Prospective car owners beware: besides the costs of fuel and insurance, brace yourselves for the oncoming bills in vehicle maintenance and repairs. In a survey on the warranty plans of new cars from 22 brands, the Consumer Council has found highly restrictive terms and conditions in the majority of these warranties, under which new car owners are required to deliver their vehicles for maintenance inspection as scheduled at designated repair centres; and should they choose not to follow through the inspection results for repair or spare part replacement, or use other repair centres, their car warranties may be voided. Further, the repair charges and price quotations were lacking in transparency, with less than 30% of the original manufacturers disclosing warranty details online. Improvement is clearly needed in this industry practice.
In addition, the Council’s review of consumer protection legislation overseas in relation to the sales and repair of motor cars has shown that in many countries, should the vehicle experience any malfunction during the warranty period, free repair or spare parts replacement is required to be provided. There is, however, no similar legislation in Hong Kong. Price of a new car can easily start from hundreds of thousands or over a million dollars in addition to the yearly burden of high inspection and repair costs, yet when car owners are faced with such harsh restrictive warranty conditions, their protection is seriously lagging behind. Prospective car owners are reminded to carefully read the warranty and to clearly understand its scope and restrictions to stay away from surprises.
To collect inputs on new vehicle warranty and repair plans, the Council has earlier sent to the dealers of 30 brands of private vehicles a survey questionnaire; 22 car brands responded accordingly. In most cases, the validity period of the warranty is based on time span (2 to 5 years) or travel mileage (60,000 km to 100,000 km), whichever comes first.
Nearly all of the car brands were found to include mandatory warranty requirements that car owners must deliver their vehicles for inspection at designated repair centres, failing which the warranties of 7 car brands would automatically cease to be effective while the remainder 14 would terminate the warranty for only the parts or spare parts serviced by a third party. Further, if the car owners fail to abide by the inspection suggestions for repairs or spare part replacement, the warranties of 8 car brands would be rendered totally invalid; 5 others would limit to only problem areas referred in the inspection report to be no longer covered in the warranty. The Council is of the view that if suggestions for repairs do not involve the safety of the vehicle, for example, the dust filter or shock absorber, car dealers have no reasons to require compulsory repairs of all items, that serves only to add to the burden of the consumers.
Consumers should be wary of the considerable expenses that entail after the car purchase. 16 car brands required car inspection to be carried out once every 6 months; 5 others at least once every year while another 1 car brand once every 4 months. Such inspections would cost car owners from a total of $2,980 to $25,000 a year, let alone other common expenses such as fuel oil, motor oil, filter, rubber belt and windshield wiper which are not covered in the warranty. Car owners also have to be aware that some car brands varied in their warranty periods covering components like the battery, air-con, sound system, etc.
The Council further pointed out the need to enhance the transparency of new vehicle warranty information, and repair price quotations and estimates. In the survey, only 2 brands offered on their own initiative written price quotations in detail prior to repairs; 9 others indicated that generally they would give oral quotations over the phone but would provide written estimates upon consumer requests. In the event the repair costs are likely to exceed the original estimates, 12 car brands would undertake to notify their customers for consent beforehand. But should the final repair costs still exceed the estimates, only 5 brands would charge according to the original final estimates agreed upon with the customers. Consumers are advised to take the initiative to obtain a written price quotation prior to the start of car repair, clearly listing out the expenses of the various items, in order to avoid disputes afterwards.
The survey also found inadequate information transparency in respect of new car warranty. Among the websites of 30 car brands, the Council found only 8 (27%) to provide detailed warranty information online; most also did not disclose the maintenance repair costs of various items. Improvement is called for in this area.
Currently in Europe and the US there is legislation to safeguard the consumers’ freedom of choice in car repair service. For instance, the EU stipulated that car manufacturers must not use their warranty to bind or restrict consumers to designated car repair service, in order to ensure that independent operators have easy, and restriction-free access to information on the repair and maintenance of vehicles. Under the US legislation, car manufacturers/dealers are prohibited to terminate the warranty or refuse to provide maintenance on the grounds the car owners have used car repair service not of the original manufacturers; violation of the law is an offence.
As with other products, new cars can possess manufacture defects or malfunction due to faulty production techniques that could incur unreasonable repair costs to the consumers, or even lead to death and traffic safety risks. The Council has found in the EU, Australia, the US, Singapore and in the mainland, legislation requiring car dealers to provide product quality guarantee of new cars, for instance, within a two-year time span or a certain mileage from the purchase date, the dealers should offer free repairs or refunds. There is however no such legislation existing in Hong Kong. The Council, therefore, proposes related government departments to take reference of overseas legislation in a further effort to safeguard consumers.
Consumers choosing car repair service are advised to take heed of the following:
- If choosing car repair centres not designated by the dealers or independent garages for repairs, consider first and foremost to ensure they are of a good reputation;
- Read carefully the vehicle “warranty booklet” to fully understand the scope of the warranty, the restrictions and maintenance requirements to avoid the budget running out of hands;
- Ask the repair operator to list out in detail each and every job (and spare parts to be replaced) in a written estimate; agree to the start of the repair only if they all fully meet with your approval;
- Independent garages may charge a lower level of fees; besides price comparison always choose one with good reliability and reputation. Consider also garages which have joined the “Voluntary Registration Scheme for Vehicle Maintenance Workshops” for repair;
- Before making the repairs, the car owners could have the right to check with the technician the damaged parts and try to understand the nature of the problem. After making the repairs, check on the spare part replacements and to identify the condition of the car.
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