First, it’s good to know the industry standard warranty is 6 months and 240 hours plus a pro-rated period. Around 30% will have a warranty issue of some kind so understanding the fine-print is important.
Normally warranties are split up in two portions – 1. The initial portion where the engine is covered 100% or nearly 100%. 2. The prorated period where coverage declines to your engine’s TBO at actual flight hours used or a specified number of hours per month whichever is greater (40 hrs/mo is common). If your TBO is 2,000 hours and warranty declines at 40 hours per month, you’ll run out of benefit a little after 4 years right? Hah, is anything with overhaul that simple? Here’s the catch!
Simple math says if a warranty is prorated to a 2,000 hour TBO, it will pay half of an eligible repair at 1,000 hours right? Not necessarily. Most warranties say that you’re liable to pay your share at the ‘retail cost’ (which is like list-price, or MSRP) and they cover the rest. In this same example, let’s say you work with a shop that invoices you for $1,000 for a warranty repair. But, the retail cost of that repair is $2,000. In this case, you’ll be paying the entire bill because your warranty says you have to pay half the ‘retail’ repair cost before the shop or factory contributes. To summarize, pro-rata warranties with ‘retail cost’ in the wording may only useful for about half their life because it’s not uncommon for a shop to discount work by 50% of the ‘retail cost’.
Before I leave you with that dim picture of the prorated period, it’s important to point out again that most good shops will extend themselves beyond the writing in their warranty. If you ask nicely, you might be able to get a shop to cover half of the actual cost of the repair and not hold you to the ‘retail cost’ sharing program.
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