Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
806947 | Reliability Engineering & System Safety | 2013 | 9 Pages |
Automobile warranty coverage is typically limited by age as well as mileage. However, the age is known for all sold vehicles at all times, but mileage is only observed for a vehicle with a claim and only at the time of the claim. We study the relationship between the expected number/cost of warranty claims and the driving patterns. Within a nonparametric framework, we account for the rate of mileage accumulation and propose a measure for the variability of this rate over a vehicle's observable life. We illustrate the ideas with real warranty data and comment on the relationship between the expected number/cost of warranty claims and the driving patterns using results adjusted/unadjusted for withdrawals from the warranty coverage due to mileage accumulation.