Ever went shopping for a new set of wheels, sat in the seat across from the friendly salesman and tried to suppress that oncoming yawn as he started to explain the service plan and available warranties of the glitzy new vehicle you just signed on the dotted line for?
We are not judging. Who wants to listen to clause after clause of ‘so many kilometres or this time, depending on which comes first that will allow you to maintain x, y and z’. Yawn.
Next, the friendly salesman might ask you something along the lines of: ‘so sir/mam, can I sign you up for the extended service plan that also includes a comprehensive warranty of an additional two years?’ At this point you might answer; ‘Yes,’ hoping to speed the technicalities along, ‘you can sign me up’.
Wait a minute, though. What exactly did you just agree to?
It happens on a daily basis. People buy new cars, and in the excitement to sample the memory function of the front seats and the sound quality of the rear speakers, they sign document after document agreeing to something they don’t fully understand.
In this case, it’s vehicle maintenance. While it is an important aspect of owning a car, the terms and clauses are not always properly explained when the keys are finally handed over.
So, what then is a service plan and how does a vehicle warranty differ? Also in most cases what does it cover, or what doesn’t it cover?
Greig Hains, Managing Director at motor financial services provider, MotorVaps outlines the key differentiators between the two most popular value-added products (VAPS) — namely, warranties and service plans. “With a better understanding of what these plans cover, you can make an informed decision on which is best for you,” says Hains.
WARRANTIES
According to Hains, a warranty is essentially a contract entered between you and your car’s manufacturer that if anything goes wrong — as far as the mechanical components of your car go — these defects will be resolved or repaired at no cost to you.
Components most commonly covered under warranty include the engine, gearbox, differential, turbo assembly and more. These are essential, and expensive, components that are critical to the safety and smooth running of your vehicle.
There are some exceptions that could impact a vehicle’s warranty terms, though. These include any vehicular damage that is brought on by driver abuse, negligence (this includes things like not regularly checking a car’s oil and coolant levels) or incorrect use of the vehicle.
While new cars almost always come with a warranty which differs from one manufacturer to another — as well as across vehicle ranges and models, all warranties are restricted in terms of a set time and/or mileage.
For example, a three-year/100 000km warranty will only be valid for the stated period or mileage, often of whichever comes first.
SERVICE PLAN
A service plan covers the cost of having your car serviced at set intervals, by a manufacturer approved service centre. As with a warranty, service plans are generally restricted to a specified time and/or mileage.
Services often include the replacement of items like air, fuel and oil filters, brake fluid, oil and gearbox oil, spark plugs and coolant (depending on the manufacturer’s specifications). The regular servicing of a vehicle is vital for it to run optimally and safely.
Having a service plan means that you are not impacted by price changes relating to labour or parts — whether the service plan is included in the price of the car, or you are investing in an extended service plan.
A common misconception amongst car buyers is that a service plan is all-inclusive and covers components such as those impacted by wear-and-tear. This is, however, not the case. Items that wear out with constant use, like brake pads and windscreen wipers are covered under a maintenance plan, which, in essence, is a comprehensive plan that also includes servicing costs.
According to Hains, it is crucial for South African motorists to know what is available to them when purchasing a new or used car.
“Many motorists already have these plans and don’t know what they are entitled to. Others are aware that their plans are coming to an end and believe that they have no options to extend their coverage. It is important for South African motorists to take some time to investigate which option makes sense for them, to save them money, grey hairs and sleepless nights,” he concludes.
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