Car warranties and dealer servicing

Do you need to get your car serviced with an authorised dealer to keep your warranty intact?

  • While car dealers may try to make you believe otherwise, you don’t have to take your car back to the dealer for servicing
  • The ACCC is clear on the point – any qualified mechanic can service your car and fill out the logbook as long as they’re using quality parts
  • Going to an independent servicing and repair shop will not affect your car warranty.
Bought a new car? Then you may wonder if you have to get it serviced at an authorised dealership to keep your manufacturer’s warranty intact. If so, you’re not alone.

A choice survey of 300 car owners found:

  • just under 50% thought they had to return their car to the dealer to maintain their warranty or were unsure
  • of the 105 people who had bought a new car, 90% serviced their vehicle at the dealer.

But despite what your dealer may say, or the impression you get reading the logbook or warranty terms, you’re legally entitled to shop around for the best servicing deal without voiding your manufacturer’s warranty (the rules are different for extended warranties), as we explain below.

Do I need to service my car at the dealer?

The Australian Competition and Consumer Commission (ACCC) says “a manufacturer’s warranty is a promise to the consumer that the vehicle will be free from defects for a certain period of time”.

While a manufacturer can have certain requirements in its warranty terms – such as ensuring any servicing is carried out by qualified staff, according to the manufacturer’s specification, and that appropriate quality parts are used where required – it can’t require you to service your vehicle through an authorised dealer to keep your warranty intact.

“Provided you service the vehicle in accordance with any such requirements, the warranty will remain valid. If the manufacturer’s warranty states that the vehicle can only be serviced by an authorised dealer, this may raise concerns under the Competition and Consumer Act,” the ACCC has said in written guidance to the automotive industry.

 

Dealers rely on car servicing to make profit

Given that car dealers don’t make profits on car sales alone according to industry research, it’s not surprising that they attempt to lure buyers back after the sale to pay for servicing and expensive “original parts”.

In fact, dealers depend on servicing, parts, car finance and insurance to make their profit margins. A motor industry report from Deloitte found on average, nearly 30% of car dealer’s profits came from servicing, while dealers lost money on new car sales.

 

Are genuine parts needed?

Many dealers also angled for dealer servicing by saying genuine parts were either required or highly recommended to keep the warranty intact. The problem here is that genuine car parts can be much more expensive than their aftermarket counterparts. Choice found the mark-up being as much as 60% even though the parts are often identical.

But you don’t have to pay the price premium on parts to be covered. The ACCC’s guidance says that provided you use quality parts, your car manufacturer’s warranty won’t be voided.

If a non-genuine part is used it won’t be covered under the manufacturer’s warranty, but it would be covered under the warranty of the part’s supplier and/or Australian Consumer Law.

To be fair, despite the initial response of dealers, when pushed many did clarify that it’d only be the actual part that wouldn’t be covered rather than the whole warranty being voided.

Logbooks and dealer stamps

A lot of the logbooks provided by dealers will have you believe that you have to take your vehicle back to the dealer for servicing.

Several brands include a space on the service pages indicating that it should either be stamped and/or signed by an authorised dealer. For example, in a Ford logbook, it might have a space for an “Authorised Ford Dealer Log Book Service Verification Stamp” and also has a checklist asking the mechanic to tick that they are an Authorised Ford Dealer Service Department.

Mazda’s logbook asks for a dealer validation stamp and Hyundai’s asks for a dealer’s signature. None of these things are required to keep your warranty intact, but the logbooks certainly make it look that way.

 

What’s the law?

The ACCC has clearly said: “Even if the service page boxes in the logbook are labelled in this way, an independent repairer may sign or stamp the relevant page of the customer’s service logbook (once they have completed the service) without it affecting the manufacturer’s warranty provided any other requirements are met (i.e. the service is carried about by qualified staff etc.).”

 

Capped price servicing

Several car manufacturers offer capped price service deals when purchasing a new car. Locking in a set servicing price may sound like an appealing offer, but check what you’re getting before you sign on the dotted line.

In early 2015, the ACCC took action against Kia over its capped price servicing program. The ACCC said that the car manufacturer had made representations on its website that “the capped price applicable for each service is the maximum you will pay for your scheduled service”.

All the while, Kia’s terms and conditions had allowed scheduled service prices to be amended at any time, and service prices had been changed by Kia four times since 2012.

The offer of one dealership’s “Lifetime Service Plan”, for example, is marketed with the following, “our lifetime service plan allows the reassurance of knowing in advance the maximum cost for each scheduled service”.

The dealership specifies the maximum price applicable when you request a service quote online. But these quotes may change without notice and are only valid for an effective period, usually 30 days. So we wonder what the “Lifetime” in this dealerships Lifetime Service Plan means.

When we viewed the plan, Hyundai’s terms explained that the entitlement to receive the scheduled service for a price not exceeding the published price “applies for the lifetime of the vehicle”.

Extended warranties

A number of the dealers we spoke to said cars needed to be serviced at the dealer the whole time to keep the extended warranty. The ACCC guidance says that extended warranties usually kick in after the manufacturer’s warranty. “A common requirement of these warranties is that the vehicle must be serviced by the dealer offering the warranty. Imposing this requirement on the owner is permissible,” the ACCC says in its guidance.

How to keep your car manufacturer’s warranty intact 

  • Shop around for the best servicing deal and stick with a trusted mechanic. You don’t have to go to an authorised dealer to keep the manufacturer’s warranty intact.
  • Service your car in line with the schedule and specifications in the owner’s manual or warranty logbook.
  • Ask that quality parts be used for servicing (the parts don’t have to be genuine to keep the warranty intact). Ask for an itemised account for the labour conducted and parts installed. If there’s a problem with the parts used, the repairer or part manufacturer will be responsible.
  • Ask the mechanic to fill in your logbook – they don’t need an authorised dealer stamp for the warranty to be valid.
  • If you’re choosing not to service your car through the dealership, ensure your service centre is reputable. NSW and WA have repairers’ licensing schemes, and elsewhere, you can check to see if they’re a member of the Victorian Automobile Chamber of Commerce (VACC, in Victoria) or the Motor Traders Association in the other states.

If you are looking for a reputable mechanic who uses quality parts thencontactour Titan Auto team today for a booking or quote.