What Is Capped Price Servicing?

The Truth About Capped Price Servicing

Buying a new car in Australia is an outstanding achievement and investment in your life. It doesn't matter the model of the vehicle you purchase; you will feel that you have made a great stride in your life. However, it's also worth noting that several things come with buying a car, including servicing.

It is imperative for you to know that you need to service and maintain your vehicle over its lifetime. It's only by performing regular servicing and maintenance that you can guarantee your car's longevity. Therefore, you will have extra expenses beyond the amount you spend buying the car.

Car manufacturers in Australia have introduced capped prices on servicing deals when purchasing used and new vehicles with this knowledge. This is what is referred to as capped price servicing. So, what is capped price servicing? Continue reading the article to know more.

What Is Capped Price Servicing?

As the name suggests, capped price servicing refers to the package placing a specific limit on the money you can spend servicing your car at your dealer's service shop. With competition becoming more intense in the car market, manufacturers have introduced capped price servicing programs as an incentive to attract more buyers. The incentive also helps gain buyers' confidence when purchasing cars from them.

You get a price list for all scheduled servicing when you buy the car with capped price servicing. However, you are expected to adhere to the set servicing intervals that mostly go up to twelve months. Another thing to note is that the price of general car services remains at a certain level. This is the case even if more components or work are required to complete the car service.

Features Of A Capped Price Servicing Package

As mentioned above, capped price servicing programs usually cover general car services. This includes general car services such as oil filter and oil change, pollen filter and brake fluid replacement, and the labour costs involved in carrying out safety diagnoses and inspections.

The package also covers scheduled major servicing such as replacements of spark plugs, brake components, and specific drive belts. Before buying a plug-in hybrid or any other car model, you need to check out your manufacturer's capped price servicing policy to find out what it covers in their major and minor packages.

Services Not Included In The Package

One of the things to note is that manufacturers don't offer the same capped price servicing package. So, each manufacturer offers a unique package. Most car manufacturers don't cover significant replacements, tear and wear in their capped price servicing agreements.

The package does not include car parts that usually degrade with time, including light bulbs, washer blades, engine parts, tyres, and belts. As a result, you have to pay if you want to have these parts replaced. To be sure of what is covered in a package and what is not, it's good to get in touch with your car manufacturer to get the complete list.

The Amount Saved With Capped Price Servicing

Before car manufacturers introduced capped price servicing programs to Australia, car owners who never had the knowledge or time to shop around dealerships paid excess for their car servicing. One of the main benefits of this program is that you get high-level transparency on offer when doing the scheduled services. This, in turn, allows you to effectively budget for these car services and save a lot of money for the time you service your car because of the price limitations set by the manufacturers.

Why Do Capped Price Servicing Offers Differ?

The major reason the prices differ is that various schemes incorporate different car parts and services. It's also worth noting that cars in the same brand's line are different in their technical details leading to the difference in service costs. The price of the service can also be reduced to a lesser and greater degree by the dealer network or brand to attract buyers.

You can also incorporate part of the capped price program's cost into the car's purchase price. Although it isn't a universal rule, in most cases, the higher the purchase price of your vehicle, the higher the service cost.

Servicing Cost After Capped Price Period Expiry

Things might get murkier when the capped price period ends since you have to pay all the service costs. Once the period is over, your dealer determines the amount to charge you for all your car services. As a result, you might find a massive difference if you have the car serviced by different car dealers.

It's also worth noting you may require significant services after capped price limit. Therefore, you need to check for online calculators to ensure you don't get shocks when seeking post-capped price service. It's also advisable to ask your car dealer for the cost before taking your car for the required services.

Determine The Cost Of Capped Price Servicing

After you close the deal on buying your new car, you are given the keys. You are also provided with an after sales specialist to speak to you and inform you of the various points to keep in mind. This is when you are given information about capped price servicing.

You can also ask the specialist all the questions regarding their capped price servicing programs and the costs involved. Some dealers post the price of the capped price servicing in the showroom or website where you find the price calculator. It's good to note that the price also differs for specific car services and various brands. The total amount you will pay also depends on the warranty coverage duration of your car.

The Shortcomings Of Capped Price Servicing

Strict terms and conditions

One of the shortcomings of this program is that you have to adhere to specific terms and conditions, failure to which you end up paying for the car services provided. It is also possible to buy a car brand that does not indicate the terms and conditions to get the capped price servicing. This might work to the advantage of your car manufacturer and your disadvantage since you might go against the terms and conditions unknowingly.

Most programs run for short durations

Most capped price servicing programs run for only a short duration. In most cases, the programs run for the duration of the car warranty. Therefore, it's good to check for a car manufacturer that offers the program beyond your car warranty period.

Limited car services provided

Some capped price servicing programs don't incorporate unexpected replacement of consumable car components. In addition, your company might also adjust the price depending on labour and the car parts' cost. As such, it is vital to ensure that your car manufacturer does not change the price structure provided when you purchase your car.

Your car manufacturer should also ensure you know the amount that the specific services will cost. You also have to note that your driving style and terrain can also determine the service costs.

Subject to price changes

Your car manufacturer could change parts, labour, and fluids costs. Therefore, you will need to be aware of the variables and market price to avoid shock when you find that the price has gone up when you have your car serviced.

Types Of Capped Price Servicing Schemes

You need to know of the three capped price servicing schemes before purchasing any car, be it an electric car or any other model in Australia. Here are the three schemes:

Set pricing scheme

This is a scheme in which you are made aware of the amount you are paying at each scheduled visit to your dealership centre. It runs for a shorter period than the other two schemes that we will deal with below. It incorporates all the necessary things to be completed at the dealership service.

In the long run, this is the best deal for your car. However, you should also note that after the scheme period ends, you will go back to regular pricing that may be more than what you are used to paying under the scheme.

Menu pricing scheme

In the menu pricing scheme, your car brand manufacturers can set higher or lower prices depending on the variable that surrounds your car's accessories and parts. For instance, if you plan to top up your fluids during the next car service, but the transmission fluid price changes, your car manufacturer can change the price on the menu to showcase this difference.

In most cases, these changes lead to an increment in price. These changes make it hard to budget effectively for your car services, unlike the set pricing scheme that has constant pricing.

Prepaid pricing scheme

The prepaid scheme involves paying a specified amount upfront that can be written on your car price. You may make an upfront payment that allows you to drive to your dealership service centre any time you want. The main drawback of this scheme is that it locks you to a particular centre.

It is good to know that some car manufacturers incorporate menu and set price schemes, while others only provide a single one. However, the great thing is that all the schemes cover parts and labour costs needed for the regular servicing of your car. Often, they don't incorporate batteries and tyres replacements, fixing aftermarket accessories or parts, and damages resulting from accidents.

Entering A Capped Price Servicing Agreement

To guarantee that you get the very best from the capped price servicing program your car manufacturer provides, here are some of the pertinent questions you need to ask:

• Is the price fixed, or can it go up?

• Does the program incorporate a complete safety check, or will it be an extra charge for the car service?

• Will additional services and parts be needed to maintain your vehicle's new warranty, and what is the price?

• Is the capped price servicing cost incorporated into the buying price of the car?

• Is the price of the program inclusive of all lubricants and parts?

• Are there penalties if you miss a scheduled car service?

Get The Best Capped Price Servicing Package

When buying a car in Australia, you need to ensure that you get the best deal for capped price servicing programs. Therefore, you have to look for the best car manufacturer or dealer providing the best-capped price servicing program. Take your time to research the different car manufacturers or dealers to make an informed choice.

Ensure you read the agreement so that you can understand what it entails and know what you are getting into. That said, should you need more information, you can reach out to a car buying or selling company so they can assist you with the process.