Nissan poised to announce capped-price servicing

Surprise service bills may soon be a thing of the past.

Nissan Australia is weeks away from announcing capped-price servicing across its range -- and the company predicts most mainstream car makers will follow within the next 18 months.

The move follows capped-price servicing offers by Toyota and Mitsubishi. Toyota introduced capped-price servicing on selected models purchased from January 2008 but then expanded the offer to include the whole range from July 2008. Meanwhile Mitsubishi introduced capped price servicing from January 2010.

Car companies have intervened to create stability and certainty with service prices because, in recent years, many dealers have sought to recoup lost profits from the skinny margins in new-car sales. This has led to dealers quoting and charging wildly erratic prices for the same service.

A telephone poll by the Carsales Network with several popular brands saw the quote for a routine "oil and filter" service vary from $300 to more than $600. The same service in a Toyota or Mitsubishi under the capped pricing scheme is as low as $130 or $195 respectively.

Speaking at the launch of the new Nissan Micra small car in Melbourne overnight, the boss of Nissan Australia Dan Thompson told the Carsales Network: "Capped price servicing is something we've been looking at for a good year or more and if you ask me that question in a few weeks' time we'll have a story to tell."

When asked for more detail, he said the offer will be across the whole range and extend beyond the warranty period (Toyota and Mitsubishi service deals expire within the warranty period).

But the Nissan servicing deal won't be at discount prices, he said.

"From Nissan's perspective it is critical to give customers some transparency and certainty about what it's going to cost," he said.

"The other [car brands] are using more of a discount model, to drive sales in the showroom. For us it's about price certainty. And we will go for longer periods of time and beyond the warranty period."

Thompson said it was only a matter of time before other mainstream brands followed suit given that inconsistent service pricing was a "black spot" on the car industry.

"Give it another 12 to 18 months and I think you'll see all the major brands have some form of capped price servicing," he said. "Customers want certainty and you can lose them to non-dealership outlets if you don't look after them."

Toyota's "service advantage" deal ranges from $130 on small cars to $170 on larger vehicles such as the Kluger SUV. The first six services (every 10,000km on a Toyota) can be done under Toyota's capped-price scheme within the three year warranty period. Critically, however, the deal expires prior to some of the major services, such as the 80,000km service on a Yaris which costs about $600.

Meanwhile each of Mitsubishi's "diamond advantage" service charges is dearer -- but fewer visits are required because there are 15,000km service intervals.

But while Mitsubishi offers five year 130,000km warranty, the service deal expires at 60,000km or four years -- whichever comes first.

The first of four routine services on a small Mitsubishi start from $195 and climb to $250 for the three remaining service visits, while on a Mitsubishi 4WD they start at $300 for the first service and on a diesel model can escalate to $580 for each of the remaining services.

While the Mitsubishi service charges are dearer than Toyota's, the prices under both capped price schemes are significantly cheaper than servicing prices before they were introduced.

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