A warranty adjustment program, also known as a secret warranty program, is a service provided by car manufacturers to address defects in their vehicles without initiating a formal recall. These programs allow for repairs, replacements, or modifications to defective products, often extending beyond the standard warranty terms. Manufacturers use warranty adjustment programs to manage costs and avoid the larger expenses and negative publicity associated with recalls. These programs are typically kept confidential, with information shared only with dealers or sometimes just regional offices.
Manufacturers usually send letters to dealers authorizing them to cover repairs under the program; however, vehicle owners often must bring their cars to a dealership and navigate lengthy complaint processes to get repairs paid for. No federal laws regulate secret warranties in the United States; but some states, including California, Connecticut, Maryland, Virginia, and Wisconsin, require dealerships to notify car owners of secret warranties. In these states, dealerships must inform registered vehicle owners of the defects and available repairs similarly to recall notices.
[Last updated in July of 2024 by the Wex Definitions Team]