What does your motor plan really mean?
Many motorists are ignorant of the details of the service and maintenance plans that come with their new or second-hand cars, according to new research. And in some cases their casual dismissal of the fine print could cost them a bomb.
A recent survey by MotorHappy found that nearly 90 percent of respondents were not properly informed about service plans, maintenance plans and warranties, and 62 percent had only a vague idea when their plans started and ended.
MotorHappy, an Imperial Group subsidiary, deconstructs motor warranties, and service and maintenance plans and provides advice via a call centre, website and other platforms.
MotorHappy surveyed over 900 motorists from across the country and received “unbelievable” feedback from men and women ranging in age from 20 to 60-plus.
Managing director Kerry Cassel commented: “This lack of knowledge is not limited to a single demographic, but is widespread across all age groups, provinces and genders.”
About 85 percent of respondents rated their understanding of their motor plans at two out of 10, where one was defined as “no understanding” and 10 as a “highly detailed understanding”. A for midable 38 percent had no idea what plan they had signed up for, and 50 percent were unsure what the contract included.
Although these complex products are often viewed as a grudge purchase, Cassel says she recommends that motorists explore the options. “It’s all about affordability. The customer is guaranteed approved dealerships, original manufacturer-approved equipment, approved parts, state-of-the-art technology and trained technicians.”
A service or maintenance contract also means that someone else takes on the burden of price increases, she says.
It is vital that motorists know the terms of their service and maintenance plans, Cassel says, citing “nasty surprises”, such as finding out that a service plan does not include replacing the brake pads.
Evidence suggests that consumers are so eager to take delivery of their new wheels that they sign the contracts without studying the specifics of what’s covered and what isn’t, not to mention their contractual obligations. Against that, Cassel says, all product information is available online, “so consumers do have the tools to conduct research and educate themselves”.
Edmin Naidoo, the divisional manager of after sales for Mercedes-Benz cars, says the company expects its customers to receive “a proper and thorough understanding of such contracts” from dealerships. In the experience of Mercedes-Benz, customers generally adhere to the terms, he says, noting that the vehicles themselves provide useful “early warning” reminders on the instrument cluster.
Whereas maintenance contracts provide an income stream for dealerships, Naidoo says “the primary objective is to ensure the customer enjoys hassle-free motoring over the lifetime of the vehicle, as well as preserving the value of the vehicle in terms of future resale, to the benefit of the customer”.
According to the National Association of Automobile Manufacturers of South Africa, there were about 10 million cars on the road in 2015. Although it’s not known how many of these are covered by extended warranties and service or maintenance contracts, it is assumed that a significant percentage have some form of protection.
The bottom line: industry insiders say: when signing up for a service plan, maintenance contract or extended warranty, it is in your interests to study the fine print and ask questions, such as: “If the cam belt fails at 120 000km and the engine is damaged, am I covered?”