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Customers save £120m on warranty costs

Motor trade bodies have welcomed an independent study which shows that consumers are enjoying freedom of choice in the car service sector.

However, they are concerned that the franchised sector is still seen as over-charging.

The Europe Economics report, prepared for the Office of Fair Trading, concludes that car owners and fleets have saved between £120m and £170m since an OFT market study in 2003 led carmakers to remove restrictions on servicing in new car warranty contracts.

However, the study peddles the view that customers taking cars to franchised dealer garages are paying more than if they went to independent garages: “These owners overpay for servicing by £40m to £90m per year.”

Sue Robinson, director of the National Franchised Dealers Association at the RMIF, says: “This seems to base servicing value entirely on cost and doesn’t account for the extra overheads that franchised dealers have to cover, such as updated training and equipment.”

An SMMT spokesman adds: “When people look at what they get from franchised servicing, a lot are happy with the level of service they receive.”

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