warranty* and service plan* or maintenance plan* with your purchase and have familiarised yourself with all these benefits, you may miss one.">

How does a service or maintenance plan mitigate risk?

5 July 2016

There is no better feeling - for car enthusiasts and average Joes alike - than rolling out the dealership in your new wheels. You know your manufacturer included a warranty* and service plan* or maintenance plan* with your purchase and have familiarised yourself with all these benefits, you may miss one.


When choosing your service plan* or maintenance plan*, you were quoted and charged a set fee and then drove off smiling. “Yes, so what?” you ask. This brings us to the massive benefit of mitigating risk.

What risk?

You may have noticed, while doing your monthly grocery shopping or filling up your petrol tank, prices increase in line with the exchange rate, inflation, demand and supply. In most cases, however, you have no control over these unforeseen price hikes and just pay the extra few cents or rands.

As with your groceries and petrol, the prices of spark plugs, brake pads, oil, shock absorbers, globes, and the salary of the friendly Roadside Assistance gentleman also increase in price from year-to-year and sometimes even from month-to-month.

The benefit

With any contractual agreement, details such as the time period of the contract and the pricing cannot be altered after signing - unless otherwise stipulated in the small print or you default on your end of the deal.

It is important to consider that oil is traded in dollars (amongst other items) and that the rand has dropped in value to the US dollar by nearly R5 in just over three years (R7.46 to the US dollar on 1 March 2012 to R12.05 on 20 April 2015).

Because you invested in your plan when you purchased your car, no matter what happens to the international price of oil, the exchange rate or inflation, price increases will not impact on your pocket – for the lifespan of your plan - when taking your car in for a service.

Keep in mind…

Although some cars include a service plan*, maintenance plan*, and extended warranty* in their standard pricing, this is the (expensive) exception rather than the (entry level) rule.

Based on a sample of cars categorised in terms of price, entry level cars (under R130 000 - according to prices from Cars.co.za) such as the Chery QQ3 and the Chevrolet Spark, do not include a service or maintenance plan in the standard purchasing price, these plans come at an optional and additional cost.

As cars go up in price and status, the more comprehensive the service plan*, maintenance plan* and warranty* becomes. High-powered and infamously expensive makes and models such as the BMW M3 Sedan and Mercedes Benz CLA 45 AMG come with comprehensive plans but hit your pocket at over a million rand and R700 000 respectively.

Although the exclusion of comprehensive plans from the purchase price of entry level cars keeps the price low and more affordable, the benefit of investing in a service plan* and / or maintenance plan* not only helps you mitigate risk but may also increase the trade in value of your car - making you far more budget-wise in the long run.

* All warranties (original or extended), service plans and maintenance plans differ in terms of features, benefits and, terms and conditions. This blog is for illustration purposes only.


This article is intended to be used and must be used for informational purposes only. We do not make any warranties about the completeness, reliability and accuracy of this information. Any action you take upon the information in this article is strictly at your own risk. We will not be liable for any losses and/or damages in connection with the use of the information contained in this article.

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