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

Tim Heavisides, group CEO of Car Care Plan and a non-executive director of Motor Codes, said: “The new code embraces the key issues of providing consumer peace of mind, with policy terms that are easy to digest and not hidden behind industry jargon.”

Referring to the Autoquake episode, he added: “Customers bought policies in good faith, with protection that was thought to be ring-fenced. Provision in the new code for checks on the financial standing of retailers issuing non-insured products is a sensible move to mitigate risk.”


What is the Motor Codes’ warranty code?

The Motor Industry Code of Practice for Vehicle Warranty Products confirms promises made by subscribing warranty administrators. With the approval of the Trading

Standards Institute, it sets out standards that subscribers must comply with relating to advertising, point-of-sale obligations, clarity of information, complaints, dispute resolution and disciplinary action.

Products covered by the code include mechanical breakdown insurance, financial shortfall products such as GAP and RTI, roadside assistance, MoT insurance, tyre insurance and key insurance.

Subscribers manage the registration, claims handling and aftersales on behalf of vehicle manufacturers and dealers, and are obliged to ensure their own staff and retailers are aware of their legal responsibilities as well as their responsibilities under the code.

Dealers selling warranties for providers subscribed to the code must take reasonable steps to ensure their customers understand the products offered, with advice given in a helpful, patient and appropriate manner, and particular care taken when dealing with vulnerable or disadvantaged customers.

During the sales process, where any covered products are provided free with the vehicle, the dealer must provide the buyer with appropriate information on the product and cover before the vehicle sale agreement is made.

Appropriate information includes the period and level of cover, the limit of sums covered, any mileage restrictions, the price of each product and the total cost, the customer’s right to cancel within a minimum of 14 days from receiving the product literature, and whether the product is a contract of insurance or a service contract or guarantee.

A consumer who feels dissatisfied with a provider’s performance under the code is able to take their grievance to the Code Advisory and Conciliation Service.


Who has subscribed to the code?

Subscribers include The Warranty Group, Global Insurance Management, Warranty Direct, Car Care Plan, MB&G, Autoprotect, Mondial Assistance, The Warranty Co and Motorway Direct.

Subscribers are subject to regular compliance checks by Motor Codes, and scrutiny by ICAP, which can impose sanctions for non-compliance, including compulsory arbitration and expulsion.

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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