Take control of your motor plan

5 July 2016

When it comes to understanding motor plans, many South African motorists are a bit clueless. We look at why and how you can stay on track and avoid unnecessary expenses.


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There are approximately 10m cars on South Africa’s roads according to the National Association of Automobile Manufacturers of SA (NAAMSA).

But according to a recent consumer survey by MotorHappy – a subsidiary of the Imperial Group – nearly 90% of the 900 South African motorists surveyed are ill-informed about motor products like service plans, maintenance plans and warranties.

According to MotorHappy managing director, Kerry Cassel, the lack of knowledge was not limited to any single demographic, but was present across “all age groups, provinces and genders”.

Astonishingly, 85% of the respondents aged 20 to over 60 rate their overall knowledge of their motoring plans as two out of 10, while an additional 4% rate their knowledge a one out of 10, according to the MotorHappy survey released last year.

The survey also found that 38% don’t know which plan they have, while 50% are unsure of what their plan includes. And 62% of respondents are unsure of the start and end dates of their plan.

Motoring, maintenance and warranties

Most new vehicles are sold with some sort of motoring plan built into the metal. Many luxury cars boast full maintenance plans while middle-segment vehicles often sport service plans, says WesBank’s head of brand and communication, Rudolf Mahoney.

But apart from warranty, a service or maintenance plan is more often than not an optional extra for buyers of new entry-level vehicles, with the institution financing the vehicle often financing the additional cost of the plan.

Cassel estimates that around 80% of new vehicles are sold with a motoring plan. And in the used-car segment the historical tendency of warranties has shifted in the past five years to service and maintenance plans, she says.

Getting up to speed

Unlike motor plans built into the vehicle price, stand-alone motor plans, like those from Bidvest or Liquid Capital, sometimes have a pro-rata refund policy.

But whether built-in or stand-alone, motorists need to be up to speed on their plan’s terms and conditions. Not servicing a car within the required time period or servicing at an unapproved workshop could invalidate both the service plan and maintenance plan with owners liable for future costs.

Even extending a motor plan requires a full service history; all stipulations consumers need to be aware of if they want to get the most out of their motor plans.

“While these complex products are often viewed as a grudge purchase, it is vital for motorists to know the details of their car servicing and maintenance requirements as well as inclusions and timelines attached to the motoring plan they have or are paying for,” Cassel said following the release of the data. 

Sticking with the programme

By ensuring that a vehicle is properly maintained, which a motoring plan is crafted for, there is an added benefit for motorists: Safety. “Consumers who don’t have a service, warranty, or maintenance plan find it very difficult to maintain their vehicles correctly,” according to Cassel.

Cost versus benefit will always play a part in plan choice. And while a service plan may appear to be a cost-effective choice, the maintenance plan is more often than not the go-to option thanks to the additional benefits that this plan provides.

This article originally appeared on AutoDealer - http://www.fin24.com/Finweek/Personal-finance/take-control-of-your-motor-plan-20160128

Disclaimer

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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