Sunday, February 13, 2011

Boat warranties, big brother is really watching you.

The letter excerpt below was sent to the owner of a new boat. The owner was being advised by the manufacturer there would be no warranty coverage on the boat because they had determined, via the internet, that the boat was being used for commercial purposes.

I have spent a lot of time reading boat and motor warranties the past couple of days, (an excruciatingly dull, but informative task), and almost every one has a specific warranty exclusion for "commercial use", and several additionally spelled out the fact that this included the use of the boat in anyway that created revenue. What was interesting about the letter, was apparently this manufacturer was searching websites for their boats being used as fishing charter boats, and the ilk. They were then cross referencing the names found on the websites to their owners list, and if there was a match, the owner was sent a letter advising them their warranty was voided.

What was unusual in this case, was the fact that the picture on the website was not the boat in question, but a several years older version of the boat, that had recently been sold, and a new one, of the same make, and model had been recently purchased. In this case it would be like trying to tell what year Volkswagen it was from a picture. The owner occasionally did day fishing charters. This was more of a hobby, and a retirement project, rather than a money making operation. The owner unfortunately passed away shortly after the purchase of the new boat, and it is not known if the new boat was used at all, much less commercially, or otherwise. But since he had used the old boat commercially, the manufacturer has said that the new one was surmised to have been used commercially, so the warranty is kaput, and they won't discuss it any further.

I did a little test to see if this was an effective way to identify commercially used vessels, and it is. I Googled charter boat images, and found lots of newer boats being used for chartering, and most of them did not have logos blazoned across their hulls, that would clearly indicate that they were being used commercially.

So big brother, in a creepy, and not necessarily always in an accurate sort of way, is truly looking over your digital shoulder. This type of digital surveillance, and warranty voiding increases the builders net profits, in an environment where there are not a lot of profits. Now just to be clear, when you buy a new boat, most certainly your warranty will have a "commercial use" exclusion, but I wonder if it really makes sense for many builders to have that clause, in such a severe, and black and white way.

My take on this is you should want to encourage charter operators, fishing teams, and other related businesses to use your products, and by telling them they won't have any warranty when they buy their new, and often expensive boats, seems to me to be a real disincentive. The message being sent, is that the product won't hold up under real use, like using it often for fishing. I think this approach also hurts dealers who sell the boats, and do the warranty repairs. Since there is no warranty, most will seek the least costly approach to repairs, and that is not likely to be the dealer. This also encourages the use of after market parts, instead of the official, and often pricey original manufacturer's parts.

So who does this impact, charter boat operators, who are struggling in this economy, nature cruise, boat rental, and local sightseeing companies, fishing teams, and anyone whose boat is sponsored by anybody, for anything. There are a couple of bright spots I came across in all of this digging. Trophy boats allow up to 50% commercial usage, and Yamaha, and Honda both provide a 1 year warranty for commercial usage. Mercury's warranty stuff is so scattered, and complex that I couldn't really tell if they offer any commercial use warranty at all. I think they do, I just couldn't find it, and I eventually gave up. I understand the racing exclusion, and some of the others, but maybe manufacturers should rethink what they're doing, and cut some slack on the "commercial use" warranty exclusions, unless your product is made for only occasional light duty use by your grandmother on Sundays.