How far does a car maker’s responsibility go? Should they worry about cars once the warranty expires? How fair are they to the growing group of second and third owners of their cars?
A while ago I bought a second hand freezer for £60. It was three years old, working perfectly well and the price of a new one was about £180. Bargain. Two years later, a red warning light and an ominously damp chicken announced that Something Was Wrong. Inspection revealed that the compressor had given up – a bit unusual for a five year old freezer, but one of those things I suppose. Getting someone to fit a new compressor would be about £100 and really wasn’t worth it, so off we went to the local electrical stores in search of a new one before all the fish fingers melted.
One thing that didn’t occur to me was to get in touch with the manufacturer and demand that they repair the freezer, free of charge. Few people would think that a reasonable expectation. And yet, to many people it doesn’t seem unreasonable for a car. Increasing numbers of us expect car manufacturers to make repairs free of charge to cars that are five years old or more, and which have changed hands maybe several times. Is that reasonable? Well, sometimes it is and sometimes it isn’t. And I don’t just mean that it’s reasonable when I have the problem, but unreasonable when you have it. The fact is that consumers have one set of expectations and car makers have another. The results are mistrust, a worsening reputation for the motor trade as a whole and a widespread, and often unjustified belief that car manufacturers shirk their responsibilities. Much of this bad feeling could be avoided if there was a simple set of guidelines that everyone understood – and some trust and openness from the manufacturers.
With a fridge or a cooker, the maker can give a guarantee of one or three or five years or whatever, but know that at the end of that period he’s off the hook. No more comebacks. If the doors fall off or the machinery starts playing up a day later, tough. They only guaranteed that the thing would carry on working for that long and not a day longer. Of course, you can take out the manufacturer-approved gold-plated peace of mind extended warranty and extend the life forever, or for as long as you remember where you put the paperwork. But if you didn’t, well, it’s a couple of hundred quid or so, which can be a significant jolt to the family finances, but it doesn’t send them into meltdown.
Cars aren’t white goods – even white ones
However, cars remain much more of an outlay, even when they’re six or seven years old. And the price of repairs doesn’t fall with the value of the car – it goes up. The important bits of your motor are put together from ready assembled chunks shipped in from other factories. Engine, gearbox, brakes, suspension, they tend to be made and supplied complete by outside companies. Repairs increasingly mean changing the whole part that was supplied. And because, in the main, dealers set their own price for spare parts, the cost of those spares can be two or three times what the factory paid. In fairness, they have overheads, factories buy them by the thousand and so on. But, the result can be a computer or a pump that might cost the manufacturer, say £300, or 3% of the price of a £10,000 car. If it packs up when the car’s six or seven years old, it might cost twice that from a dealer. Add on labour to fit it and the job might cost £1,000 or more – typically about 30 per cent to 40 per cent of the value of the car. If the part is needed for the MOT – for example the ABS computer or pump – that sort of repair bill can effectively write off the car. That’s when people go looking for someone to pay the bill.
Now, car makers can legitimately argue that you can do the same extended warranty thing for your car. For at least ten years we can all get cover for unexpected repair bills, offered by dealers or any one of many insurers. So, are the car manufacturers off the hook after their warranty runs out as well? If you choose not to pay to extend the warranty, is it just tough luck?
When the owner should pay up and stop grumbing
Well, I’m sure they would love me to say that it is, and for some problems I think that’s right. We can leave aside safety issues, because we are all protected by VOSA, the government’s vehicle safety regulators, for any potentially dangerous faults, whatever the age of the car. For other problems, the fact is that when you make complicated things by the tens of thousands, there will always be some that go wrong. For almost every component on a car, there will be a few examples that will fail during the life of the model. This type of random failure is really just bad luck. If the car is still under warranty, the manufacturer covers the cost of repair, but it is certainly not reasonable to expect them to cover every component for the life of the car. Once the warranty runs out, owners have the opportunity to take out insurance in the form of a mechanical warranty to cover the cost of any unexpected repairs. If owners decide not to pay for the insurance it is quite fair that they should pay for the repair.
However, that does not mean the manufacturers have no responsibility for the car once it’s out of warranty – even when it’s in the hands of the second or subsequent owner. Sadly, most have a huge reluctance to admit that any of their cars might have a fault. In the world of the internet and rapid exchange of information between car owners, this sort of behaviour makes ostriches look far sighted.
Message to manufacturers: cars can go wrong. Get over it.
Every month in this column I write about faults on specific cars that the entire motor trade knows about, faults that a half decent garage will know the moment you describe the symptom. And yet, ask a manufacturer to give you any information about it, or even accept that there is a fault, and nine times out of ten they will deny that any of their cars has ever had such a problem. In many cases they have had so many warranty claims that they have redesigned the part to cure the problem – but still they deny that it exists.
Now, once a fault happens in such large numbers that it becomes well known in the trade, it points to a manufacturing or design problem and it’s perfectly reasonable to argue that the car wasn’t up to the task expected of it. Don’t forget that car makers assume that the car is going to last for much longer than their warranty – if they tried to say it was only designed to last three years, the resale values would drop like a stone, which is something they really don’t want to happen. So, if car makers expect second hand buyers to support the price of their used cars, they should treat us all with openness and honestly. Instead, we enter the murky realm of so called silent recalls, goodwill gestures, ex-gratia payments and a general confusion in which he who shouts loudly or to the right person may get a fair deal, but most of us do not.
From time to time one car maker or another will be dragged in shame to those 21st century versions of the stocks, the consumer programmes. Then, their usual tactic is to express astonishment that the problem exists, thank the programme warmly for highlighting it and give earnest assurances that customers are really important to them. I doubt that many in the audience are convinced.
It’s really high time we settled some of this nonsense and had some sort of code of practice that we can all understand, so here here’s my suggestion for something that’s fair to both sides.
If a component starts to go wrong in significant numbers, manufacturers will produce an improved part or other solution to the problem. The improved part, will, of course, be fitted to new cars and if it is likely to fail in large numbers, it will be fitted to existing cars under warranty. If only a minority of parts are likely to fail, then it’s reasonable for the manufacturer only to replace them when they do go wrong. That, more or less, already happens.
However, the repair should also be made available at a fixed and reasonable cost to owners of cars out of warranty. That generally doesn’t happen and that’s when people feel that the manufacturers are treating them like fools or children. People are reasonable and know they won’t get older cars repaired free of charge. But they do get annoyed when the cost seems disproportionate, or they hear that others paid for much less, or they have to haggle for any concession at all. And it is even more annoying to find that hundreds or even thousands of other cars have had the same fault but the manufacturer has done nothing to put things right. The problem and the availability of a repair should be publicised, at least through the trade, so that we get rid of the secrecy, the denial that there is a problem and the hassle people have of trying to negotiate with an uncooperative dealer or a script led customer service department. Above all, we get rid of the inconsistency and the unfairness.
It can work, really simply as one recent example shows. For years, Ford had a problem with the dashboard on the Mk1 Focus, an otherwise excellent and pretty reliable car. However, when the dash went wrong, some customers were simply charged for the part that actually burnt out – a few tens of pounds. Others were charged for a complete new instrument cluster. Even the price of the instrument cluster varied enormously from dealer to dealer. Sometimes Ford would make a contribution. Sometimes the dealer would foot the bill. More often, the customer was left with the problem. And yet, this was all for a problem that Ford must have known about, from the number of instrument clusters they replaced apart from anything else. The upshot was that for the same problem, owners of the Focus were being charged anything from about £50 to over £300. As I said earlier, the internet makes it very difficult to keep a secret and eventually the big guns of BBC’s Watchdog appeared on the scene, threatening all sorts of bad publicity. Enter someone with some common sense at Ford. Within a week, they announced that anyone with the instrument cluster problem could have it repaired at a Ford dealer for a standard price of £100. Eureka! Everyone is happy. Now you know that if you buy an ageing Focus, the only common problem that you might have is going to cost you £100.
Customers, like businesses, dislike uncertainty. Manufacturers who want to get a reputation for good residual values should learn to treat the owners of ALL their cars with openness and honesty. Ford has set an excellent example, others should follow.
And it shouldn’t take the threat of TV exposure to convince them.