/ Motoring

The hidden costs of fixed-price car servicing

Car park

Car servicing bundles promise cheaper and predictable maintenance costs. But there’s doubt over whether they actually benefit consumers, rather than just carmakers.

The idea of getting your first three years’ of car servicing for a couple of hundred quid is very tempting. I’ve just seen Volkswagen is offering a £250 servicing pack for the first three years (or 30,000 miles) with any new VW sold before the end of this year – looks like a bargain versus pay-as-you-go maintenance costs.

Some carmakers even run special offers of three years’ free servicing on new cars. Indeed, ever since BMW decided to sell its incredible value £150 ‘TLC’ servicing pack with the Mini back in 2001, there’s been a trend for carmakers to offer such bundles.

Get a little TLC

TLC is now legendary among Mini owners – currently it costs just £200 for the first five years’ servicing (or up to 50,000 miles). What’s more, it’s fully transferable from the first owner to the next, which is great news for both buyer and seller.

Such fixed-price servicing deals certainly take the hassle and worry out of annual servicing. You simply pay upfront and then don’t have to worry about hideous servicing bills for three years.

So it seems like a win-win situation for car buyers. Only I can’t help thinking it’s the carmakers that really benefit… Why? Because it keeps us coming back for more.

Think about it. You no longer have to take your car to a main dealer for routine servicing while it’s under warranty (that restrictive warranty clause was scrapped in 2004). And now, you don’t have to go back to a main dealer for repairs while your car is under warranty either – you can pick a good independent garage to do warranty repairs for you instead.

So having bought a new car, you need never actually go back to the main dealer again if you don’t want to. (Believe me, there are some I wouldn’t want to).

The downside of servicing bundles

This means main dealers stand to lose out on very lucrative servicing and repair work. After all, previous Which? research on servicing has found independent garages often undercut main dealers by up to 30% for the same job.

The ‘free’ or fixed-price servicing bundles keep you locked into visiting to the main dealer for the first few years – which means two things:

1) While your servicing is gratis or pre-paid, your car’s ‘consumable items’ won’t be – such as tyres and brake pads. And you’ll probably pay handsomely for parts and labour if the main dealer replaces these.

2) Every time you go back to the main dealer it’s another sales opportunity. You know the patter: “Have you thought about trading in for a newer car? We have some excellent offers running at present – and your car will only get more costly to run…”

And who’s to say how much of the servicing cost might be front-loaded onto the list price of the car? So we’re still paying for the work one way or another.

I’m not saying we shouldn’t buy fixed-price servicing deals (or take up the free offers), but let’s think about where this trend is going. The upshot could be that every new car sold is bundled with three-years’ ‘free’ servicing – with no transparency over the true cost to the buyer, and no ability to shop around for cheaper deals from rival garages.

If you ask me, that loss of choice and competition is a high price to pay for an easy life.

Comments
Guest
John says:
28 June 2011

Picking up on your point of expensive consumables and labour, I have just been quoted £601 to have the two radiator cooling fans replaced on a 2005 Golf diesel by the local main dealer. Labour is at the special price of £84 /hr! and it takes two hours. How does it cost £400 for two small motors with plastic fan blades – I think VW should be referred to the OFT.

Guest
Smith says:
4 March 2014

This tactic of offering so called free servicing or call it prepaid servicing, as it actually means is a way to make customers fool on the name of free servicing. They actually charge a big amount to the owner for a fixed period of time but if you reach to the center for servicing they charge you extra bucks. As clearly mentioned in the blog, you have to get to your dealer to avail this so called free servicing that even become more paining. The better way is to rely on your neighborhood service center who provides you with detailed cost estimation before going for the servicing.

Guest
Steve says:
13 November 2016

I was subjected to some dodgy sales tactics by Mazda. I should consider this as get 20% off todays service – actually only 11% and when I checked the cost of my next two services the plan price of £840 v £748 means unless costs increase dramatically in the next two years it does not appear to be worth it given you are committed to them and are paying up front. Also most unimpressed with £96.95 labour costs and the fact that interrelated jobs are fixed labour charges. For example, front shock Gaitors 2 hours for both, brake discs – 42 minutes and brake pads 42 minutes. You take brake pads off to fit the discs