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ACCC busts dealer servicing myth

Valid point: The Australian Automotive Aftermarket Association (AAAA) has welcomed the ACCC's finding on the validity manufacturer's warranties.

Car owners can use independent service and retain the manufacturer warranty too

17 Jun 2014

THE Australian Competition and Consumer Commission (ACCC) has moved to dismantle the long-standing notion that car owners must have their vehicles serviced by a franchised dealer if they want to preserve the manufacturer’s warranty.

A review of logbooks and warranty documents by the ACCC found that the wording was misleading and confusing for consumers, according to the Australian Automotive Aftermarket Association (AAAA).

The AAAA has been trying to dispel the misapprehension among car owners for several years.

In a statement on the warranty issue, the ACCC says that any claim a vehicle can only be serviced by an authorised dealer was likely to raise concerns under the Competition and Consumer Act.

The commission pointed out that many logbooks or warranty documents appear to require that certain criteria must be met if the warranty is to be maintained.

These criteria include that the service should only be done by an authorised dealer, that the logbook be stamped by an authorised dealer and that only genuine manufacturer’s parts be fitted.

“Even if the logbook or manufacturer’s warranty documents contain these requirements, (an independent repairer) can sign or stamp the relevant page of the customer’s service logbook – once (the independent repairer) has completed the service – without affecting the manufacturer’s warranty,” the ACCC statement reads.

However, the ACCC also points out that this was not the case with extended warranties offered by dealers, as opposed to warranties offered by manufacturers. The extended warranties usually kick in when the manufacturer’s warranty expires, the ACCC says.

The commission notes that these extended warranties often contain a condition that the vehicle must be serviced by the dealer offering the warranty.

The commission says that, in these cases, having the vehicle serviced by someone else would void the extended warranty offered by a dealer.

The executive director of the AAAA Stuart Charity said he was pleased to hear about the ACCC statement as he believed many manufacturers still offered warranties that were likely to contravene consumer protection legislation.

Mr Charity said it was common for manufacturers to fail to give consumers adequate information about their rights to seek remedies under consumer protection law.

It was also common for them to use wording in logbooks that suggested servicing had to be done by an authorised service department using “genuine parts and lubricants”.

He said there was a trend in the industry for companies to mirror these warranty practices.

“We believe this behavior is designed to confuse consumers’ understanding of their legal rights.”

Mr Charity said manufacturers had for decades been leading consumers to believe that they risked voiding their warranty if they used an independent repairer for servicing.

“The reality is that consumers have always had statutory rights under Australian law to ensure that their manufacturers’ warranties remain valid when the vehicles are serviced by independent workshops using fit-for-purpose parts and qualified technicians.”

The ACCC issued its statement after it reviewed logbooks, warranty documents and training manuals produced by several major vehicle manufacturers.

“The ACCC identified a range of concerns with respect to compliance with (Australian consumer law). On the logbook issue, the ACCC determined that the wording was misleading and confusing for consumers,” Mr Charity says.

He said the ACCC’s clarification on warranties was a significant win for consumers and the aftermarket industry.

“We will now work to alert the independent repairer and parts sector – and their customers – to the outcome.”

Mr Charity said it was also important to recognise the difference between warranties offered by manufacturers and extended warranties offered by dealers

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