European Block Exemption 2003
All major makes of new cars in the UK will in the future be sold without servicing ties as part of their warranties, following action by the Office of Fair Trading. The remaining manufacturers whose new car warranties include servicing ties have now lifted their servicing restrictions. Consumers will now be able to choose freely where they have their new cars serviced.
The move comes after an Office of Fair Trading study into new car warranties found that the "dealer-based extended warranties" offered by manufacturers included terms requiring that the new cars are serviced at a garage belonging to the manufacturer's franchised dealer network. This was limiting consumers' ability to choose where to have their car serviced.
John Vickers, OFT Chairman, said:
"The car industry's response to the OFT's recommendations to remove servicing restrictions is good news. Consumers should now benefit from increased choice and competition between franchised and independent garages."
The lifting of the ties has avoided the possibility of formal action by the Office of Fair Trading under the EC competition law.
Franchised dealers have been carrying out around 90% of servicing for cars up to three years old. However, servicing at franchised dealers is typically more expensive than servicing at independent garages. The average price of a service at a franchised dealer was found to be 72% more expensive than at an independent garage, without any apparent difference in the quality of the service offered.