Capped Price Servicing: What is it & How Does it Work?

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Modern cars tend to last an awfully long time compared with their forebears. But that’s on one very important condition: That the vehicle has been serviced properly. While older cars with their slacker tolerances and less-specific engineering would sometimes cope with a missed service or two, the modern car with its high-tech specification, tiny oilways, much higher level of tune and exotic materials simply won’t tolerate a skipped service.

And there’s your problem, because servicing a modern car can be a very expensive business, even in terms of the regular, scheduled maintenance that all cars need. You wouldn’t be, for instance, the first car owner that has almost passed out when handed the bill for a regular service.

There’s no way around this in some cases, but if you’re buying a brand-new car, there is a way you might be able to contain the costs of servicing the car. And avoid that shock of seeing such a big number with a dollar-sign in front of it. Well, for the first handful of years of your ownership anyway.

The magic bullet is called capped or fixed-price servicing (the two terms are interchangeable). Capped-price servicing isn’t offered by all makes (although most do these days) or all models within a range, but if it is offered when you buy the car, it’s worth considering.

But what is capped-price servicing in the first place? Basically, it allows you to know the cost of each service now, not when the services are actually due. Most companies offer fixed-price car servicing for the first few years of the car’s life, usually three, four or five years. Sometimes capped-price servicing will be offered for the warranty period, sometimes for the life of the car.

The advantages, of course, include the fact that you can budget for each service, knowing what it will cost even five years out from the actual event. The other bonus is that you get locked in to factory mechanics using factory tools at a factory dealership. You’ll also be in line for running changes to software and other updates as a result of the using a dealership. And, of course, your warranty will be safe from disputes over whether the car was maintained correctly.

Sometimes you can pay for the service regime in advance, sometimes you can pay as you go having signed up. In other cases, you might be able to include the servicing contract into the lease repayments meaning no dipping into your pocket down the road.

So what’s the catch? Well, capped-price servicing deals are a classic case of Read The Fine Print. See, a capped-price deal is actually a contract and, as with any contract, there are details that might not be apparent, but which you really need to be aware of. It’s also true that the question of what does capped price servicing mean, varies from brand to brand.

Those start with the inevitable exclusions. Some servicing contracts include everything involved in the service. Great. But others may not. Typical exclusions might involve replacement fluid (of which there will be many) belts and hoses and one-off replacements like timing belts.

Some contracts will include wearing parts such as brake pads, but most won’t, nor will they cover things like clutch wear and tyre wear. The best advice is to make sure you know exactly what you’re singing up for and then confirm the cost of each service as it comes around.

Kia was caught out by the ACCC back in 2015 when it took the opportunity to `amend’ its fixed-price schedule no less than four times. The ACCC found this to be misleading and Kia was forced to repay the extra money it had charged over and above the original contract prices.

You also need to stick to the rules. That is, you need to observe the service intervals (which usually include a kilometre and time interval, which ever comes first) and have the car maintained in a timely way.

Like we said, most manufacturers offer a capped-price service deal on most of their models. One of the most interesting was Holden Capped Price Servicing which was announced back in 2015 as a lifetime deal. What was novel about it was that it extended back to any Holden built from 1948 onwards (the very first Holden, the FX). Unfortunately, once Holden had closed its network, the deal was withdrawn last year in the face of parts-supply problems.

Ford capped price servicing is also available and, since the Ford network still exists despite local manufacturing ending in 2016, it’s still a valid arrangement. It operates as an online calculator that allows owners of Ford going back to 2007 to work out the maximum cost of their next service. Not a conventional contract, it’s still a popular way for owners to shop a decent price, and it’s not the only maker to offer an ad hoc, jump-in-whenever service pricing arrangement.

Nissan capped price servicing is also a thing with all new Nissans falling under the Service Certainty program. Basically, that provides six years of fixed-price servicing. Nissan points out that the program does not cover brake fluid.

Hyundai’s offer is a lifetime one and you can pre-pay or pay off each service in instalments up to the first five years of servicing. Stablemate Kia also offers a service deal that covers its cars for the full term of its factory warranty; seven years.

Toyota was a leader in fixed-price servicing in this country and operates a system that caps servicing costs for the first three or four years of ownership. Mazda operates a lifetime deal where you go online to find the cost of your next scheduled service. Subaru offers fixed-price servicing for the first three years or 75,000km while Volkswagen covers you for the first six years of ownership.

Again, all these schemes vary in their quality according to the cost of each service, the total cost of all ancillaries and, of course, the frequency of servicing involved. Toyota, for instance still quotes a 10,000km service interval for some of its models, so you need to take that into account, too.

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