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New rules take the sting out of car servicing costs

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At the end of 2017 the Competition Commission of Singapore announced that it would prevent car dealers from locking owners into in-house servicing by voiding the warranties of vehicles that have been serviced elsewhere.

Consumer researchers, ValuePenguin, looked into what the impact would be for Singapore car owners.

As the majority of new car warranties expire after three years, the benefits of the change would flow mainly to owners of newer cars – approximately 30% of cars in Singapore are less than three years old at the end of 2017.

car population sg

Research showed that new car buyers could see maintenance and repair costs drop by as much as 50% to 70%. The total cost of regular maintenance – replacing engine oil, oil filter, sump plug gasket, or replacing air filters, brake pads and engine coolant – at Toyota and Honda authorized workshops should add up to $3,600 to $3,700 over a five-year period. An independent workshop should be able to do the same work for $2,300, a 35% saving.

ValuePenguin notes that more complicated repairs or major work may be better done at authorized workshops, as specific replacement parts may be necessary.

maintenance cost

There are flow-on effects too. While the 30% of owners with cars less than three years old stand to save as much as $500 a year due to the new provisions, the Competition Commission’s chief executive, Mr Toh Han Li, stated that “the removal of the warranty restrictions will facilitate a more competitive market for car repairs and servicing.” In other words, as workshops compete on a more level playing field, consumers stand to benefit.

There are some caveats, however. As newer cars tend to be more technologically advanced, independent workshops will have to invest more in training and equipment to handle potentially more complex repairs. And authorized agents are unlikely to cover damage caused by a careless independent agent under the terms of their warranty.

This all bodes well for Budget Direct Insurance customers who can select the Budget Direct Insurance Authorised Workshop option instead of the more expensive Own Workshop option without fear of voiding their warranties.

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