29 September 2021

Service plans, maintenance plans and warranties – confused?

Submitted by Jacqui

Since the Competition Commission Guidelines came into effect on 1 July, consumers can now choose where they want to have their new car serviced. But, if you are still confused about the difference between a service plan, a maintenance plan and a manufacturer’s warranty, you need to read on.

Dewald Ranft, Chairman of the Motor Industry Workshop Association, a proud association of the Retail Motor Industry Organisation (RMI), says it is important to understand what the differences are between the three options available so you can make an informed decision.

What is a service plan?
The first thing you need to understand is that a service plan is not a maintenance plan and only covers service parts and labour used in accordance with a car manufacturer’s (OEM) service schedule. This includes parts which are typically replaced during a scheduled service like oils, filters, spark plugs and air filters. This means that parts like brake pads, v-belts, brake linings are for the vehicle owner’s expense, as are internal and external trim, body work and paint due to normal wear and tear, all glass, tyres, wheels, wheel alignment, accessories, electrical wiring components and additional maintenance that may be required as a result of the vehicle being operated in severe or unusual conditions.

Service plans further exclude maintenance that may be needed as a result of modifications made to the car, or that may be needed because of accidents, abuse or misuse; a failure to use the car as stipulated in the vehicle service book; or that have come about through failure to stick to the maintenance schedule. Although service plans used to be incorporated into the price of the vehicle, consumers are now able to choose whether or not they want to purchase one.

What is a maintenance plan?
Labour costs are covered through this plan. This means that if the repair or part is not typically included in a regular service, it might be covered in the maintenance plan. The customer needs to check which items are covered by the plan with the car manufacturer where they purchased the car.

What is a warranty?
A warranty is provided by the car manufacturer and provides insurance against the failure of vehicle mechanical breakages. New cars come with a standard warranty, but this becomes void if repairs on warranty parts are carried out by any party besides the manufacturer. Car owners can choose to extend the warranty once it has run out. Meanwhile it is important for customers to remember that warranty parts must be repaired by the car manufacturer. The manufacturer cannot void a warranty if the vehicle has been serviced correctly at an independent service provider who conforms with the manufacturer specifications.

Car owners have the option of extending that warranty once it runs out. Examples of what components may be covered under a warranty include the engine (including turbo chargers); fuel system and fuel pump; drive shafts and axles; brake components etc.

Our best advice:

  • You have the right to purchase a new vehicle without any value added products such as service or maintenance plans. Make sure these are separated out so you can check competitive costs;
    • Ensure you know the difference between the three
    • Only repair warranty parts with the OEM
    • An OEM cannot void your warranty if you service your car correctly at an independent service provider who conforms with manufacturer specifications.