Can non-main dealer servicing be a false economy?

During an economic cool off the focus of most buyers’ attention will be on value for money, making cost savings and generally obtaining the best all round package. It is no wonder that, with the inevitably large financial outlay associated with car buying, that these factors now come powerfully into play.
Deciding what is a cost saving and what, is a waste of money, or what is a compromise and what is false economy is clearly a complicated and emotive issue. But, of course, as we so often highlight, getting it wrong can have disastrous financial implications and not to mention provide all manner of domestic strife whilst we attempt to rectify that error.

With the aims of trying to get things right car we need to largely ensure that we choose the “correct” car for the money we are comfortable to pay and that along the way the servicing and maintenance are within what we consider to be an acceptable and manageable expenditure. We also need to make sure we are protected should there be any major unexpected faults and, of course, that we will be reasonably happy with the cars value when we come to sell it.

Taking those general parameters let’s start with choosing the car. We do our research; we set our budget and decide how we are going to fund the purchase. We then compare models, prices and the dealers we want to buy from and finally we complete the purchase. Once we own the car we then need to look at the maintenance of it and what the annual costs of use will be; the fuel, road tax, servicing tyres, insurance and other wear and tear items. This is where it can become interesting, if we have chosen a car which falls into the category of ‘small and economical’ and that has been a deliberate choice, those annual costs would already have been considered. However, with the excitement of negotiating a great deal up front and the thrill of obtaining your next car, there could be some more decisions to be made by the time the car goes back to a garage for its first check up.

Aftersales profits at franchised dealers are down sharply and have been falling for a while and this has been happening for a combination of reasons. For example smaller economical cars require less expensive repairs and servicing, also because of the major investment in technology, equipment and expensive staff training, insisted on by manufacturers, the labour rates in some inner city dealers can be as much as £300 per hour and some of the diagnostic equipment can cost thousands of pounds and, of course, all this has to be paid for.

Although main dealer servicing has improved dramatically since the introduction of block exemption, they still find themselves having to work hard to ensure their customers perception is one of value for money and great service for their hard earned pounds. Indeed this is why why dealers are going the extra mile with things like collection and delivery and having cars valeted whilst in their care, and ultimately many are now happy to negotiate a deal for any up sell work above and beyond the annual service.

On the other hand there are many stand alone service centres who are in a position to compete with the main dealers both in terms of price and service and for the car owner, who is looking at cost savings, it seems an easy choice to make at first.

Is it really though the best choice in the long run to take the non main dealer servicing option and seemingly gamble on the resale value of your car?

If for instance 3 years servicing and maintenance at a franchised dealer would normally cost say £2,000 it could very well be half that at a local non dealer service centre. But without those main dealer stamps in the service book this could potentially lead to the cars value being £1,000 less than it could be.

So is that false economy? Before making that decision ask yourself a question; if you were in the market for a 2-3 year old car from a franchised dealer, would you rather buy one which had been exclusively maintained by a main dealer with all the supporting documentation or one with a full history but carried out by a chain of service centres?

We don’t believe there is a right and wrong answer we do however think that it is worth considering before deciding what course of action you will take regarding the long term implications of what the actual costs could be. With the advantage we have of being able to canvass opinion from our insiders we did a little straw poll based on the following 2 questions;

1.) Does the fact that a 3 year old car have non dealer servicing affect its value? The consensus was it can do and certainly on premium brands but also there is a certain consumer confidence in buying a car which has the correct pedigree so the other car would almost certainly need to be cheaper in our opinion.

2.) Is non main dealer servicing actually cheaper or is there just a general perception that its cheaper? On this our insiders were roughly split straight down the middle. The conclusion is that the better prepared with actual facts and figures you can be (and this won’t always be easy) the more happy you will be with the car and its life with you.

Just because on the face of it something may seem immediately cheaper it may not be in the long run and, as with everything, your own personal circumstances may dictate the answer.

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One Response to Can non-main dealer servicing be a false economy?

  1. Darren Bone July 7, 2011 at 11:09 pm #

    I run and own In5der I really liked your article. People are starting to find out about us and use the dealerships we have on board. We have put ‘a spanner in the works’ regarding the perception that main dealers are more expensive than local fast fit. In fact our main dealers offer significant discounts on vehicles over 3 years old. We will change the face of car servicing forever as we introduce an old business idea to this industry for the 1st time – Dynamic Pricing.

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