In this report: John Cadogan explains how to slash your new-car servicing costs – without putting a dent in your new-car warranty
You can save hundreds of dollars – and in some cases thousands – if you organize your servicing outside the authorized dealer network. And your warranty absolutely will survive if you play by three simple rules.
Here’s everything you need to know to save big bucks and keep your warranty on track.
Frankly, most carmakers would be okay with it if you were to presume you’d void your warranty if you get your car serviced by an independent mechanic. But unfortunately (for the car industry) it would be absolutely illegal for them to impose this anti-competitive condition on you.
THE 'INDUSTRY' PITCH
Car dealers make a great deal of money out of parts and servicing – it’s a river of gold flowing into every dealership. But your ongoing contribution to dealership cashflow is more negotiable than you might think. Your warranty cannot be used as leverage to compel you to get the car serviced at the dealership.
Car manufacturers produce a great deal of corporate spin that comes pretty close to implying your warranty is lost if you cheat on them with an unauthorized service. But the Federal Government is very clear on what you actually need to do to preserve your warranty. According to the Government's ACCC, as long as you comply with three very sensible conditions, your warranty absolutely will survive your departure from the car company’s authorized servicing network. And your wallet will almost certainly benefit, because there certainly are cheaper options.
We’ll get to those critical, warranty-preserving conditions directly. First, though, it’s a great idea to understand dealerships. They charge a premium partly because they can, and partly because they need to. They talk up what they do, and emphasise just how specialized and highly trained they are. In this environment, plenty of new car owners are simply hoodwinked by implication into believing there’s no alternative.
It’s not a recipe for being an informed consumer.
DEALERSHIP ECONOMICS FOR DUMMIES
Car dealers are substantially under the hammer since the Global Financial Crisis, and frankly there’s less money in selling new cars today than ever before. So, many dealers have compensated by amping up what they call their ancillary business: parts, service, accessories plus finance and insurance. On the plus side, they also invest heavily in training, and specialized diagnostic tools – which ultimately you as the consumer pay for. This is an area where some independent service providers struggle to compete.
Obviously, dealers operate from the most expensive real estate on the automotive landscape, too, with huge overheads. Part of charging you more on the service front is needing to pay the capital and operating costs for those comparatively grandiose premises.
Chrome, glass, marble, bunting, corporate identity, branding, and prime real estate ... not to mention all those cars out there on the lot – the floor stock. The dealer is paying for all of it, with interest. These businesses burn cash faster than Usain Bolt. And you – the customer – ultimately pick up this tab.
Alternatively, you can shop around for parts and service.
DEALERSHIPS Vs INDEPENDENT MECHANICS
Car makers often attempt to sex up the technical complexity of the job, but the reality is 90 per cent of servicing your car is still just changing the oil and checking fairly standard mechanical stuff. It’s important to get it right, but it’s hardly rocket science. No matter how sophisticated your new car might be, servicing it is not exactly re-aligning the Large Hadron Collider or polishing up the lenses on the Hubble telescope. It’s regulation mechanical trade techniques, and interpreting computer fault codes.
So, on fundamental economic terms, an independent mechanic can generally offer you a significantly sharper price. He’s got cheaper real estate, lower overheads, and a much more compact cost-base. But he might not have the specialized diagnostic tools for every fault, and he’s unlikely to be in a position to implement running fixes (also called ‘service campaigns’) often done under the radar during authorized services.
However, unlike the 'authorized' dealership, servicing cars is the independent mechanic’s primary enterprise, so he’s either very good at it, or he goes out of business so fast, you won’t even see him disappear. There will just be a rush of air as the atmosphere attempts to compensate for his rapid departure. At an independent mechanic’s premises, you’re much more likely to go face-to-face with the bloke who’s actually had his hands on your car. He might say, come back in 5000 kays, because your brakes are on their last legs – this can save you money because the dealership will just change them out now, 500 kays early. At the very least, you will get some breathing space in which to budget for the upcoming repair.
PRESERVING YOUR WARRANTY
If you want to go outside the authorized servicing net, and still preserve your new car warranty, the ACCC says you need to meet these three fundamental conditions:
First, the person doing the job needs to be what the ACCC calls ‘qualified staff’ – in other words, a party or parties other than an authorized dealer who is capable of performing car servicing. And that means the person who works on your car needs to be a qualified mechanic, and not some half-baked back-yarder. If you’re not a mechanic, doing it yourself will almost certainly void your warranty.
Second, the servicing needs to be done to what the ACCC calls ‘manufacturer’s specifications’. Two key points there – you need to get the service done when it’s due. Either the time or the distance – whichever comes first. And all the jobs specified by the manufacturer for that particular service need to get done.
And third, the ACCC says both genuine and appropriate quality non-genuine parts are acceptable. So, genuine parts aren’t a warranty-preserving prerequisite. The issue here isn’t who manufactures the parts, but whether they’re fit for purpose. So, you don’t even need to use genuine parts – as long as the parts you do use are designed to do the job, and meet or exceed appropriate standards. Good independent mechanics are generally plugged into a solid supply chain of quality alternative aftermarket parts. And that means, you save even more.
Don’t get me wrong – it’s not a mistake to get your car serviced by the dealer – especially if he’s a good dealer with a rock-solid commitment to service quality, and reasonably priced. But even then, you will almost certainly be able to save money outside the authorized dealer network. Always shop around for servicing. Ask how much to perform the next standard service due on your car, and then compare quotes. Servicing prices vary widely – even within the dealership network, because dealerships are generally independent businesses that own a franchise to sell the brand, and because manufacturers aren’t allowed to fix prices under Australian law.
Word of mouth is a great way to choose a good service provider. One happy customer talking up his mechanic is worth a thousand leaps of faith into an unknown sea of potential incompetents and rip-off merchants. But remember, there’s no obligation on you to underwrite the dealer’s overheads by paying for premium-priced servicing, and your warranty is absolutely not jeopardized by going outside the net. Provided you meet the critical three conditions set by the ACCC. At least now you can make an informed decision.