Warranties at risk


THE RECESSION has encouraged car manufacturers to take a tougher position with motorists seeking to have work done under the terms of their car’s warranty, industry sources have confirmed.

More and more companies are insisting that unless a car has been serviced and maintained exactly to the required manufacturer’s standards, warranty claims will be rejected.

“These claims are about money and costs are being slashed throughout the industry. We cannot sustain claims when people have sought what they think is cheaper servicing or parts – outside the dealer network – and then come back to us when it does not work. Also, if the car is out of warranty then you are most likely out of luck”, one senior car company executive said this week. Apart from warranty terms, car companies have traditionally allowed for goodwill gestures in order to maintain customer loyalty. However, the terms of goodwill arrangements have become much tighter in recent months.

“If a dealer wants to do something for a customer with a genuine problem that is one thing but expecting the distributor to fork out for that work every time is not really on”, said the same source.

One unfortunate customer with a two year-old car was recently refused warranty cover when the engine suffered “catastrophic failure” (i.e.: it blew up) because the car had not been serviced since it was bought. The owner apparently assumed the two year time interval for servicing covered such a claim but did not consider the mileage clause. Whichever is reached first is the main criterion for a claim. The owner is now facing a bill of over €7,000.

For legal reasons and in order to maintain customer loyalty, many companies are reluctant to discuss how they treat claims or even if they get many. However, since the recession it has become evident that more and more people are avoiding main dealers and opting for what they perceive as cheaper outlets or ignoring servicing completely.

Mazda Motor Ireland says it has noticed an increasing number of warranty claims where the car has “not been serviced by an approved Mazda dealer, according to the servicing schedule and, in particular, where incorrect oil has been used, causing damage to the engine. In times like this, the tendency can be to take short cuts but this can lead to serious and more costly problems in the future”, said a Mazda spokesman.

BMW in Ireland makes the same argument. “We have noticed a rise in the numbers of small outlets offering what they say is BMW servicing for €75 or so. In many cases they can make things worse and they are certainly not up to the dealer standard,” says a company spokesman.

BMW’s after sales director, Paul Murray, says non synthetic oil has, in some cases, been used during such services. “That has implications for fuel economy and the life of the engine.”

While BMW says every warranty case is taken on an individual basis, Paul Murray says the company will always favour those who have stuck with the dealer network for their servicing requirements. “We reward people who remain with the dealer. Anyone who does not, will not enjoy the full extent of our goodwill,” he says.

“To be perfectly honest, anyone who comes to me with a problem after they have gone off for cheaper work and it has all gone wrong will be getting pretty short shrift. We have invested too much and we are losing too much to be in the friendly goodwill game.”