Warranty burn rate – Something to look for in a reliable car

The warranty burn rate (WBR) of a vehicle is the average cost of warranty claims per unit submitted to the factory where the particular model is imported from.

Hyundai sees the WBR of its vehicles as a strong indicator of reliability and we spoke to the South Korean manufacturer to find out why a car with a low WBR can be considered more reliable than its peers.

How it works

A WBR is calculated by taking the total dollar amount that a domestic vehicle subsidiary, such as Hyundai Automotive South Africa, claims from its parent company, Hyundai Motor Company, for repairs or replacement parts on cars under warranty, divided by the number of cars under warranty.

Therefore, the lower the WBR, the lower the number and cost of claims are for a vehicle under warranty, which points to a higher level of reliability for that particular model.

It can also be calculated for one range of vehicles, such as the Venue, or the entire country’s fleet.

“The better the quality and reliability of a brand’s products, the lower the warranty costs are,” said Deon Sonnekus, general manager of corporate communications at Hyundai South Africa.

“It is a very good indication of the reliability and quality of a brand.”

However, as each vehicle is built and priced uniquely and each manufacturer functions in its own way, there is no single WBR benchmark that a car would have to beat to be considered “reliable”.

As such, comparing the WBR of a certain brand’s vehicles might help you find the most reliable vehicle made by that company, but comparing the WBR between competitors from several manufacturers will not be the end-all and be-all of gauging reliability.

Unfortunately, it is also not published by every company and you would likely have to ask your salesman for the info.

Hyundai South Africa WBR

According to Sonnekus, Hyundai has given its global subsidiaries an average WBR target of $31 (R515) per vehicle per year.

“Hyundai Automotive South Africa’s current achievement is a warranty burn rate of US$24 (R400) per vehicle per year across all model ranges and for all factories that we source cars from,” he said.

“That is well below target and considered to be an excellent achievement .”