Code to fix cars cheaper

Auto trade sug­gests 24 ways to give own­ers more choice

The Witness - Wheels - - MOTORING -

UN­FAIRLY high prices charged by orig­i­nal equip­ment man­u­fac­tur­ers were top of the list of con­cerns from 24 pri­vate com­ments on the first draft of the Code of Con­duct for the au­to­mo­tive in­dus­try.

Gun­ther Schmitz, act­ing chair for Right to Re­pair SA (R2R), said there were sev­eral is­sues raised in the com­ments, but pric­ing dom­i­nated, with con­trib­u­tors say­ing they hope the code will end un­fair pric­ing prac­tices.

Many al­lege that deal­er­ships have been ben­e­fit­ting for years from main­te­nance and ser­vice plans at the ex­pense of the con­sumer. One com­mented say­ing deal­er­ships have been forc­ing con­sumers to com­ply by us­ing threats of void­ing the war­ranty.

Un­re­al­is­tic tar­gets

An­other raises an is­sue he terms ‘man­u­fac­turer banks’. This re­lates to the in­or­di­nately high tar­gets the deal­er­ships are forced to meet.

These tar­gets do not of­fer the re­tail cus­tomer the best deal and in many cases, co­erce the cus­tomer into weaker deals.

Schmitz said the cur­rent an­ti­com­pet­i­tive sit­u­a­tion means in­flated prices for con­sumers.

“Ex­tended war­ranties are lock­ing con­sumers into pe­ri­ods where firstly, they have no choice but to use the dealer for re­pairs and se­condly, they are at the mercy of deal­ers who can charge what­ever rates they choose.”

R2R aims to al­low con­sumers to se­lect where their ve­hi­cles are ser­viced, main­tained and re­paired at com­pet­i­tive prices in the work­shop of their choice.

“Ul­ti­mately con­sumers are be­ing de­nied the right to have their ve­hi­cle re­paired at a work­shop of their choice. We be­lieve this also in­hibits the con­sumer’s right to sup­port lo­cal busi­ness,” he says.

In­sur­ance claims

Schmitz said in­sur­ance was also men­tioned by sev­eral con­trib­u­tors. One com­ment stated that in­sur­ers are cur­rently fo­cused on low­er­ing the cost of claims ra­tios, but ve­hi­cle man­u­fac­tur­ers’ ap­provals are a stum­bling block.

The con­trib­u­tor says that the man­u­fac­tur­ers list what re­pair­ers need to have in or­der to qual­ify as ap­proved re­pair­ers to spe­cific brands. These re­quire­ments gen­er­ally in­clude ex­pen­sive and of­ten un­nec­es­sary equip­ment. And they dif­fer from man­u­fac­turer to man­u­fac­turer.

An­other con­trib­u­tor be­lieves the code does not ad­dress the in­sur­ance in­dus­try’s di­rec­tion of re­pairs and al­leges that in­sur­ance com­pa­nies are as guilty of di­rect­ing re­pairs as man­u­fac­tur­ers.

A third be­lieves in­sur­ance pre­mi­ums will de­crease dra­mat­i­cally if a code is passed.

Schmitz says there’s no doubt that the code will need to tackle is­sues sur­round­ing in­sur­ance. “In­ter­est­ingly at the Au­to­mo­tive Af­ter­mar­ket Work­shop, hosted by the Com­pe­ti­tion Com­mis­sion in March last year, Viviene Pear­son, a rep­re­sen­ta­tive for the South African In­sur­ance As­so­ci­a­tion (SAIA), pointed out that pre­mi­ums are be­com­ing un­af­ford­able be­cause of the price of re­pairs. She said that only 35% of cars in SA are in­sured be­cause con­sumers are un­der pres­sure.

Un­used mo­tor­plans

“Al­ter­nate qual­ity parts do ex­ist and could go a long way to bring­ing down the cost of in­sur­ance pre­mi­ums if used in re­pairs.”

Schmitz said an­other in­ter­est­ing con­cept brought to the ta­ble was the is­sue of mo­tor plans when ve­hi­cles are writ­ten off.

A con­trib­u­tor points out that the man­u­fac­turer re­ceives the full amount of the price of the mo­tor plan in an up­front pay­ment for fu­ture re­pairs and ser­vices on the day that the ve­hi­cle is sold.

Should the ve­hi­cle be writ­ten off in the first few years, the man­u­fac­turer re­tains the full pay­ment of the mo­tor plan.

An­other con­trib­u­tor sug­gests that the man­u­fac­turer should be obliged to re­fund the un­used por­tion of the mo­tor plan to the ve­hi­cle owner or the in­sur­ance com­pany that set­tled the claim.

“The Com­pe­ti­tion Com­mis­sion has ad­dressed many of these is­sues in the draft code. It is go­ing to be in­ter­est­ing to see how the man­u­fac­tur­ers im­ple­ment the Code to ad­dress these,” says Schmitz.

“There is a need for a fair and com­pet­i­tive reg­u­la­tory en­vi­ron­ment that en­ables free­dom of choice for con­sumers and gives af­ter­mar­ket Small Medium En­ter­prises a chance to stay in busi­ness. South African leg­is­la­tion needs to fol­low in­ter­na­tional Right to Re­pair trends which pro­mote South Africa’s ex­ist­ing con­sumer and com­pe­ti­tion laws.

“We be­lieve that the code will be a good start­ing point for this to hap­pen,” Schmitz said.


Gun­ther Schmitz, act­ing chair for Right to Re­pair SA.

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