25/06/2021
Big changes are coming to South Africa’s motoring landscape on 1 July 2021.
For the first time ever, owners of new cars will have the right to repair or service their vehicles at an independent provider of their choice.
These owners won’t be locked into the restrictive embedded motor or service plans, and vehicle manufacturers won’t be allowed to void warranties if owners choose to go with an independent service or repair provider.
1. Dealerships, OEMs can’t lock you in -
1.1 As per the new guidelines, car manufacturers (known as Original Equipment Manufacturers or OEMs) cannot obstruct you from seeking service, maintenance, or mechanical repair work for your new motor vehicle at an independent Service Provider (ISP) of your choice. What’s crucial to note here is that you as the consumer still have the right to seek these kinds of services from your approved dealership, but you now have the additional option of going to an ISP if you so wish.
2. Unbundling of plans at the point of sale -
2.1 There will be an unbundling of maintenance plans and service plans at the point of sale from the purchase price of the motor vehicle. This will allow consumers to exercise choice regarding whether or not they want to purchase the maintenance plan or service plan from their dealership or from an independent provider. This is common practice elsewhere in the world. In the instance where a car is written off, OEMs and independent providers must transfer the maintenance plan or service plan to a replacement vehicle. Dealerships or independent providers also have to disclose all information regarding the maintenance and repair of their vehicles, as well as the terms and conditions thereof.
3. You can fit non-original parts -
3.1 Consumers will be able to fit original or non-original spare parts, whether by an approved dealer, motor-body repairer, or an ISP, during the in-warranty period. The quality of these parts will be dealt with in line with consumer protection laws, as well as existing warranties. Consumers should lookout for what is called OEE, or Original Equipment Equivalent parts. These have the same specifications and safety features as OEM parts but are sold at lower prices. Interestingly, OEE and OEM parts are often made in the same factories and are only differentiated by their branded markings.
4. More accessible dealership choices
4.1 In South Africa, motor dealerships have traditionally been large, multimillion-rand showrooms, situated mainly in suburbs, towns, and cities. There have historically been very few dealerships situated in townships or outlying areas. A big reason for this has been that OEMs often place specific requirements regarding, for instance, the procurement of furniture, fittings, and finishes as well as the size and location of the premises. But with the new guidelines, the Competition Commission has set out that OEMs must lower the financial barriers and location requirements for new dealerships to boost their footprints. This must still be balanced with the need for economic rationale, but it could open up a whole new market.
5. Insurers must give you more choice -
5.1 Other changes outlined in the guidelines are set to particularly impact the way your insurer deals with your repairs, especially when your car parts fall out of their warranty period. These changes include that insurers will need to offer consumers more choice of repairers within geographic areas for out-of-warranty repairs. Insurers are expected to approve any repairer that meets their standards and specifications to undertake repairs on out-of-warranty vehicles.
