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OFT forces manufacturers to lift service restrictions

Citroen, Ford, BMW, VW, Peugeot and DaimlerChrysler have agreed to lift servicing restrictions following a major inquiry into new car warranties by the Office of Fair Trading. However Which? magazine has been forced to apologise after claiming seven carmakers were still offering warranties in breach of EU law.

Last year's OFT report into new car warranties found that servicing at a main dealer typically costs 70% more than at an independent. Changes to block exemption regulation mean drivers can take their new cars outside the franchise network for service and repair work without invalidating a warranty.

John Vickers, OFT chairman, says: “The car industry's response to the OFT's recommendations to remove servicing restrictions is good news. Consumers should now benefit from increased choice and competition between independent and franchised garages.”

Consumers will be advised to shop around, but the OFT is urging them to only use garages that carry out servicing in line with the manufacturers' service schedules. Car maintenance records must be completed and receipts for work should be retained in case problems with a warranty claim arise.

Which? had this month praised carmakers from the Far East like Mazda and Toyota for offering three-year cover. But it lambasted Ford, Proton and Vauxhall for only providing one year's worth of cover before passing the responsibilities over to the dealer network for two years or up to 60,000 miles.

“The small print on such dealer-based warranties often has important differences on servicing repairs and mileage limits, for example, which means they're far less valuable to consumers,” says the report. In fact, both Proton and Vauxhall offer carmaker-backed three-year/60,000-mile warranties. They should not have been placed in the 'Worst' category.

Which? also claimed many carmakers still made it a requirement to retain the car within the dealer network to keep the cover valid in the later dealer-based period of the warranty, and named BMW, Chrysler, Daewoo, Ford, Jaguar, Mazda and MG Rover as culprits. It has now apologised, but maintains that Ford is still in breach.

The SMMT slammed the report as fundamentally flawed. It says car companies responded in full to the OFT concerns.

Christopher Macgowan, SMMT chief executive, says: “The majority of consumers prefer to service their car through a local franchised dealer. This is because they have confidence in their expertise and recognise the value of a full dealer history when the come to sell.

“Nevertheless, since the OFT published its report into new car warranties last year, terms and conditions have been changed. The industry fully accepts that consumers should have the choice of where to service their cars, although we are still looking for clarification over what level of information should be kept to prove that a maintenance schedule has been met.

“This Which? report is wrong and sends a confusing message to consumers. It is a cheap shot at an industry that offers comprehensive warranties.”

Daewoo, Jaguar, Mazda, and MG Rover confirm that servicing restrictions are not a condition of their warranties. BMW and Chrysler removed this clause as the report was going to press.

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