More car makers in firing line over capped price servicing

PENCILS are sharpening and tensions rising surrounding the Australian automotive world's capped price servicing programs.

Over the past two years manufacturers have rolled out capped price dealer servicing offers as each tries to keep up, or up the ante, in one of the world's most competitive motoring industries.

Kia has altered its fine print after an investigation by the Australian Competition and Consumer Commission over its program but other manufacturers are now in the firing line.

Following the investigation Kia changed its terms and conditions to ensure the prices are genuinely capped. The changes mean capped price servicing will be attached to the car - the listed maximum capped price service cost at the time of manufacture will standard even if prices and labour costs rise.

Kia will refund any amounts paid by consumers above the capped service prices that applied to their vehicle when it was purchased.

Before the ACCC investigation, the consumer watchdog said "Kia's terms and conditions allowed scheduled service prices to be amended at any time and, in fact, these prices had been changed by Kia four times since 2012".

"Capped price servicing offers can be attractive to consumers because they are a means for consumers to lock in the price of servicing their vehicle for a set period," ACCC commissioner Sarah Court said.

"Businesses that make capped price offers of this type in their advertising campaigns or represent that consumers can fix the maximum charge for particular services must ensure that these offers are not eroded by later reliance on amendment provisions in their terms and conditions which permit price changes."

Toyota, Australia's most popular selling marque, already has a capped price servicing plan which is applicable to the date of the purchase - not when it is presented to the dealership.

Misleading or deceptive conduct and making false or misleading representations about the price of goods or services are prohibited by the Australian Consumer Law.  False or misleading representations attract a maximum penalty of up to $1.1 million per contravention.

Topics:  accc australian consumer and competition commission car

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