The Pain of Tire Warranties for Manufacturers and Service Centers

Frédéric Baroin

Global Head of Automotive Business at Anyline

Dec 13, 2023

Tire returns are easily a significant problem for manufacturers. Some of the top tire manufacturers or OEMs manage several 100,000s of returns each year in worldwide. That’s expensive and time-consuming.

Warranties

Tire OEMs typically provide a number of warranties on tires. Some have up to six years or 80,000 miles on them. When the wear of the tires does not show any damage caused by missing recommended tire maintenance like rotation or vehicle mechanical problems, such as wheel alignment, the customer can then receive a substantial discount when purchasing their new set of tires. This is often proportional based on the performance or tread that the tire does not deliver within the warranty duration.

That means the end customer may be able to seek out a warranty claim from the dealer or the tire service center, and that organization must then fill out the paperwork or a digital OEM claim, return that tire to the OEM for inspection, and then, finally, produce the discount replacement tires to the end customer. In addition to these frustrating steps, shipment costs are paid for by the tire OEM.

This is a long and taxing process for all involved. However, the most common factor used to determine if a claim is valid or to reject it is to look at the tread wear on the tire – is it even or uneven?

Calculating the Tire Replacement Discount

Once a set of tires doesn’t perform to the warranty requirements, the service center has to calculate the replacement cost. This is done using this formula:

Retail price of the tire x the percentage of mileage received = replacement cost

If a tire warranty for a tire is 80,000 miles, the dealer’s retail price is $80, and a customer’s tire wore out at only 50,000 miles of usage, then:

$80 x 63% = $50.40

Current Challenge

The tire warranty generates a huge amount of manual work and added costs as a result. That includes costs related to logistics, checking, and brand damage. It does not generate any new business, either. Rather, it creates a strain on OEMs and dealers’ relationships when warranty claims become more common, abused, or rejected.

Anyline's software solution, which accurately and reliably measures tire tread depth, is expected to revolutionize the automotive industry

A Solution

An AI-enabled mobile data capture tool can provide a better end result. It can handle the entire process within a far shorter period of time. This means it can speed up the claims management of returned tires. To do this, it standardizes the digital inspection method. This creates the digital proof that dealers and OEMs need to have so that they can verify the accuracy of claims and that less abuse of the system occurs. It allows for better sharing of information about why the claim was rejected or accepted.

In addition to this, AI technology like this eliminates the cost of shipping those tires back and forth. That means OEMs can have claims reviewed and rejected at an earlier stage in the process.

Anyline offers a solution to this.

Anyline has a wide variety of mobile data capture solutions for tires and vehicles. They work by digitally scanning tire DOT, size, brand, tread depth, vehicle VIN, license plates, and more. Paired with Anyline Tire & Vehicle Analytics, all tire and vehicle data gathered is automatically organized into heatmaps, tables, graphs, bar charts, and pie charts and displayed on a dashboard in real-time.

Scan data is enriched and correlated with data from external sources to detect patterns and validate compliance and warranty requirements. This allows users to easily track tires and vehicles and make decisions regarding maintenance, logistics, and warranty replacements.

Here’s how it works.

Returned tires are digitally identified using DOT, and the tread checked with Anyline Tire Treads Scanner by tire technicians in the inspection center.
Barcode reading is also used to match the claim form versus the brand and serial numbers on the tire.
All information is stored in the claim management system. This information can also be integrated into a Dealer Warranty App or web portal to simplify the process and reduce the number of returns.
A digital tread inspection by the dealer will allow the tire OEM to reject the claim prior to the tire shipment to the control center.