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The Competition Commission is set to replace its proposed automotive code of conduct for South Africa.
It's set to eliminate embedded motor plans and introduce ground-breaking changes for the vehicle industry, consumers and the economy at large, with new guidelines that will be used for the enforcement the Competition Act and lead to prosecution if there is any breach.
READ: Code of Conduct' but guidelines instead – what this means for the SA car industry
The steps taken are said to help restore some power to motorists, by giving them the right to choose where they take their vehicles for repairs and services, without making their warranties null and void. As it stands, warranties can be rendered invalid if people replace parts or even change the oil themselves.
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This is required to be done by an approved service provider, but with the new guidelines, it is proposed that this will change.
According to Vera Nagtegaal, Executive Head of Hippo, it seeks to address the restrictions to competition in the automotive aftermarket industry, by lowering barriers to entry and ensuring that more businesses are able to gain access to in-warranty service and maintenance work, in-warranty mechanical repairs, as well as in-warranty car body repairs.
Nagtegaal said: "What this will mean for consumers is that it will provide them with a wider network of service providers that offer services at a competitive price when it comes to new cars, spare parts and other products. It will also help to create a more transparent automobile industry across the board."
Nagtegaal explains that motor warranties are insurance policies that protect consumers against the costs of car parts and labour, in the event of mechanical, electrical or electronic failure of a part.
He said: "They give some peace of mind to motorists, with the manufacturer vowing that any manufacturing defects will be investigated, replaced or repaired within a certain time. Coverage ranges from electrical issues to the engine, sensors, the gearbox and fuel elements. Vehicle maintenance is not generally included in these warranties."
Maintenance Plans, on the other hand, cover labour, fees payable for servicing vehicles and anything that needs to be replaced or things that have been damaged or worn out over time. This includes fuses, brake pads, and wipers. Some plans exclude cover for items such as the engine, clutch, gearbox, tyres, wheel alignment and windscreens.
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Nagtegaal warns that a motor warranty will usually not cover consumable items, computer-related problems, internal and external aesthetic and body due to wear and tear, glass, tyres, wheels, wheel alignment, accessories, electrical wiring, brakes and brake pads, wipers, batteries, or fan belts. It also excludes repairs after accidents and environmental damage.
Once warranties expire, people are more than likely left to cover any repairs on their own. This is when some take the plunge and simply opt to buy a new car. There are however other ways to deal with this – with some dealers, product providers or insurance companies providing extensions to warranties.
Nagtegaal said: "There are many options to consider when choosing a new motor warranty plan. If you want to extend your current Manufacturer’s Warranty Cover, an extended warranty plan is advised. It should be noted that there may be limitations which would be based on the vehicle’s model, age, mileage, service and maintenance history."
When it comes to older cars, it is advisable to consider a warranty to cover unexpected repairs. People should also consider a service plan so that their vehicle can be properly maintained. This could prevent future problems, especially with second-hand cars.
Image: iStock
Nagtegaal advises said: "If your vehicles manufacturer’s warranty has already expired you can take out this warranty to cover your vehicle.
"Your Motor Warranty Insurance Policy will cover you for the repair and/or replacement of components, specifically listed under the respective policy’s specifications, arising from a mechanical and/or electrical failure during the cover period of your policy."
It is important that consumers are aware of the various measures put in place to protect them.
She adds said:"There have been many instances where people have been informed that their warranty has expired, without them knowing that the vehicle they bought had a warranty that kicked in months before they took ownership. This is usually due to things like “pre-report” sales or dealings within dealerships."
"When it comes to any changes relating to how motor plans and warranties work, consumers should refer to the new guidelines that will soon be introduced by the Competition Commission. This will prevent exploitation by service providers and ensure that they always get a fair deal when it comes to services, repairs and parts."