Guarantees and Product Warranty (Tables)

6 Months Ended

Jun. 30, 2021

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)	June 30, 2021		December 31, 2020
Caterpillar dealer performance guarantees	$	955	$	993
Supplier consortium performance guarantee	261		258
Other guarantees	226		234
Total guarantees	$	1,442	$	1,485

Product warranty

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

	First Six Months
(Millions of dollars)	2021		2020
Warranty liability, beginning of period	$	1,612	$	1,541
Reduction in liability (payments)	(442)		(436)
Increase in liability (new warranties)	515		428
Warranty liability, end of period	$	1,685	$	1,533