Subaru CVT Transmission Failure Update: Full Owner Refund

A pensioner whose Outback CVT failed, got a rather large bill from the dealer to replace it. Then something good happened...

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Remember Will Toms, on the pension, whose warranty had expired on his 2016 Subaru Outback when the CVT transmission failed on the highway?

He limped into the Subaru dealer in Coffs Harbour, which quoted him $11,000 to replace the transmission. What happened next will astound you.

If you missed that report watch it here >>

I'm happy to report that he got a full refund. However, I can't find any evidence whatsoever that the CVT was actually defective.

Geoff King Motors, the Subaru dealer in Coffs Harbour, charged him $1500 to send the transmission 1400 kilometers south to Melbourne for diagnosis, which to me seems quite inefficient. But then, brace for impact:

There’s a reason a defibrillator should always be easily located in the service department, for moments like these.

Here's where this gets interesting. About 58,000 people watched my earlier report on Mr Toms’ predicament, and 35,000 of them watched all the way to the very end. It's fair to say that a lot of people are interested in this case and how it played out.

Subaru reached out and thanked me for “bringing this customer issue to our attention”. I can just imagine the outpouring of gratitude in the boardroom.

To be fair, Subaru has invariably been pretty damn good at head office whenever I have approached them with anything of this nature, and even if the volley has been a line-ball, they generally call it in favour of the customer.

Mercedes-Benz Australia, in my view, could learn a lot from Subaru on matters such as this.

If you don’t know what a CVT transmission is, brush up here >>

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Don’t miss when trying to dethrone a king

Having produced my initial report and patiently awaiting the outcome, this happens:

Paul King there, from the Geoff King Subaru dealership, presumably a relative of the founder, to whom I replied, essentially, ‘Sure, I can do 24 hours, no problem.’

I also explained, which is important for regular consumers to understand in matters like this: there are no ‘versions of facts’. There are just facts, and anything else that is not fact. This is how the entire universe works. There’s no grey, no alternative. Just facts.

‘Versions of facts’ are also often known as lies, in my experience, although I make no such allegation in this case. I’m simply correcting the record. ‘Versions of facts’, in my view, are an insidious societal toxin.

That email from Mr King leads me to apprehend that there's been some kind of internal conflict, possibly a monumental one, between Subaru Australia and the dealership, the magnitude of which is sufficient, seemingly, for him to pre-emptively demand a right of reply should Subaru's version of events lead to the dealership getting into trouble.

This is a hypothesis, of course, on the balance of probability, using Occam’s Razor.

Then I got this from Subaru: (click to enlarge)

This was quite a long email largely devoted to subjects orbiting exceptional customer service and related excellence and things of that nature.

I'm gonna spare you the gritty detail there but then there was this:

Okay, great. I am all for customer satisfaction. But what does this amalgamation of corporate buzzwords actually mean and, more importantly, what actually happened?

So, I reached out to the owner Mr Toms.

He said this:

The next time you or someone you know, or even if you overhear a conversation where they’re saying all journalists are card carrying bastards, play the above video, send them a link to this report and tell them to subscribe.

I’m only a bastard when it serves your best interests - the consumer.

Simple explanation there, Mr Toms. It probably didn't drain completely, so it probably was not operating completely dry, but indeed this is substantially what they claim.

This is the official diagnostic report from A&B Automotive remanufacturing in Melbourne, supplied to me via Mr Toms after he sent me that last message. These people are the official Subaru transmission specialist contractors and they have been since sometime in the 1990s apparently.

Now, before sending any outrageous accusations about me having this report, no burden of confidentiality in respect of that attaches to me. I specifically suggested that Mr Toms should not divulge any of the details or release any information if he had agreed to a non-disclosure agreement in relation to this settlement.

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The report is entirely consistent with the following failure mechanism. You have to remember that the CVT and the front diff are bolted together, like a transaxle.

The crankshaft of the engine goes into the transmission, there's a CVT, and then there's a transfer case type of gearing arrangement that splits the drive front and rear. The back half goes to a prop shaft that travels the length of the vehicle before it engages a rear differential. The front half is physically bolted to the bottom of the CVT housing; it just looks like a big aluminium block when you get underneath and look.

A) If you really don't know what you're doing in the service department regarding this transmission, you probably shouldn't be doing it and;

B) It is hypothetically possible to drain the front diff and then crack open entirely the wrong fill point and erroneously dump all of that brand new diff oil into this CVT. Generally, that's bad.

Doing this, obviously the CVT becomes contaminated with the wrong oil and the diff becomes a ticking time bomb of low to no lubrication, waiting to go bang, out there on the highway.

This excerpt is from Grant Rattenbury from the A&B diff detective mob in Melbourne who's been there for 30 years - he's a qualified mechanic and is probably beyond proficient at diagnosing this kind of thing by now.

The engineer in me needs to point out to you that Fuji Heavy Industries could virtually negate the risk of this mis-filling failure mode simply by labelling the filling points with the words ‘trans’ and ‘diff’ respectively, next to those respective filling points. It would take this minor change to the casting dies to make a major improvement with in-service mistakes.

Essentially, what the report says is the diff eventually overheats because it's not lubricated, then the bearings fail, the pinion seal fails because of the non-support of the pinion shaft and the CVT fluid - now contaminated with gear oil - flows forwards into the diff, albeit somewhat late to do any real good. And there's heat damage in the diff which is consistent with this mode of failure.

I give Mr Rattenbury 13 points out of a possible 10 for his examination and diagnosis. This problem is actually somewhat prolific, I'm told. I'm detailing it here so that if you are an independent mechanic and some strange Subaru rolls in one day, you can be prepared for the issue of front Subaru differential refill points, because that's kind of important.

For clarification I’d suggest grabbing this Tech Talk report from the VACC, which covers this issue in granular detail:

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There’s nothing in the A&B teardown tech report about damage to the CVT. And I’m inferring the deafening silence on this front is because it is undamaged. If it’s your job to tear down and investigate a transaxle for damage, you’d mention any and all damage, surely.

I’m further inferring that, in this case, you could probably flush out the CVT, replace the pinion seal, refill with CVT fluid, bolt up a new diff, spool it all up for testing on a dyno, and then send it back to the customer.

So why charge the owner for a new transmission, when only the diff failed? I’d be motivated to pursue that if Mr Toms was nearly $11k out of pocket. But he’s not, so it’s really just a curiosity.

Let this also be a warning about not servicing your ‘Sealed for Life Transmissions’ because they definitely should be.

A few more points:

1) The dealership here is multi-franchised - Geoff King Motors flies the Subaru, Mitsubishi, Volkswagen, MG and even the defunct Holden brand flags. But guaranteed they do not have five separate service departments.

Subaru can fluff up its rhetoric about service excellence as hard as it wants - and I believe they are most sincere about it at head office in north-western Sydney.

But at the end of the day, the point of contact for you, and the last dude in line, holding the service culture baton, is also holding the baton of Volkswagen, MG and Holden, etc. The customer service you actually receive as a car owner is down to the operating culture within the dealership, and head office really cannot control that.

2) Let’s talk about bad incentives at dealerships, which is the root cause of why people think car dealers are arseholes.

If dealership can convince you it’s not a warranty or consumer law job, they make more profit - because there’s a margin on the parts which they do not earn in the case of warranty and consumer law repairs, and because they charge you a higher labour rate than the parent carmaker pays them for those kinds of warranty jobs.

Also, dealers only get paid when they deliver a new car, and with 6-12-month waiting periods common in the industry currently, there’s a lot of pressure to keep the revenue flowing in via the service department.

I’d be concerned about any major repair being overblown unethically, for example, by billing you for a full transmission replacement, when only the diff had failed. That’s a real risk right now.

Of course, Subaru could have a policy to replace whole transaxles as complete remanufactured units, even if only the diff fails, and in which case the dealer’s hands might be tied - it’s still a bullshit arrangement.

I’m not saying either case is what has definitely happened here, but these kinds of things are generally likely in the car industry. This fire is fuelled by the fact that Mr Toms told me the dealership would not offer him the A&B report when he first requested it:

Wil Toms there, in his 19 Feb e-mail to me. What possible imperative could motivate that refusal? Like, if the dealership faithfully reports the problem to you, and the report substantiates the need for these expensive repairs, you kinda have to cop it on the chin, do you not? If it’s all just a con, however, the report would undermine the claimed extent of the damage and necessary repairs.

Either way, transparency is the key to ethical operation. At least, that’s how it seems to me.

And 3) Dealers hate independent mechanics. So do carmakers. They are always at war. Carmakers and dealers are always actively trying to undermine independent repairers - despite the fact that dealerships simply lack the capacity to service every car on the road, and in many cases dealerships are poorly trained and ill-equipped to diagnose complex problems.

The aftermarket industry has been fighting this bullshit narrative for years and has been trying desperately to get the federal government to impose a scheme that allows independent workshops to access important servicing and technical information from dealerships and carmakers in order to provide safe and effective servicing of the millions of vehicles on the road.

if you present at a dealership with a problem, and the service history shows that an independent repairer has serviced your car, some dealerships will view you as a traitor, ie - you have undermined their profitability. And they do love money. So they ‘penalise’ you accordingly. So you need to be your own best advocate - stand up for yourself - because you’re allowed to use a qualified independent mechanic and quality, fit-for-purpose parts without being penalised by carmakers and their dealers.

Finally, if your problem happens a long way from home, the local dealer kinda has you corners because ‘you’re not from around here’, you have an urgent need for repairs, and they know they’re not ripping off a local, so word won’t get around. Except it does.

I’m not saying all of this has happened in this case, and I lack the resources to investigate further. I’m saying this might happen to you. These are the worst-case commercial dynamics if you step into an ethical vacuum.

You have to be an effective advocate for your own interest in these circumstances. You’re not there to make friends. If you think you are being taken advantage of, contact the carmaker directly - do not rely on assurances from the dealer that they are doing this on your behalf - because there’s a clear conflict of interest there.

Anyway, apart from the inconvenience, I’m glad things worked out well for Mr Toms, but, as I see it, there is a bit of an ‘underbelly’ kind of dimension to this one. Perhaps these changes that Subaru claims to have implemented will address this.

Let me know what you think in the comments below.

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