The popularity of PCP car finance has allowed car manufacturers to be rather sneaky when it comes to forcing you to have your car maintained by their dealer service network, something that many car buyers are unaware of.
‘I have a car on PCP, do I have to use the dealer service centre for all services or can I use an independent garage?”
Your car servicing rights allow you to have your car serviced outside the manufacturer dealer network without losing your warranty, but there is another issue to consider if your car is financed using a PCP.
Part of the attraction of PCP car finance is that the finance company will guarantee that the value of the car at the end of the term will at least cover the outstanding settlement figure. This is called the Guaranteed (Minimum) Future Value (GFV or GMFV) and it means that your worst-case scenario should be that you can simply give the car back with nothing more to pay.
However, the GFV is dependent on three requirements that you must meet:
1. You must not exceed your agreed mileage over the duration of the term
2. The car must not require any repairs beyond normal wear and tear
3. You must have the car serviced by the official dealer network
It’s the last item that we are concerned with today.
The GFV is a value based on a car with no damage, limited mileage and a full manufacturer service history. If you do not have a FULL manufacturer service history (on time, every time, by an official dealership), then the finance company can either refuse to honour the GFV or charge you a hefty penalty fee.
“Do you have to have your car serviced by a dealership to keep your new car warranty?”
There is considerable confusion among car owners about their servicing requirements, especially regarding what is required for them to maintain their new car warranty. It’s a bit surprising, because the law has been pretty clear on this for many years now.
“I just bought a new BMW and the salesman told me I have to have it serviced by a BMW dealership to maintain the new car warranty. Is this correct? I have seen businesses claiming they can service my car without affecting the warranty.”
Assuming the above is an accurate portrayal of what was said, the BMW salesman has been very naughty here. EU legislation requires all car manufacturers to offer at least a two-year unlimited mileage new car warranty on all their new cars (from date of registration), regardless of any change of ownership. Every car salesperson knows this, or at least they should. Cars outside their original new car warranty are a different kettle of fish altogether, and not covered here.
Under EU Block Exemption legislation, which has been around for many years now, a manufacturer cannot force a buyer to have their car serviced by their official dealership network, and cannot refuse to honour a new car warranty simply because a car has been serviced elsewhere.
However, a manufacturer does have the right to set a servicing schedule which must be adhered to.
Once the UK leaves the EU, there is a remote possiblilty that a British government could eventually overturn this law, but it is unlikely to ever happen. Not only will it not be a priority anytime soon, but local consumer groups would fiercely resist any attempts by manufacturer interests to compel British car owners to go to franchised dealers for servicing.
Many manufacturers offer new car warranty terms that are much longer than the minimum two-year period, but you need to check that the warranty provider is the same for the whole warranty period. Some importers offer a longer period, but after two years the warranty is provided by the local importer rather than the vehicle manufacturer, so the terms and conditions may be different.
New car warranty and servicing – your rights and responsibilities
as a car owner, you have the right to take your car to any licenced garage or mechanic for servicing, but you must ensure that the servicing is carried out exactly as per the manufacturer’s servicing schedule. This means servicing must be undertaken on time and must use any genuine parts or lubricants specified by the manufacturer.
If you choose to have your car serviced by an independent garage or mechanic, make sure they are reputable. Here at CGE Garage we always follow manufacturer recommendations (that's why we will never offer 'flat price' for service).
Keep detailed invoices and receipts for all work done so you have proof that the car has been serviced according to schedule.
If your car requires repair work under its new car warranty, the manufacturer has the right to insist that this work is undertaken by its official dealerships. This is entirely fair, since the manufacturer – rather than you – is paying for this work.
Basically, a good rule to remember is that if you’re paying for the work, you have the right to choose who does the work.
What if it’s not a manufacturer’s new car warranty?
Not all warranties are provided by the vehicle manufacturer, and here you need to be careful.
Many dealers will offer you extended warranties for a new car, or a used car warranty of some description, but these are usually not provided by the manufacturer and are basically aftermarket insurance policies. As such, the requirements may be different and may tie you to a particular dealer or franchise for servicing.
What about my car finance obligations?
It is important to understand that although your new car warranty will not be affected if you service your car outside the dealer network, it may affect your car finance agreement.
Many PCP agreements will insist that the car has to be serviced by an approved franchised workshop to maintain the GMFV if you want to give the car back at the end of the agreement, and if you have a lease then you will also be expected to service the car with a dealership.
This article is a courtesy of: https://www.thecarexpert.co.uk/service-my-car-pcp-car-finance