High maintenance

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July 23 2013 at 06:51pm
By Sagie Moodley

Is it just me or were there more people than usual looking to buy a car at the end of last year? During December, I had a few people call me to say they were being clever: if they purchased a car in December and registered it in January, the car would automatically be one year younger. That is a fallacy. The registration papers might say 2013, but the vehicle identification number will show that the vehicle is a 2012 model. Nevertheless, this must be the latest way of boosting cars sales over the holiday period and catching a few suckers.

Having disappointed those of you who bought cars on that basis, I can make sure the rest of you look beyond shape, colour and asking price and consider all the expenses that owning a car involves. It’s a subject close to my heart, because I’ve made a few costly mistakes when I’ve become over-excited about the car in front of me.

Even if a vehicle is second-hand – or “previously owned” as the trade likes to call it – the car is still new to you. So, do you just meekly hand over your hard-earned cash, or do you ask a few relevant questions? (That’s rhetorical, by the way.)

* Is the odometer reading accurate? You want to make sure that the car or bakkie has not made a trip to the Fountain of Youth.

* Is there a service book/service history? The service record doesn’t lie, so you can verify the mileage of the vehicle and check that it was looked after. You can also call the workshop that last serviced the vehicle and ask questions.

* Has the vehicle been in an accident? If the answer is no, ask for it in writing. If yes, ask for the proof of repair. Don’t assume that if a vehicle has been in an accident, it’s a bad buy. If the vehicle has been repaired to factory specifications, it’s fine.

* If the vehicle is less than two or three years old, does it come with a balance of factory warranty? A factory warranty covers all repairs as long as the service plan has been followed to the letter, as set out in the service/maintenance book that comes with the car. You’ll need to have the warranty transferred into your name.

* What after-market service plan can you buy with the vehicle? Always check what components are covered and the extent to which they are covered. For example, if your gearbox fails, the plan may cover only a percentage of the cost, so be careful with after-market warranties. Always ask the salesperson to explain the contract.

* Are the tyres and rims original? This may seem like a silly question, but the answer could really hurt your pocket. Remember that the price of tyres is dependent on their size. And if you have a balance of factory warranty, it won’t apply unless the tyres and rims meet the manufacturer’s specifications. In other words, if they are not original, they should have been fitted or approved by the manufacturer.

The price of new vehicles has always been a bone of contention with me, so I am wary of dealers encouraging you to spend even more money. However, if a service or maintenance plan will give you peace of mind, buying new is worth considering.

At the budget end of the market, you may be offered the option of tailor-making the service or maintenance plan to suit your pocket. Take the base model Kia Picanto, which sells for R107 995. Then you have the “on-road” costs: roadworthy certificate, number plates and registration in your name. They can vary quite dramatically from one dealership to another; Kia Sandton charges R1 950, but some dealerships ask as much as R6 000. Just remember that, whatever the on-road costs are, it’s your right to have an itemised invoice for said charges.

There are seven maintenance plans available for the Kia Picanto, ranging from R6 900 for three years or 45 000 km, to R18 746 for five years or 90 000 km. Then there are four service plan options, starting with R3 602 for three years or 45 000 km and going up to R9 810 for four years or 90 000 km. Note that 20 000 km a year is considered an average mileage (see “Caring for the Kia”, link at the end of this article).

You may have noticed that the maintenance plans are more expensive than the service plans. This is because service plans cover a limited number of parts, such as spark plugs, air filter, oil filter and engine oil, whereas maintenance contracts cover all replaceable parts except tyres (because wear and tear on tyres depends on individual driving habits and is beyond the control of the manufacturer).

The factory warranty on the Kia Picanto lasts for five years or 100 000 km, whichever limit you reach first. Since a factory warranty is only as good as your commitment to following the manufacturer’s service and maintenance schedule, it might be worth buying a maintenance contract to ensure that, having paid upfront, you do look after your car.

However, make sure you can find a plan to suit your budget and driving needs. If the insurance companies can tailor your premiums to suit the kilometres you are likely to clock up, why shouldn’t a car dealership be as flexible?

This brings me to the other end of the market. Let’s take the BMW X5 3.0 diesel. The base price, with VAT, is R707 500. This price includes a BMW Motorplan to the value of R60 000. What if you choose not to have it? Unfortunately, then BMW cannot sell you a vehicle. So you are, in effect, forced to pay R60 000.

The advantage of the Motorplan is that everything on your vehicle is covered for five years or 100 000 km, and you can extend the plan to 120 000 km for an additional R20 000. Can you afford to pay R20 000 for one service? That is the question, because, in effect, that’s all the additional cost will give you.

This got me thinking about why BMW buyers are being locked into spending an extra R60 000. When I probed, I discovered that the Motorplan is unique to the South African market. So are we being taken advantage of? Before I am accused of picking on one brand of vehicle unfairly, let me make it clear that the other big brands in this segment of the market – Mercedes-Benz, Audi and Volvo – all have similar maintenance contracts called by different names and with their own terms and conditions. The Motorplan was a response to poor resale numbers for second-hand BMWs; the thought of expensive maintenance was enough to drive away most prospective buyers.

Mercedes-Benz recently launched a “new, simplified and superior” maintenance plan called PremiumDrive that gives you six years or 100 000 km. Now I’m confused: more years than BMW but the kilometres remain the same … Does this mean that Mercedes owners drive their cars less than BMW drivers, or that the extra year is just for show? Why not 15 years and 100 000 km? And why no choice in the matter?

Think about it: you pay less for a car and you have more choice. You pay six times more for a luxury car and you are handed the maintenance plan the dealership wants you to have regardless of your needs. It makes no financial sense to buy a vehicle from a manufacturer that forces you to do anything – in this case spend R60 000 more than the car is worth.

The theory that cheap cars are cheaper to maintain (cheaper parts, simpler construction, no frills) is hard to dispel, but there is little truth in it. It’s a perception that could cost you dearly at the end of the day. Certain brands, such as VW and Toyota, bought second-hand might be a little cheaper to service than others, but there’s not too much in it. At least availability of spares is not a concern.

The same cannot be said for some of the Chinese vehicles that are making inroads into the local market. Some are serious contenders, such as the GWM range of bakkies, SUVs and cars, and the Chery, which offers first-time buyers the option of a new car at second-hand prices.

But then there is the Geely. This company has pulled out of the country once before, so what’s stopping it from doing so again? Chana has already left. The other point to consider is how many service centres there are to maintain these Chinese products; go for a well-known brand, and there are branches the length and breadth of South Africa.

Do you really want to know what the resale or trade value is likely to be on these brands? “Scary” is the only polite word I can think of. What about the cost of parts? Again, scary. Cheap means exactly that: cheaply made and liable to give you the urge to drive the vehicle into a river.

Another point (just so there is no confusion) is that cars manufactured locally are just as expensive as cars that are fully imported. In certain cases, cars that are manufactured here and exported can be bought more cheaply in the country to which they have been exported than in South Africa. For as long as I have been in the motor industry, no one has been able to provide me with a satisfactory explanation of why this is the case.

(The prices quoted in this article were correct in February 2013.)
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Link.
 
That was very interesting. We have all been brainwashed into buying expensive cars because they come with said maintenance plan. But nothing comes for free. And cars don't really break that much any more, so you really are just lining their pockets.
 
Interesting , makes me rethink my negativity with the "package" structure of Volkswagens. They don't include the service/maintenance plans in their pricing, where all other car brands does. However VW then does give you long list of options of maintenance/service plans to pick from to "bolt on" .

So looking at the BMW/Merc situation in the article, it's probably a good thing to allow for one to pick your service/maintenance plans .
 
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Th author makes some large assumptions besides not fully understanding the role of a motor plan.
 
Madman88 said:
Th author makes some large assumptions besides not fully understanding the role of a motor plan.
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The author is a well respected South African motor industry expert and widely published motor journalist. And a car dealer. As said you're going to need to elaborate on your accusations.
 
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