Com­pe­ti­tion code should cut price of car re­pairs

Sunday Times - - Money - By CHARLENE STEENKAMP

● The days are num­bered for ab­surdly pricey mo­tor re­pairs and a lack of choice on where you can have your ve­hi­cle ser­viced for fear of los­ing the ve­hi­cle war­ranty or main­te­nance plan.

Wy­nand van Vu­uren, head of le­gal at King Price, says that in SA ve­hi­cle man­u­fac­tur­ers have been ma­nip­u­lat­ing the mar­ket by in­sist­ing that you use a lim­ited list of ac­cred­ited ser­vice providers which is cho­sen by the man­u­fac­turer. The man­u­fac­tur­ers fur­ther spec­ify that only orig­i­nal parts may be used for ser­vices or re­pairs, which has driven up the cost of these parts to the con­sumer.

Van Vu­uren says if you look at the orig­i­nal mo­tor parts and com­pare them with af­ter­mar­ket parts that are also SABS ap­proved, the orig­i­nal parts are a “mind-bog­gling” 300%-400% more ex­pen­sive.

The Com­pe­ti­tion Com­mis­sion has been in­ves­ti­gat­ing an­ti­com­pet­i­tive prac­tices in the au­to­mo­tive in­dus­try and has pub­lished a fi­nal draft code of con­duct for ve­hi­cle man­u­fac­tur­ers and the in­sur­ance in­dus­try. When the code is im­ple­mented there will be more than 8,000 work­shops to re­pair your ve­hi­cle and, pro­vided they meet stan­dards the code pro­poses, you will not lose the war­ranty on your ve­hi­cle.

The ef­fect of greater com­pe­ti­tion and less ex­pen­sive mo­tor parts is likely to lead to lower re­pair costs, which should fil­ter through to lower in­sur­ance pre­mi­ums, ac­cord­ing to Van Vu­uren.

This, in turn, will hope­fully en­cour­age driv­ers who do not have any in­sur­ance cover on their ve­hi­cles to take out cover.

About 70% of cars on the road are not in­sured be­cause own­ers can­not af­ford in­sur­ance, he says.

The fi­nal draft states that it aims to widen the pool of ap­proved ser­vice providers that can un­der­take in-war­ranty ser­vice and main­te­nance work, in-war­ranty me­chan­i­cal re­pairs and in-war­ranty mo­tor-body re­pairs and to al­low in­de­pen­dent ser­vice providers to un­der­take such work in ad­di­tion to au­tho­rised providers.

The code also plans to in­tro­duce mea­sures that will give the con­sumer a greater choice of ser­vice plans, com­pel in­sur­ers to al­lo­cate mo­tor-body re­pairs fairly among ser­vice providers and will en­sure there are no un­fair re­stric­tions on the sale or distri­bu­tion of orig­i­nal spare parts by al­low­ing you to choose suit­able spare parts for re­pairs.

Un­der the pro­posed code, man­u­fac­tur­ers of par­tic­u­lar brands may not pro­hibit ap­proved ser­vice providers or ap­proved deal­ers from ser­vic­ing or do­ing main­te­nance on mo­tor ve­hi­cles made by other man­u­fac­tur­ers.

You will be as­sured of the right to ser­vice and main­tain your mo­tor ve­hi­cles at a ser­vice provider and pan­el­beater of your choice, re­gard­less of whether that provider is an ap­proved ser­vice provider or an in­de­pen­dent ser­vice provider. Most im­por­tant, work done by an in­de­pen­dent ser­vice provider will not in­val­i­date the war­ranty.

The code says you must be ad­vised that you are not com­pelled to use ap­proved deal­ers or ap­proved ser­vice providers only for in­war­ranty ser­vices and main­te­nance.

The code will pro­hibit man­u­fac­tur­ers and in­sur­ers from en­ter­ing into ex­clu­sive ar­range­ments to do mo­tor-body re­pairs on a man­u­fac­turer’s ve­hi­cles within a des­ig­nated geo­graphic area.

The code states that in­sur­ers must en­sure the fair al­lo­ca­tion of work among man­u­fac­tur­ers and in­sur­ance-ap­proved ser­vice providers. In­sur­ers will have to pub­lish a list of all their ap­proved ser­vice providers on their web­sites and of­fer you a choice of these within your geo­graphic area.

You will be able to fit non-orig­i­nal spare parts when those spe­cific parts’ war­ranty has ex­pired, without void­ing the bal­ance of the ve­hi­cle’s war­ranty, and can have them fit­ted at a ser­vice provider of your choice.

Ac­cord­ing to the draft code, any li­a­bil­ity that arises from dam­age to the mo­tor ve­hi­cle, in­clud­ing dam­age as a re­sult of the spare part or the fit­ment thereof, will be re­solved in terms of the Con­sumer Pro­tec­tion Act or any other ap­pli­ca­ble leg­is­la­tion.

Man­u­fac­tur­ers will be pro­hib­ited from en­ter­ing into any agree­ments with man­u­fac­tur­ers or sup­pli­ers of spare parts, com­po­nents, tools or equip­ment that re­strict the man­u­fac­turer or sup­plier’s abil­ity to sell those goods to ser­vice providers or end users, ex­cept for those spare parts, tools or com­po­nents that are pro­tected by in­tel­lec­tual prop­erty rights or are linked to a mo­tor ve­hi­cle’s se­cu­rity sys­tems.

Man­u­fac­tur­ers will also be pro­hib­ited from set­ting min­i­mum re­tail prices for spare parts and com­po­nents.

To recog­nise the rights of the con­sumer, the code pro­poses that you must be able to refuse to buy value-added prod­ucts (such as main­te­nance plans, ser­vice plans and ex­tended war­ranties) and to sep­a­rately buy such a plan from any provider of your choice, to se­lect the du­ra­tion of main­te­nance plans and ser­vice plans on a new mo­tor ve­hi­cle, and to trans­fer a main­te­nance plan and/or a ser­vice plan to a re­place­ment mo­tor ve­hi­cle if the orig­i­nal ve­hi­cle is writ­ten off by the in­surer.

In in­stances where there is no re­place­ment mo­tor ve­hi­cle af­ter a ve­hi­cle write-off, you must be given the right to can­cel the value-added con­tract and/or re­ceive a re­fund of the value of the bal­ance of the prod­uct.

Kwanele Sibanda, the man­ager: cor­po­rate af­fairs at the South African In­sur­ance As­so­ci­a­tion, says the code will be vol­un­tary and will bind par­ties such as man­u­fac­tur­ers, in­sur­ers and in­dus­try as­so­ci­a­tions that are sig­na­to­ries to it. To en­sure the qual­ity of the work un­der­taken by in­de­pen­dent work­shops, the code pro­vides for ac­cess to train­ing and tech­ni­cal in­for­ma­tion, he says.

Sub­mis­sions on the fi­nal ver­sion of the code are be­ing con­sid­ered by the Com­pe­ti­tion Com­mis­sion. Once fi­nalised, the code will be pub­lished in the Govern­ment Gazette along with a list of sig­na­to­ries to it.

Pic­ture: Alais­ter Rus­sell

The Com­pe­ti­tion Com­mis­sion has pub­lished a draft code of con­duct for the au­to­mo­tive in­sur­ance in­dus­try that should bring down the price of car re­pairs.

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