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Key points:
- Capped price servicing is a routine maintenance program for your new car.
- In theory, one appealing aspect of this is that you know how much your service will cost.
- It’s important to check the fine print, though, as you may be hit with unexpected extra expenses.
What is capped price servicing?
According to the Australian Automotive Aftermarket Association (AAAA), capped price servicing is a “routine maintenance program” that offers new car owners a fixed or ‘capped’ price on some servicing requirements within a dealership network for a set period of time, provided that certain conditions are met. This means when car owners have their new car serviced per their car manufacturer’s requirements, they will know ahead of time how much that service will cost.
How does capped price servicing work?
CPS arrangements differ from car brand to car brand, but typically a manufacturer will publish a servicing program for your car, usually on its website, which details the price for a service at a participating dealership that is carried out within a certain schedule. For example, some CPS programs may require services every 12 months or every 15,000kms (whatever comes first).
Car owners will generally need to follow the service schedule provided by their manufacturer in order to be eligible for the price quoted under the capped price servicing program.
How long these CPS programs last for your particular car will also depend on the manufacturer. For example, some Toyota car owners can access capped priced services for the first three to five years their car is on the road, depending on their vehicle’s model, while for Kia customers it is typically seven years. Some may also offer CPS for the life of the vehicle.
Some manufacturers’ websites allow customers to check their car’s CPS status via its VIN number, which can generally be found marked under the bonnet of a car, at the bottom of the windscreen or along the driver’s side door closure area.
What services are covered under capped price servicing programs?
According to Car Advice, services that are often covered under capped price servicing programs may include labour, genuine parts (which are made by the manufacturer and outlined within the regular service schedule), oils and fluids, and environmental charges (the costs for dealers to dispose of waste products from your car such as oils and brake fluids).
Car Advice said some of the things that are excluded from CPS programs typically include repairs for damage linked to a crash, tyre replacement, wheel alignment, the repair of aftermarket parts (those not made by the manufacturer), and the replacement of wear-and-tear items (such as wiper blades and brake pads).
Check the terms and conditions of the manufacturer’s capped price servicing program to see what items are covered and what is excluded.
If you are after a level of financial cover from loss or damage to your car caused by an accident or another defined event (such as a storm or fire), then you may want to consider purchasing a car insurance policy.
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Why do some car brands offer capped price servicing programs?
The Executive Director of the AAAA, Stuart Charity, said CPS programs are usually marketed as “an enticement for purchasing a new car”, although he noted most car brands used them primarily as a customer-retention tool designed to keep service work and the purchase of parts and accessories within their own dealership networks, to improve profits.
Is capped price servicing worth it?
While many car manufacturers claim that their CPS programs offer full transparency over pricing, Mr Charity said this was not always the case.
“For example, vehicle owners may not be aware that the cost of a CPS program may be built into the purchase price of that car,” Mr Charity said.
“In addition, many CPS plans do not cover critical service items as specified in the manufacturer’s own recommended service schedules. These services or replacement parts often come at an additional cost.”
Mr Charity said it was important that consumers carefully read the conditions involved in any CPS deal prior to purchasing a vehicle.
CarsGuide journalist Andrew Chesterton agrees with Mr Charity and said reading the fine print on capped price servicing programs is key. He also said consumers should check the current capped price on offer from their car manufacturer before they book their car in for a service, as some manufacturers reserve the right to change the price of parts of their programs at any time, such as the labour rate or oil and coolant costs.
Mechanic.com.au also has words of caution to offer about capped price servicing programs, saying that they may “disguise or mask” the true cost of servicing a vehicle, due to many exclusions and hidden costs.
→Related article: Australian car warranties guide
What should you ask your new car dealer about capped price servicing?
Before agreeing to a CPS contract, it may be a good idea to ask your new car dealer some questions regarding the program on offer, such as:
- What is the duration of this CPS program and when does it take effect?
- What is the recommended scheduling service for my vehicle under the CPS program?
- Are there any penalties imposed if I miss a scheduled service?
- Can I only have my car serviced at a participating authorised dealer for the capped price to be valid?
- Is the service price capped for the life of my car, or can these prices be increased over time?
- What items and services are and are not covered under the CPS program?
If you were satisfied by the conditions laid out from your new car dealer and have now purchased your new wheels, you may then want to explore your options when it comes to insuring your vehicle against loss or damage on the road.
Cover image source: 4pm Production/Shutterstock.com
