A WORD OF CAUTION
UNLESS YOU HAVE a full vehicle maintenance or service plan – the cost of which is in any case built into the cost of the vehicle – having only a warranty can be an expensive benefit. Michelle Elkington, of Motolube’s MoTo-Maintenance Plan, says the warranty compels the motorist to have the car serviced at the dealership network. What’s covered in the service by the warranty may be negligible compared to the R3 000 average cost of the service itself.
The warranty comes standard with all new motor vehicles, but a maintenance or service plan is typically an add-on – and paid for. She says if any car buyer looks at the final cost being financed it’s quite different from the price listed in the showroom – the difference is all the add-ons, such as the maintenance plan.
Some warranties also have some oddities, she claims: when she took her own car for a service she found the warranty covered only the right wheel bearings and not the left. And some warranties only cover about one-third of the damage to a radiator.
“It appears to be free, so people don’t take much note of the fine print. However, in reality the R20 000 or so that a plan costs is added on to the cost of the vehicle and blended into the monthly cost, which is all most people look at,” she says. When you buy additional benefits, such as a maintenance plan or insurance, the bank gives a preferential rate, blurring the cost even further.
“Most people don’t even know what cover they have and what they can claim for,” says Elkington. She says the industry is so incestuous between motor manufacturers, motor plan administrators, dealerships and banks that it’s virtually impossible for new players such as Motolube to enter the market. Ultimately, the consumer loses out because the sector is looking out for each other’s interests rather than the motorist’s. “We’ve been trying to penetrate this market for the past year and have found it highly rigid, with kickbacks from maintenance plan administrators to dealers blocking out new entrants.”
Players such as Motolube cover all vehicles and permit them to go to any RMIaffiliated workshop.