The Competition Commission has long frowned on the monopolistic motor service and parts industry. But with their new set of proposals that’s all set to change.
Motorists are set to save money when proposals drafted by the Competition Commission (CC) are ironed out and become binding. The CC has long been concerned about anti-competitive conduct in the car repair and parts industry which, due to to tight controls, has excluded historically disadvantaged individuals.
The proposals are set to shake up the market and will allow motorists to get their car repaired and serviced by any repair company or individual, even if the car is still under the manufacturer’s warranty.
But how will this all work out in practice? What does it mean for those looking to buy cars in the future and how will it affect insurance policies?
What are the current rules?
Manufacturers like Chevrolet, Mercedes-Benz and BMW call the shots. When it comes to repairing new cars, all equipment and accessories have to be approved by them. If you don’t get your car repaired by one of their approved dealers or service agents, then you’ll be going against the rules of the warranty, thereby voiding it. It means that no future repairs will be conducted under the warranty and you’ll have to foot the bill yourself.
“In short, the proposed code will give car owners the right to repair or service their vehicles at a provider of their own choice, without voiding their warranties,” explains Wynand van Vuuren, spokesperson for King Price insurance. “At present, car owners have to use a vehicle manufacturer’s service centres and parts departments for their embedded service plans, and generally have to use pre-approved panel beaters for repairs to their vehicles.”
More choice and cheaper prices
For the consumer it will mean more choice and cheaper prices when it comes to repairs, parts and even insurance premiums. “I believe it will have a positive effect – cheaper prices and better service. There will be more repairers competing for price and the insurer can pass the savings on to the customer. Work will be done more quickly too as there’ll be more choice,” said van Vuuren.
Van Vuuren adds that these changes should also have a positive effect on the economy. “There will be thousands of jobs created and a big difference to the economy.”
Will it mean a drop in standards?
With the market opening up you’d be forgiven for thinking that it could mean that any ‘Joe Soap’ mechanic or panel beater would be able to repair and service your vehicle. But if your car is insured your insurance provider would still come up with their own set of recommendations.
“Of course, quality standards will still need to be maintained, so the client isn’t left with the short end of the stick after repairs are completed. While insurers will no longer be able to compel clients to use specific providers, they will still be able to recommend repairers who have been audited and adhere to certain standards,” said Van Vuuren.
There are also proposals for equal-matching parts approved by the South African Bureau of Standards. These would need to be used so it won’t mean that the service repair specialists can use just any spare or grey parts that they wish. Under the proposals, the SABS-approved parts will not result in invalidating the warranty.
What happens next?
Don’t tear up your motor warranty contract just yet, as these are still at the proposal stage. There is a long way still to go because the motor industry, which is resistant to these changes, will still need to have a say.
This article first appeared in City Press.