Guarantees and Product Warranty (Tables)

9 Months Ended

Sep. 30, 2020

Commitments and Contingencies Disclosure [Abstract]

Guarantees

The maximum potential amount of future payments (undiscounted and without reduction for any amounts that may possibly be recovered under recourse or collateralized provisions) we could be required to make under the guarantees was as follows:

(Millions of dollars)	September 30, 2020		December 31, 2019
Caterpillar dealer performance guarantees	$	1,139	$	1,150
Supplier consortium performance guarantee	257		238
Other guarantees	179		221
Total guarantees	$	1,575	$	1,609

Product warranty

We develop specific rates for each product shipment month and update them monthly based on actual warranty claim experience.  

(Millions of dollars)	2020
Warranty liability, January 1	$	1,541
Reduction in liability (payments)	(652)
Increase in liability (new warranties)	678
Warranty liability, September 30	$	1,567

(Millions of dollars)	2019
Warranty liability, January 1	$	1,391
Reduction in liability (payments)	(903)
Increase in liability (new warranties)	1,053
Warranty liability, December 31	$	1,541