Capped Price Car Servicing – Good Value or Trick?

So what is capped price car servicing?

Capped price car servicing is a routine maintenance program that supposedly offers new car owners a fixed or capped price on servicing requirements, but only provided that certain conditions are met. (Each manufacturer is different). These car services are usually marketed as an enticement for purchasing a new car, although they are primarily used to keep customers coming back to the dealer for servicing and purchase of parts and accessories within the dealership.  (The dealerships/manufacturers needed to try and reverse the poor retention rate, which they created in the first place!)

Stuart Charity (Executive Director of the AAAA) said that many car companies use the term “capped price” to give the impression to motorist that such plans offer full transparency over pricing and superior value for money. “In reality, this is often not the case. It is important that consumers carefully read the conditions involved in any capped price servicing deal prior to purchasing a vehicle,” he said. “For example, vehicle owners may not be aware that the cost of a capped price service program may be built into the purchase price of that car.”

What we have found is that most of the capped price servicing plans do not cover critical service items in the manufacturer's recommended servicing and that these can come at an additional cost! This is not very transparent at all. You can learn the truth about Capped Price Servicing by checking out this flyer from the AAAA. It has information on basic questions you should ask the dealership before entering into a capped price servicing plan, exposing some of the myths and your choice of repairer.

Do I need to take my car back to the dealership for servicing to keep the warranty?

ABSOLUTELY NOT.

An extract from the ACCC Motor vehicle sales and repairs: An industry guide to the Australian Consumer Law states: “Any suggestion by manufacturers or dealers that vehicles need to be serviced at a licensed dealer to maintain the owner’s consumer guarantee rights is not correct”.

The Klein Partnership (TKP) conducted market research with 1,500 car owners in early 2018 and some of the research found:

• 31% of people agree that capped price servicing is a rip off (That there’s no such thing as a free lunch)
• 39% of people agree that new cars must be serviced by a dealer to keep the warranty, but over half of the females surveyed believed that new cars need to be serviced by a dealership to keep their warranty
• 78% agree it’s important to have a good relationship with your motor mechanic

What we are trying to say is legally, you can have your car serviced WHEREVER you choose WITHOUT voiding your warranty!  Your car, your freedom, your choice! Again read the flyer about choice of repairer to understand your rights.

But is it CHEAPER to go back to the dealership?

This is a tricky question….. let’s be honest though, a dealership isn’t going to offer you the ‘best deal’. One of their noted tactics is to push you to buy genuine parts only (which can be up to 60% more expensive than comparable aftermarket parts) or they count on using their salesman skills to upsell other products to you that are probably not needed. AND you don’t need to use genuine parts to keep you new car warranty! The ACCC Australian Consumer Law states that as long as quality parts are used (fit for purpose) and from a reputable parts supplier, this would not void the manufacturer’s warranty. Once again you have the right to choose which brand of parts you have fitted to your car.

If your vehicle is still under new car warranty, we do use genuine parts to save you any hassle if you were to have a warranty claim, but if you choose to use another brand (like Ryco) then we are more than happy to use these parts for you.

A few final things to consider before choosing where to get your car serviced:

• What are you getting in the service? Some dealers have been known to save time by doing the BARE MINIMUM in servicing your car.
• Are you given a choice? Is your mechanic allowing you to choose between genuine or aftermarket products to match your needs/budget?
• Are you happy with the overall quality and customer service?

I agree that pricing is important, but a good quality mechanic who knows your car, keeps good records and is open, honest and transparent while using the quality parts and the best equipment, have to ensure peace of mind.

-- Adele

If you have any questions or if you feel like your vehicle needs some check up, just bring your car to our shop and we’ll be more than happy to assist you. We take pride in providing personalised car maintenance so no job is too small or too big for us.

We offer log book service, air conditioning repairs, auto electrical services and so much more. We also offer loan cars and provide pick up and drop off in the local area for our clients. Our various payment options are available to make sure that you get that car service without worries.

If you have any inquiries, you can reach us at (07) 3812 1341 or drop us a message on our Facebook page.

Updated by Adele Goodwin on 12/10/2021