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Consumers need to be aware that taking their vehicle to an independent service provider (ISP) while it is still under warranty may result in some segments of that warranty being voided, should the work, or the part(s) fitted, not be up to standard, cautions National Automobile Dealers’ Association (NADA) chairperson Mark Dommisse.

NADA represents more than 1 400 franchise dealers nationwide. The Automotive Aftermarket Guidelines, which were issued by the Competition Commission last year, come into effect on July 1.

The overarching goal of the guidelines is to provide improved opportunity for black-owned and small and medium-sized enterprises to undertake service, maintenance and repair work on vehicles – including during the period covered by a warranty. Dommisse says NADA worked with the Competition Commission to draft the guidelines, and continues to support their implementation. However, he notes that it is important for consumers, franchise dealers and ISPs to be aware of their rights and responsibilities, especially as there has been some miscommunication about the guidelines.

Dommisse says it is important to first understand what an ISP is: an independent workshop not aligned to an authorised original-equipment manufacturer (OEM, or vehicle manufacturer, such as Toyota.) “There is no such thing as an authorised ISP – that is a dealership.” Until now, ISPs have been prohibited from working on in-warranty vehicles, notes Dommisse. However, as from July, consumers have the option to take their in-warranty vehicle to an ISP for service or repair work. (Later, as the guidelines are gradually phased in, authorised workshop-only entities will probably come into existence, where the owner is aligned to a brand, but without the huge capital outlay required to also be a dealer. 

For now, however, these do not exist, says Dommisse, which leaves consumers with a choice between an ISP and a dealer to look after their vehicles.) When making use of an ISP, consumers need to be aware of the possible consequences.

“ISPs do not have master technicians, who have specialist knowledge about the brand, and they are also unlikely to use OEM-approved parts, as is the case at dealerships. This means that, while consumers have the right to use an ISP, any damage to the vehicle as a result of the work done, or because of non-original parts fitted during the warranty period, could see segments of the warranty, or the entire warranty, voided, with any disputes to be handled by the ombudsman,” explains Dommisse. “These are very important risks we need to highlight to the public. You can’t take your vehicle anywhere and not lose your warranty. It’s simply not true.”

Consumers also need to know that they will have to pay the ISP for all work done while the vehicle still has a dealership service plan, or if it is under warranty, whereas they would not necessarily have to do so at a franchise dealership.

Also important to note is that while service plans will be unbundled from the vehicle price tag from July onwards, in accordance with the Competition Commission guidelines, this will not be the case with warranties. The warranty comes with the vehicle – “the manufacturer decides on that”, says Dommisse.

He adds that this fact does not necessarily give dealerships an unfair advantage when it comes to the aftermarket, as in-warranty vehicles constitute only 20% of the South African car parc.

Stick to dealerships 

Making use of an ISP only makes sense for some vehicle owners, argues Dommisse, such as an e-hailing driver clocking up 100 000 km each year. However, should a vehicle owner typically drive 15 000 km to 20 000 km a year, selling the vehicle at 100 000 km, that vehicle will have a higher resale value if serviced by a dealership, than if serviced by an ISP. “That is a fact of life.”

Dealership networks also have a nationwide reach that can provide all types of services and warranty work. “We are also good at complying with the Consumer Act,” says Dommisse. “We are accountable to an international brand. “We have excellent facilities and the best trained staff, including master technicians. “The right of recourse is also stronger in a franchise environment than in a non-franchise environment.” That said, however, NADA does expect some shift away from dealerships to ISPs come July 1, with the market to move “into equilibrium eventually”.

 

By Irma Venter