Service and Repair Plans:
Planning for the Cost of Motoring
With our reliance on our vehicles escalating, planning for future costs can’t be a bad thing. No-one likes being without their car for long, but the cost of repairs and maintenance can be expensive especially when unexpected. So, how can Service Plans help? What are they about? Do you know what you are paying into and who has control over the use of your funds?
Service Plans are great for planning for future costs. In the same way there is an option to pay for utility bills monthly, you can do the same with your car. It is great for budgeting and avoiding those unexpected costs providing it covers what you are expecting it to cover.
Main Dealers will all offer you a service plan when you purchase a car whether new or used. It means that servicing and MOT costs are fixed (excluding VAT and VOSA MOT increases), for the period you choose – usually 1-3 years, but some do go beyond this. The longer the period you commit to, the further your monthly payments go.
They are linked to the dealership (or dealership group) that you took it out from, so you are committing to use their knowledge, expertise and parts for that period of time for regular. Only items on the Manufacturers Service Schedule are included and no refunds are offered for funds not used. These cover Servicing and MOT only and do not include repair work which may come from standard wear and tear of your car. Often this is the most unexpected and expensive part of car maintenance as it can be labour intensive.
The majority of dealerships personalise the quote dependent on your car and your use of it. Remember to do your homework first before accepting their payment plan. It is all too easy to compare the additional cost of a Service Plan or Warranty to the cost of your car, which then seems good value for money to gain peace of mind. They are good for spreading the cost, but can be limiting also.
But having a dealership stamp in your service book retains the resale value, doesn’t it? According to The Office of Fair Trading the average car over a period of 3 years saves 70% on maintenance costs by using a reputable independent garage. This could equate to a saving of £2000, which far outweighs the saving on the resale value. Since Block Exemption was established in 2002, main dealers can no longer insist that cars return to them for servicing. It was seen as unjust that consumers were faced with excessively high servicing costs. Cars can be serviced anywhere providing OE (Original Equivalent) parts are used. Consumers now have a choice.
A regularly maintained car is more attractive on the used car market because these cars have been well looked after and therefore generally more reliable. If a vehicle hasn’t been well looked after, then the repair costs start escalating, so purchasers look for a Full Service History and therefore a regularly stamped book by a reputable garage is essential, but it doesn’t have to be a main dealer.
The majority of these service plans travel with the car not the customer, so don’t forget to close the account when you sell the car!
It is not just the Main Dealers that offer Service Plans, but they are not common place in the independent sector. The majority cover Services and MOT with fixed costs, but the parameters are the same as the main dealers. It only covers items on the manufacturer’s service schedule.
The Independent Garage Association has launched it’s own Car Repair Plan which offers the greatest flexibility. Unlike the others it also covers repairs. You put in an amount that you feel comfortable with to cover any costs you wish it to – no stipulations to worry about. You can adjust the payments and it doesn’t have to be over a fixed period of time. So, providing you use one of the growing number of trusted authorised garages which operate country wide, the plan can be used whether on holiday or by a child who is away at university! It is not fixed on one vehicle, but attached to the family so you can add additional cars and cards! No admin costs either! There is more information here: www.carrepairplan.co.uk
These plans are great for:
- Cars over 4 years old when running costs tend to increase
- Those whose children have just passed their test and want to put some funding aside for them to help with running costs,
- Parents with children at University who needs support with their running costs
- Those whose budget is tight, but where their car is essential.
- Those who just want to set aside a monthly amount to maintain their car
The garages all charge in different ways, so look for a garage with fixed price servicing and a trusted reputation.
The Independent Garage Associations Repair Plan gives amazing flexibility, but then why not look at having a savings plan at a bank? If you are disciplined with your money, then this could be the best way to go and you gain interest also. Although, how many of us actually have a savings account for the maintenance of a car?!
So what is the difference between a Service or Repair Plan and having a Warranty?
Warranty or rather Motor Breakdown Insurance, insures you against loss associated with a reason that your car is not working properly. They come with an excess payable and the majority do not insure against wear and tear and are invalidated if the manufacturer’s service schedule is not maintained. Typical exclusions include: tyres and wheels, exhausts, catalytic converters, brakes and clutch, damage to the bodywork, paint work, glass and headlights, audio equipment and satellite navigation systems.
Other things that may invalidate your insurance are: missing scheduled car services, using an unauthorised garage for any repairs, car modifications and claims arising from neglect of the vehicle or any repairs required as a result of using unapproved fuel, lubricants or parts.
Rather than committing to a Service Plan, Repair Plan, or Warranty why not look for the cheapest deal? There are many garages offering cheap servicing and MOT’s… so, you could save a fortune and use the cheapest possible, couldn’t you? Garages can keep costs down in a number of ways:
Cheap labour – often limited skills. It is important that staff receive regular training to maintain their knowledge. A reliable garage will offer a range of knowledgeable staff from Service to Master Technicians. This enables them to identify any problems early preventing more expensive repairs later on.
Cheap parts – These are usually non genuine or non OE (original equivalent) parts or inferior oils and lubricants. These wear quickly or not as effective and can impair warranties.
Cutting corners – not replacing the parts or oils that they said they would. Use a garage that has achieved a recognised accreditation and a trusted reputation.
Cheap MOT/Servicing – Advertising is great for getting people through the door, so be weary of these offers as they usually come with a hefty repair bill. After all, businesses need to make a profit!
The quality of garages vary enormously, so do your homework and ask all the questions you need to, to ensure you are getting the kind of repair you are expecting.
Over to you…
Servicing and maintenance of a car isn’t optional, it is part of owning a car and the owner’s responsibility to ensure it is fit to be on the road. It will be the first thing the insurers and Police look at in any road traffic accident.
Therefore, planning for future costs is vital to ensure that you are kept safely on the road. Your method of doing this is personal to you.
Don’t commit until you have done your research and remember to compare like for like! Some reception staff are targeted on the ‘up sell’ (it can make the difference between a deal making a profit or not), so it is in their interest to sell it to you.
Take a good look at all your options and make an informed decision based on your actual needs, not what you are being told is good for you!
Remember the choice is yours. It’s a careful balance of your needs, safety, and choosing financial options that cover what you want them to. The important thing is to ensure that your service or potential repairs aren’t cost prohibitive and that you, and others, remain safe on the road.