Motor industry welcomes OFT report

17 December 2003 #SMMT News

The Office of Fair Trading (OFT) today confirmed that new car warranties are operating in a fair and honest way, offering significant value and peace of mind to consumers.

Following a six month investigation into warranties across a range of consumer products, the OFT report recognised the importance the free policies offered to new car buyers protecting them against manufacturing faults.

The investigation found that although about 50 per cent of car manufacturers’ warranties allow servicing to be carried out by independent repairers, over two thirds of new car buyers assumed otherwise. Warranty policies that recommend the use of franchised repairers are not automatically invalidated if the service is correctly undertaken elsewhere. The Society of Motor Manufacturers and Traders (SMMT) is continuing work with the OFT to clarify the details in a New Car Code of Practice to be launched next year.

‘SMMT fully welcomes the findings of the investigation and is keen to work with the OFT, to ensure its recommendations are met. Changes to Block Exemption will see an increasing number of authorised repairers appearing across the country, giving consumers a greater choice of service and repair sites. Combined with the New Car Code of Practice, the motor industry remains committed to offering consumers high value warranties for what is fundamentally a complex mechanical product needing regular specialist servicing and maintenance’, commented SMMT chief executive Christopher Macgowan.

The OFT investigated new car warranties following changes to its powers under the Enterprise Act 2003 giving them the authority to approve consumer codes.

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