor in the regional differences and variations for different variants and models.

All such complex terms are created to provide a better value and offering than competitors to customers, but make it challenging to leverage across the dealership. The end result is increased dealer-OEM communication, extended claims processing times, and customer frustrations.

Dealers find it difficult to navigate through such terms and ensure compliance, which leads to unqualified claims getting approval. While OEMs are working on simplifying search terms, searching through complex data, either manually or through automation, is quite difficult.

Solution

OEMs need to improve their drafting and use language that is easy to comprehend for both customers and dealers. To ensure timely updates and accurate policy administration, they must adopt advanced warranty management software, which allows them to apply different warranty terms across regions without delays.

2. High Warranty Frauds

Warranty fraud in the aftermarket can be of various types. Sometimes, the fraudsters use a fake invoice to get a warranty claim, while other times, it is either double booking, using unofficial spare parts, unauthorized servicing, or even dealership involvement. All such types of fraud drain OEM budget and impact service for genuine customers. 

Identifying warranty fraud is difficult for many reasons, including manual errors and the agility shown by fraudsters. No sooner do OEMs identify and come up with a solution for a particular type of fraud than fraudsters adopt and come up with new fraud tactics.

Another reason is when internal corruption is involved. Without proper trail auditing, the dealership members can be involved in fraudulent activities. With them already having access to internal systems, it becomes difficult to identify and distinguish fraud in the claims submitted by them. 

Solution

Because of new fraud tactics being deployed every day and fraudsters outsmarting manual regulations, AI-powered warranty fraud detection remains the only solution. AI-powered claims processing can involve audit trailing, meaning each process and claim filer will be tracked on the system. Additionally, AI can run multiple checks on the system, such as cost of claim, service history, date of purchase, warranty terms, inventory correlations, and more, to rule out a fraudulent claim.

3. Higher Claim Processing Time

Lengthy claims processing, which often requires multiple approvals and includes red-taping, leads to higher claim processing time, frustrating both customers and dealers. However, these are not the only issues that led to such delays. Others include miscommunication between the dealer and OEMs, inventory understocking, or complex technical documentation. 

Nevertheless, it is important to acknowledge that whatever the cause may be, claims processing delays lead to higher resolution times, increased equipment downtime, keep technicians occupied, and are a nuisance for all parties involved in the claim. 

Solution

Integrate a solution with audit trailing and a work queue. With the work queue option, dealers and OEMs can get real-time status on the claim and ensure timely processing. In case the claim is stuck somewhere in the process, OEMs can take follow-ups and resume the same.

4. High Warranty Costs

Another challenge that multiple OEMs face is high warranty costs. According to statistics, OEMs in the automotive industry alone experienced a 17% increase in warranty claims in 2024. In the US alone, companies in the electronics, vehicle, and building trade sectors had to pay $29.176 billion in warranty claims. With such alarming figures, it becomes difficult for OEMs to control warranty costs.

Warranty frauds, internal inefficiencies, and poor supplier recovery also directly contribute to increased warranty costs but are difficult to evade. Similarly, while paid extended warranties do help manufacturers increase their warranty budgets, the revenue generated through them isn’t enough to match the rising warranty costs.

Then come hidden and unexpected costs in warranty, such as part call-back fees or consumables that are not actually covered under the warranty.

Solution

Lowering high warranty costs can be tricky. OEMs need to identify the root cause first, which can be either broad coverage terms, extended warranty duration, or warranty fraud. By resolving these first, OEMs can reduce the warranty costs. Additionally, the OEMs can optimize their inventory forecasting and restocking to reduce logistics costs during warranty claims processing.

5. Ineffective Supplier Recovery

Recovering defective part costs from suppliers is difficult for OEMs. After sourcing parts from third-party suppliers, OEMs often enter into a Product Support Agreement (PSA), which holds the supplier accountable for any defects in the part and ensures OEMs can reimburse any costs for defective parts. Still, because of inefficient communication and a lack of transparency, OEMs face challenges in supplier recovery.

Many times, the recovery process suffers because of delays from the OEM, and other times, OEMs are only able to recover partial costs. Both scenarios are harmful for OEMs, as delays in supplier recovery impact the OEM’s capabilities to process future claims.

Solution

Lack of transparency and miscommunication are often the cause of ineffective supplier recovery. Both can be eliminated with the help of a centralized system where all entities, including the OEM, dealer, and supplier, are available and can see the warranty process. Suppliers can identify if there was a defect in their parts, and OEMs can timely monitor supplier recovery and request reimbursements. 

6. Limited Feedback Loops

Repeated warranty claims are a sign of a bigger issue in the part and equipment manufacturing. There should be constant feedback loops between warranty teams and product development teams to fix the issue and avoid any similar warranty claims. However, because of limited feedback loops, the product development team is not able to work on the issue, and this keeps the number and costs of warranty claims high.

Even to refine the part and provide the best quality equipment to customers, having a feedback loop between warranty claims and product development is important.

Solution

To create transparent feedback loops, OEMs need to work on their internal processes. Both warranty teams and product teams should have access to the platform where the warranty claims data is available. Likewise, the OEM can also utilize the warranty analytics feature of the warranty management software to find parts with the most warranty claims and work on product improvement.

7. Poor Customer Experience

Poor customer experience at the hands of dealers tarnishes the overall brand image of the OEM. Customers show their frustrations online, which damages the reputation of the OEM in a way that even PR and ORM agencies cannot recover. Future prospects start doubting the capabilities of the OEM to provide good aftermarket services, and gradually, sales start to drop.

In many cases, consumers are also likely to switch to a competitor brand after facing a poor customer experience at an OEM. To recover from the damage, OEMs often have to offer discounts and markdown strategies, but these approaches are not sustainable and may not always give the desired results.

Solution

Along with delayed claims processing, the quality of the repair also impacts the customer experience. Thus, OEMs need strict quality control measures over their warranty process. Managing work queues, trail auditing, user management, and multi-channel reporting are some ways OEMs can ensure warranty standards are met. In case of delays, individual queries can be launched to identify and mitigate the issue.

8. Inefficient Return Material Authorization (RMA) Process

In situations where the OEM wants to call back a spare part for R&D purposes, a unique Return Material Authorization (RMA) number needs to be processed. With the help of this unique number, OEM can track spare part delivery and logistic costs. However, your RMA process is inefficient if it is followed by issues like poor data management, high logistic costs, delays in repair, and the inability to identify part failure reasons.

Solution

OEMs can simplify the entire process with an RMA module. Through this module, they should be able to mark spare parts for RMA, initiate shipping, and even assign a unique RMA number for tracking the R&D status of the spare part. In case of delays, OEMs should be able to take follow-ups on R&D and implement changes in production as well.

9. Inefficient Evidence Collection

To process warranties, document and evidence collection is very important. It is based on the evidence submitted that an OEM processes a warranty claim and provides approval. When the evidence provided is not suitable, it leads to claim rejections, longer processing times, or increased back and forth between the OEM and dealer. According to statistics, 30% of warranty claims are rejected primarily because of insufficient evidence. 

Solution

The warranty claims processing system of the OEM should have a document verification system to ensure that all policy guidelines are met. Without the verification, the system should not allow dealers to submit a claim. Likewise, the dealership should issue clear guidelines to all personnel to verify claims evidence before submitting. This will add double authentication to the entire process.

10. Scaling Warranty Operations Across Countries and Product Lines

When expanding business operations, OEMs also need to think of scaling their warranty operations. However, because of several reasons, such as cost variations and consumer preferences in different regions, it becomes difficult to offer the same warranty guidelines across borders. While OEMs can create separate guidelines for different regions, implementing them on the same warranty management system and product line still remains a challenge. In the end, OEMs are left with no option but to invest in multiple warranty management solutions.

Solution

Because of varying consumer preferences, OEMs will eventually need to refine their warranty terms for different regions. Instead, they can look forward to deploying a highly scalable warranty management solution that can help them process warranties in multiple languages and across different product lines. 

How Intelli Warranty Solves Warranty Management Challenges

Intelli Warranty is an AI-powered warranty management software developed to help OEMs streamline warranty claims processing and reduce overall costs. Developed after thousands of hours of R&D, Intelli Warranty covers each minute use case that OEMs encounter when processing warranty claims. From claim submission and adjudication to approval and supplier recovery, with Intelli Warranty, OEMs can manage all their warranty operations from one centralized solution.

Business benefits of using Intelli Warranty:

• Automate warranty claims processing and eliminate manual errors
• Reduce claim processing delays and build customer trust
• Increase the supplier recovery rate
• Reduce warranty cost
• Detect and eliminate warranty fraud with AI-powered fraud detection checks
• Maintain accountability with end-to-end audit trailing on the platform
• Easily issue and manage RMA requests
• Streamline warranty claims with task queue management, campaign management, and user management
• Maintain transparency between the OEM, dealer, and supplier.

Final Thoughts

To be a leading aftermarket service provider, OEMs need stringent warranty management guidelines. With such guidelines, challenges are bound to occur. At some point, you may face operational slowdowns because of manual errors or even customer frustrations because of long warranty claims processes.

Taking measures such as automating the entire warranty claims process, creating transparent feedback loops, or segregating high-cost and low-cost warranty items can help OEMs a lot in overcoming several warranty management challenges. OEMs can successfully decrease high warranty costs, boost supplier recovery, and even scale their warranty management operations.

We should also take into consideration that these measures still cannot replace industry expert consultation. To figure out a proper solution, OEMs should get in touch with aftermarket warranty experts, who can provide them with the right guidance and tech to resolve all challenges.

Book a free demo to streamline your warranty management operations with AI-powered Intelli Warranty.

Frequently Asked Questions (FAQs)

1. What are some key challenges that OEMs face in warranty management?

OEMs face several challenges in warranty management, including but not limited to high warranty claims costs, delays in claims processing, high customer frustration rates, lower supplier recovery rates, inefficient RMA processes, and no product improvement.

2. How do I lower warranty management costs?

OEMs can lower their warranty management costs by streamlining communication, forecasting spare part demand, preventing warranty fraud, and revising complex warranty terms. 

3. How to prevent warranty fraud?

The best way to prevent warranty fraud is by automating the entire warranty claims process. Integrate a fraud detection software that can monitor the entire process and keep tabs on multiple variables that can help you detect fraud. These can include the cost of claims, the number of claims on a spare, regional claims frequency, the name of the claim filer, date of purchase, proximity to warranty end date, inventory correlation, invoiced labor costs, etc.

4. Which is the best warranty management software for automation?

The most comprehensive warranty management software available in the industry is Intelli Catalog. It helps OEMs automate warranty claims, reduce warranty fraud, recover supply costs, manage RMA, work queue, and do much more. It can also be integrated with your existing ERPs and help speed up the process.

5. How to reduce delays in warranty claims processing?

You need a warranty management software that can help you manage work queues on the system and automate the entire process.  With such a system, you can eliminate manual coordination, reduce scope for errors, provide faster RMA approval, and also identify the reasons behind the delay to speed up operations.