Not so fast — don't risk invalidating your car warranty come July 1

Advice on 'strings attached' to using independent motor workshops

03 June 2021 - 16:36 By wendy knowler
This is not a ‘one-size-fits-all’ situation and will not happen all at once, says the chair of the National Automobile Dealers' Association, Mark Dommisse. Stock photo.
This is not a ‘one-size-fits-all’ situation and will not happen all at once, says the chair of the National Automobile Dealers' Association, Mark Dommisse. Stock photo.
Image: 123RF/Olga Yastremska

Despite what you may have heard, come July 1 you won’t be able to take your in-warranty car to an independent motor workshop for a service or repair without risking invalidating your warranty.

That’s when the Competition Commission’s final Guidelines for Competition in the South African Automotive Aftermarket officially come into effect, but the National Automobile Dealers' Association (Nada) was at pains to stress at a media conference on Thursday that there are strings attached to this new era, and motor manufacturers will need up to a year to phase in the changes.

“This is not a ‘one-size-fits-all’ situation and will not happen all at once,” said national Nada chairperson Mark Dommisse.

“The guidelines are not law, but rather a series of non-binding applications for use by the Competition Commission in interpreting certain sections of the Competition Act as they relate to the automotive aftermarket.

“Consumers will need to communicate with relevant dealers to understand what is and what is not possible with regard to respective manufacturers’ processes and procedures, and terms and conditions.”

He revealed that only 20% of cars on SA roads are under warranty.

The guidelines are intended to steer industry players towards dropping the barriers to entry for the small, independent, mostly previously disadvantaged service providers, and were published in December after three years of negotiations with stakeholders across the spectrum.

Right to Repair South Africa (R2R), a section 21 company which has been driving the transformation of the industry, has argued that consumers should have the choice of buying a service or maintenance plan with their new vehicles or choosing an independent repairer, “because it’s more convenient, offers a better service experience, better location, or is more affordable”.

Built-in service plans and extended warranties unfairly lock in consumers and are anti-competitive, R2R says.

The guidelines compel manufacturers to be transparent about the price of any pre-included service plan, maintenance plan, extended warranty or scratch and dent product, to enable consumers to make informed choices about the required future maintenance of their vehicles.

Up to now, those extras have been built into the purchase price, and have attracted interest in financed deals.

But here’s what Nada wants consumers to know:

Unlike service plans, the warranties offered by manufacturers on new vehicles are excluded from “unbundling”.

If you take your car to be repaired, under warranty, by a workshop other than one of the manufacturer’s franchised dealerships, you will have to pay for it yourself. You will not be reimbursed by the manufacturer.

Having your car serviced, while under warranty, by an independent service provider (ISP) carries risks which the ISP is obliged to warn consumers about.

“Any damages to a vehicle as a result of work performed or non-original spare parts fitted by ISPs will be assessed by the respective manufacturers and either parts of, or the entire warranty can be voided.”

• Manufacturers are only obliged to approve an application if that ISP meets the full terms, conditions and criteria set out by the OEM.  

“This is vital for consumers to understand and is incorporated into the guidelines to protect the customer and the integrity of their vehicle,” Dommisse said.

“The manufacturers make major investments in intensive training programmes to equip their franchised dealer technicians with the requisite skills and knowledge to deal with intricate procedures and the introduction of new technologies. These programmes are critical to ensuring vehicle safety and in turn the safety of technicians and ultimately motorists.”

• When working on the vehicle of a consumer, independent service providers must disclose whether they have adequate insurance to cover all liability or potential damage to the vehicle and carry full liability and risk for the work that they do.

The same applies to franchised dealerships, but many refuse to take responsibility for damage or loss of customers’ cars, expecting them to claim on their own insurance policies.

Cars that have been serviced by a franchised dealer network fetch higher resale prices than those serviced by independents.

Interestingly, a survey conducted about three years ago by the Automobile Association of SA revealed that car owners are equally satisfied servicing their vehicles with private mechanics they trust as with original dealer franchises.

But most owners (57%) still prefer using original parts for their cars, though the vast majority (77%) believe they are expensive, the AA noted.

Only 16% of respondents believed original spare parts are fairly priced, with most of the comments received indicating these parts are “greatly overpriced”.

But many respondents said they prefer to pay those prices over cheaper non-original parts.

What the guidelines will give rise to, Nada said, is manufacturers and their dealer networks making previously protected technical information and training available outside of in-house programmes, thus developing people and transferring skills to the independents.

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