Jul 032006
 

OFTServicing and repairing cars generates £14bn every year, yet the OFT (Office of Fair Trading) continues to overlook the warranty restrictions being applied to the dealer dominated used car market.

That’s the view of leading independent mechanical insurance provider, Warranty Direct, in response to the OFTs ‘pat on the back’ following its succesful intervention in the service restrictions applied to new car warranties.

“The original focus, whilst with good intentions, was wrong. New cars only account for around a tenth of all the vehicles on the road, but what about the 5m or so used cars bought from dealers every year with an extended warranty attached?”, says Duncan McClure Fisher, managing director of Warranty Direct.

Dealers, both franchised and independent, control over 90 percent of sales of the used vehicles aged 0-2 years, 80 percent of those aged 3-5 and somewhere close to 60 percent of 6-8 year old cars.

McClure Fisher believes the real issue facing the OFT is within the used car segment.

“People still prefer to buy a used car from a franchised dealer, which, in the majority of cases, is sold with a new 12 month warranty wrapped into the price.

“Some ‘approved schemes’ come complete with restrictions on where and when a car must be serviced in order to keep the policy valid. Surely that’s what the OFT has just congratulated itself on removing for new car buyers?”

McClure Fisher adds: “They [OFT] need to make sure the restrictions lifted on new cars, is repeated for the used segment, especially those in the franchised dealer controlled 3-5 year old market.”

Warranty Direct operates an unrestrictive policy on its claims. Motorists can choose to take their car to either a franchised or independent garage to carry out the repair work.

Mar 302004
 

OFTUsed car buyers are being urged to consider the OFT’s advice on checking the terms and conditions of new car warranties.

Independent automotive warranty provider, Warranty Direct, believes the OFT’s current campaign needs to be extended to the 5m people who buy a used car from a dealer every year.

OFT research suggests that over two thirds of motorists assume their warranty will be invalidated if they use a garage outside of the manufacturer’s approved network.

“Franchised dealers are fully aware that the average consumer has a limited understanding of his or her rights when it comes to servicing a warranty,” explained Duncan McClure Fisher of Warranty Direct. “As a result, they play on the car owners fears. The argument that independent garages will provide substandard work simply doesn’t wash.”

“The fact is many employ ex-franchise trained technicians or are part of well established nationwide chains, like Unipart Car Care, which adhere to stringent quality controls.”

He added: “In this instance, the OFT has got it right. Publicising the rights of the public to consider independent garages and instil some long overdue competition into the marketplace. The real problem, however, is that the restrictions and pressure is at its worst in the used car segment.”

Dealers, both franchised and independent, control over 90 percent of sales of used vehicles aged 0-2 years, 80 percent of those aged 3-5 and somewhere close to 60 percent of 6-8 year old cars.*1

“People still prefer to buy a used car from a franchised dealer, which, in the majority of cases, is sold with a warranty wrapped into the price. Here, owners need to check that the policy does not come with any restrictions – something very few do, to their cost later on.”