Changes to car sales and services in SA effective from July

When it comes to buying a car, there are many things to factor into the complete price, such as the warranty, service plan and of course the cost of parts.

The Competition Commission has published guidelines for South Africa’s automotive aftermarket aiming to promote greater competition regarding motoring issues such as manufacturing, repairs, and insurance. The Commission said that these guidelines will be effective from July 1, 2021.

Here are the changes included in the guidelines below and how they will be impacting the motoring industry and drivers:

Bundling

When consumers buy a new vehicle in South Africa, the maintenance plan and/or service plan are included in the total purchase price of the vehicle. The Commission has made it known that bundling makes the purchasing of these plans easier for customers who would otherwise seek these out separately from an outside third party.

It will now be compulsory for dealers to elaborate to customers the price of the vehicle and the price of the value-added products separately before the sale.

Transfer of maintenance and service plans

The manufacturer and other providers must transfer maintenance and/or service plans to a replacement vehicle in the event where the original vehicle is written off by the insurer.

Where there is no replacement vehicle after a write-off or it is not feasible to transfer a maintenance plan and/or a service plan to a replacement vehicle, the consumer shall be afforded the right to cancel the value-added contract and/or receive a refund of the value of the balance of the product.

This prevents the consumer from being out of pocket as they cannot benefit from a plan while having no vehicle.

Parts

Some issues have been noted where it was difficult for independent repairs workshops to obtain approved/original spare parts from the manufacturers. This deprives the customers of shopping around and in some cases getting a cheaper deal on their repair costs.

The commission said that the manufacturer and approved dealers should make original parts available to independent mechanics to perform services, maintenance or repair work.

Sensitive information and price co-ordination

The commission has a great concern about the exchange of commercially sensitive information between sellers that sell new vehicles and products of competing manufacturers.

The guidelines state that dealers that sell products of competing manufacturers must ensure that no commercially sensitive information (including information stored in the cloud) is provided or shared. Approved dealers that sell new motor vehicles and products of competing manufacturers must also ensure that they do not engage in the prices of competing motor vehicles and products must be determined by different individuals within the dealership.

Picture: Women On Wheels gallery