South African motorists cheated out of service plans: report

Motor dealerships around South Africa are reporting undisclosed numbers of cars as sold, even though they have not left the showroom floor.

This is according to the latest Power Report in the Sunday Times.

The dodgy practice causes motorists to lose months off their new car’s service plan, since motor plans for new cars are activated as soon as a sale is reported.

Buyers usually don’t realise this has happened until they are asked to pay for a service that should have been free.

“Ghost sales” happen in the car industry because of pressure on car dealers to meet monthly sales targets in exchange for incentives from manufacturers.

The Power Report found that this practice occurs around the world.

Despite being an international phenomenon, the industry ombudsman and National Automobile Dealers’ Association said this is not a practice they condone or support.

“Meetings are being planned to take this matter up at the highest level,” said local ombudsman Johan van Vreden.

The full report is in the Sunday Times of 14 February 2016.

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