My girlfriend purchased (following some discussion on this board) a Mercedes A-Class A170 T reg with 43k on the clock, from the Lexus dealer in Newcastle, as one of their "Approved Used Cars". She picked it up last Thursday, and on Friday lunchtime the power steering promptly failed (no it wasn't the fuse or the belt driving the PS pump)
She had bought a 3 year warranty from the dealer (from "Warranty Holdings", who I now know much more about having done some googling!), and after phoning the dealer he suggested taking the car down to our local Mercedes dealer to get the power steering fixed. She had been told before being sold the warranty by the dealer that the warranty covered repairs at a main dealer.
However upon phoning the warranty people they said they would only cover labour up to 25 pounds/hour, therefore we would have to pay the labour excess if the car was repaired at a main dealer.
We have now returned the car to Lexus Newcastle to fix the power steering problem, and to express our dissatisfaction at being mis-sold a mickey mouse warranty, because:
- 25/hr is the kind of labour rate you find at a back-street garage who don't have the electronic gizmos to properly fix modern cars
- the warranty expects you to pay for main dealer servicing in order to maintain coverage, but won't pay for main dealer warranty repairs
- the selling dealer is a main dealer, therefore you might be expected to believe that a warranty you are sold by a main dealer would cover repairs at a main dealer
Do you think this is unreasonable expectations?
mike
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Forgive me for asking a basic question but was the restriction to £25ph mentioned in the contract or any supporting material?
If so then you've had it and need to read contracts more closely before signing them.
If not then I think they are behaving unreasonably and I would get a solicitor on to them pronto. Most of the time these insurance companies prevaricate to deter people from making claims but the threat of legal action usually cuts through the b*******.
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The warranty documentation said that Warranty Holdings would only pay up to their "national labour rate" or somesuch. I did not call the warranty company to find out what that was, as I relied on the dealers assertion that we could get warranty work done at a main dealer.
...well we can, but only if we want to pay the difference between 25/hr (Warranty Holdings rate) and 50-60 or so an hour (Mercedes rates)
mike
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I have to say that reading the small print on some of these warranities being offered by used cars sales people, they appear to be not worth the paper they are written on. For example, if a component busts, i.e cambelt, the warranty company will only pay for the damaged item and not any subsequent damaged caused by the failure of that component, therfore they will pay the £2.50 or whatever for the cam belt and the £25 labour costs, but you have to find the next few hudred pounds for the engine rebuild.
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I also was not impressed to discover the £25/hour limit, nor with
their approved local garage, so I went to my trusted VW dealer(there are such people!), prepared to pay the (significant) difference. 'We don't have problems with Warranty Holdings' they said, to my suprise, and I wasn't charged anything...
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Did the dealer not give any guarantee itself?
I would expect between 1 and 3 months major components to be included in the sale price.
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If you want to cause the warranty company a small amount of trouble then I would find out how many of the local garages actually charge within their pricing. If none do then I would consider reporting them to the Office of Fair Trading as their cutoff labour rate is unreasonable. Either that or just get your money back for the warranty as you consider it worthless.
I would strongly suggest you talk to trading standards as they can tell you what recourse you have under the sales of goods and services act and whether a car of this mileage, age and price should have had a power steering pump fail so soon so the dealer could have to repair it FOC anyway.
Dealers often sell warranties in order to avoid their obligations but it is also up to the buyer to read the small print in the warranty book. If she had read it would she have said no to the warranty? I had a similar warranty with the car I bought but I deliberately took it back to the garage that issued the warranty so they did all the repairs and had to cover the costs themselves. They would only pay up to £25 /hour and at a vat registered garage (dream on!) It was free with the car and had I paid money for it I would have been irritated at the exclusions.
teabelly
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Take it back to the dealer who sold it to you and demand that they fix it. Quote the sale of goods act.
Andrew
Regards
Andrew
www.hispecgolfs.co.uk
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You have at least 28 days or 1000 miles (implied by "reasonable" miles) I beleive.
I was going to buy a warranty when I bought my car. "Gold Standard" or some such thing.
It excluded wear and tear and a million other things. What is the use???
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The warranty is subject to the Unfair Terms in Consumer Contract Regulations 1994. Under s6 any ambiguity in the contract is to be interpreted in favour of the consumer. If the national rate was not specified then the consumer must be entitled to assume that the rate is reasonable. £25 per hour is a joke.
You will also have a claim under s14 of the sale of goods act - goods sold must be of satisfactory quality.
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Thanks to all for your responses.
Vehicle has been returned to the dealer to get fixed. We will also be notifying them in writing that any further major failure in next 30 days or 1000 miles will result in us returning the vehicle for a refund under the Sale of Goods act.
With regard to the warranty...
The dealer confirmed that even when they sell a 25k Boxster they include the standard Warranty Holdings 12 month warranty. This is a warranty that insists you get your Boxster serviced at a main dealer at recommended intervals to maintain the coverage, but will then only pay 25/hr labour rate to do warranty repairs.
The dealer tried some flannel about how the maximum claim amount listed on the policy was the purchase price of the car, I said that didn't change the fact that the policy stated they would not pay more than their national labour rate of 25/hr, which is a joke. I asked the dealer to confirm in writing that the warranty would pay main dealer labour rates, which is what the salesman promised. He ummmed and aaarrred and said he would get back to me.
I will keep you posted.
mike
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To prove how unreasonable they are: ask them to service your car at standard hours times and £25 per hour. Note their reply....(filter out the swear words first)..
" insists you get your Boxster serviced at a main dealer at recommended intervals to maintain the coverage, but will then only pay 25/hr labour rate to do warranty repairs."
The comparison will prove to any legal beagle that they are just being 100% unreasonable...
madf
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Just a though.
How much does a dealer get from the manufactueur for a warranty repair?
Dealers do not usually get paid the full retail charge for labour when being paid for work they do under warranty.
(i.e the 60/100 per hour they commonly charge)
Bearing in mind the actual cost for the labour a charge of £25/ph may actually be a reasonable charge the dealer can make to the warranty company (bearing in mind the volume of work that the dealer can get from the warranty company)
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I'll try & say a few kind words about Warranty Holdings/Drive Assured, as this is who we use.
They are the biggest operator in the field (actually owned by Ford)so will be there to pay a genuine claim,if you make one.
They offer approved repairers throughout UK,not always too local though, if you can't get the job done yourself, at your chosen garage for some reason.
If you are experiencing problems with a claim, I should forget about dealing with them directly, just get back to the dealer, let him do it.When we've had to do this, we in turn pass it onto the warranty rep,he's the guy that earns commission from the policy you've just bought.
More often than not you can get things sorted OK, after a little while.
Mark
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There's a fair bit of "they said..." in all this. Like many people these days I do much insurance (and other) business by phone etc. I know people who always put a dictaphone in their breast pocket when talking to car dealers, insurance companies etc etc. Whenever I take out any policy or phone for advice I put my phone on hands free and use my camcorder to record the conversation. I know test drivers who record conversations with the police if they are stopped too. Several people I know have found this action to be advantageous. Might be worth your while recording any further conversations - and try covering some old ground in those conversations too so you've got some 'retro' evidence if you should ever need it.
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