Warranty adjustment program (also called a secret warranty program) is a service provided by car manufacturers when their vehicles have some form of defect. Manufacturers create warranty adjustment programs to try to avoid recalling a vehicle model which often involves larger costs and bad press. With warranty adjustments, manufacturers get to keep the process much more secret and control the coverage. Usually, manufacturers send out a letter to dealers which allows them to cover the repairs, but sometimes, only regional offices know of the program. The key aspect is manufacturers try hard to keep warranty adjustment programs from being publicized, leading to much criticism of the practice. A person must have their vehicle sent to a dealership and sometimes must go through long complaints processes in order to get the repairs paid for. No federal law exists in limiting secret warranties, but California, Connecticut, Maryland, Virginia, and Wisconsin make secret warranties illegal. In these states, manufacturers must inform registered owners of the vehicles similarly to recalls.
[Last updated in November of 2021 by the Wex Definitions Team]