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What car dealers need to know about the Motor Codes warranty code

Subscribers found to be in serious breach of the code can be suspended, with expulsion the ultimate penalty. ICAP will publish data on these cases annually, starting in 2015.

“Through self-regulation, we will commit to ensuring that the consumer is not misled either on the sales process or the terms of cover, backed by an effective complaints process and conciliation service,” said McAllister.

“If any customer is frustrated, giving up, or is thinking of ‘going legal’, there is a freefone number where we can offer guidance.”


Why some warranty providers have not signed up to the code

While aftermarket warranty providers have expressed support for the revised Motor Codes in principle, not all have signed up.  

David Parrondo, deputy managing director of Mapfre, said: “We’ve studied the code in detail and our assessment is that we already do all of the things within it as standard. The code is very much in line with overall FCA principles, particularly around ‘treating customers fairly’, which is already the benchmark for regulated insurance companies.

“Whilst we don’t currently subscribe to the code, we support any initiative that is designed to raise standards and improve consumer outcomes and it is something we will consider further.”

Sean Kent, account director for the RAC at The Warranty Group, took a similar line, commenting:  “While we sympathise and support what Motor Codes is trying to achieve, as the licence holders of the RAC brand name in the dealer space, we have worked together with the RAC to create our own network.

“Setting high standards for warranties and other key aspects of vehicle preparation, we believe the credibility and trust that used car buyers place in the RAC name overrides any third-party initiative by some distance. Customers know that the RAC would only put its name to something that was highly credible and the standards we have set with innovations such as our RAC BuySure used car programme are, we believe, market-leading.”

Two companies that have signed up are WMS and Car Care Plan.

“Anything that promotes greater professionalism and improved ethical behaviour and creates confidence for customer and dealer has to be a good thing,” said WMS

business development director Eric Stone. “It’s imperative to offer clear and concise terms of cover.”

He added that while insured products were preferable, there were dealers who opted for non-insured because “it takes away the hassle of (FCA) regulation, with all the paperwork needed for compliance”.

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  • David Telling - 10/11/2014 21:43

    What's the problem? When Rover folded our dealer group paid for all outstanding warranty costs for vehicles sold by our Dealership