Fleet News

OFT probe into car warranties

The Office of Fair Trading has launched an investigation into warranties for new cars to focus on how competition in car servicing is affected by restrictions on where cars may be serviced during the warranty term.

The value of servicing linked to the warranties could be in excess of £1 billion a year. In addition to the manufacturer's warranty (usually one or two years), new cars are often sold with a dealer extended guarantee that increases the warranty to three years.

These are normally valid only if the car is serviced by garages within the manufacturer's network. While manufacturers' warranties do not usually specify where a car must be serviced, in practice the extended warranty will normally be invalidated if the car is not serviced, from new, by an authorised repairer.

The aim of the study is to examine the extent to which garages outside the manufacturers' networks are prevented from servicing new cars, whether competition from independent extended warranty providers is being eliminated and the impact on customers of restrictions on where vehicles should be serviced.

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