Fleet News

Fleets save £140m after OFT crusade

UK fleet operators have saved up to £140 million over the past two years by using independent rather than franchised garages for after-sales services.

The massive financial saving is revealed in a report on the effectiveness of a campaign to clear up confusion surrounding car servicing and the impact on warranties.

Many fleets were choosing franchised garages fearing that if they allocated the work elsewhere the car’s warranty would be invalidated.

A report published in December 2003 found that motorists were charged about £80 more for a new car service at a garage attached to a franchise dealer than at an independent garage, even though the quality of work was the same.

This prompted the launch of a campaign by the Office of Fair Trading (OFT) to educate fleets and private consumers about lower prices offered by independents.

It also encouraged the Society for Motor Manufacturers and Traders (SMMT) to introduce measures that the majority of car owners have the right to have their vehicle serviced at any garage without invalidating the warranty.

Now, an independent evaluation into the success of the OFT campaign, carried out by economics consulting firm Europe Economics, suggests that fleet operators have saved between £90 million and £140 million over two years.

OFT chief executive John Fingleton said: ‘This report highlights an excellent example of the OFT working with industry and using its full range of tools to deliver a high-impact outcome for the consumer at a low cost and in a short amount of time.’

Last month, fleets were warned that using independent garages for service, maintenance and repair work could have a negative financial impact on a car’s residual value (Fleet NewsNet, June 1).

Commenting on suggestions of how much fleets can save by opting to use independent service providers, Colin Whelan, manager of CAPcalc MVM, said: ‘There are significant savings to be made by choosing an independent service provider. It is essential, however, to ensure that these outweigh any potential penalties when the vehicle is sold on.’

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