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The Big Picture: Double whammy from OFT

The OFT has surpassed itself with its latest show of incompetence.

After being pressed last month by AM and the RMIF for an answer to the Supply of New Cars Order issue, where dealers were penalized for selling pre-registered cars within three months, the OFT announced it was relaxing the rules.

It took the best part of nine months for its legal people to reach a decision that said dealers could sell pre-registered cars within three months and still earn bonus. But it took just two further weeks for the OFT to perform a U-turn.

It now says dealers cannot sell pre-registered cars within three months under any circumstance. They could be fined by carmakers and could also, theoretically, face legal action.

Not only do dealers lose out, forced to hold onto stock, consumers are not able to buy a cut-price new car without a long wait.

In a double whammy for retailers, the OFT has boasted that consumers and fleets have saved £120m-170m on the cost of warranty repairs over the past two years by taking cars to independents instead of franchised dealers, as a result of its campaign to highlight differences in labour rates.

The OFT seems desperate to justify its existence by resorting to public spin, but the research is questionable. It lumps together non-approved independents and manufacturer-authorized independents under the same tag. But it should be comparing like-for-like, which means non-approved independents with authorized repairers.

The labour rate is also a simplistic measurement. Authorized repairers or quality independents who repair cars at a higher labour rate to claw back investment in training and equipment should take less time to do the repair.

The overall difference, therefore, should be lower than that publicized. There is also the quality issue, customer service and the impact on residuals of having servicing carried out at an authorized repairer compared to non-authorized.

The OFT should be promoting independents and authorized repairers solely on quality and value, not on who offers the cheapest price. That will only happen when the industry code of practice becomes reality next year.

Until then, the OFT needs to desist from making confusing claims about the industry.

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