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£200 hourly fee ‘sensationalist’

The Society of Motor Manufacturers and Traders has called findings published by Warranty Direct predicting repair costs at franchised dealers topping £200 an hour by 2008 as “sensationalist” and “difficult to justify”.

The Warranty Direct findings state that, during the past 12 months, labour rates have risen nationally by an average of 4%. But with the most expensive dealers increasing by 10%, some are on course to charge £256 per hour by the end of the decade, if charges continue to rise 10% year-on-year.

“There’s a view in the industry that manufacturers are finding it difficult to find justification for Warranty Direct’s figures,” says Nigel Wonnacott, media manager for the SMMT. “The sort of sensationalist headline that extrapolates these kind of figures simply by applying a continual 10% increase on current pricing leads us to believe that these are not well researched findings.”

Wannacott points out that, although consumers pay a premium for franchised servicing, it is cost effective long term, leading to strong retail values.

The figures published show Greater London is home to the country’s most expensive dealers. “A growing number have been joining the £99 plus VAT club,” says Warranty Direct spokesman Duncan McClure Fisher in a press release from the company.

The study quotes one BMW dealer in Greater London as charging £158.63 per hour during the past 12 months. Other high chargers include £146.88 from an Audi garage, £129.35 from a Land Rover one and £123.38 at a Mercedes-Benz dealer.

Warranty Direct’s findings do point out, however, that labour costs from both franchised and independent garages has actually only risen by 2% across the Capital since last summer – a figure that compares favourably with Thames Valley belt (+10%), Scotland (+19%) and the Midlands (+12%).

It also reports falls recorded in Wales (-5%), Anglia (-8%) and the North West (-7%).

In response to the SMMT’s reaction to its findings, McClure Fisher told AM: “It should be pointed out that the figures quoted refer to claims Warranty Direct have actually paid out on, it is not research. Of course, in some instances a dealer service may be preferable, but it is more repairs than servicing which I would like to focus on. There’s not such a big difference between Norwich and London, for example, that it should be £100 more expensive there – it’s a rip-off.

In our experience the independent network offers a better service in 80-90% of cases and the SMMT simply follow the party line in supporting main dealers.”

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