What is capped price servicing?
Want to know how much your new car will cost to service for the next few years? Capped-price servicing might be the answerCapped price servicing is a fixed schedule of pricing for a car's regular servicing. The vehicle owner may pay the same amount for each service or the price may vary for major services.
Some companies offer capped price servicing only during the warranty period, or it may continue beyond the expiry of the warranty.
There is almost no downside to capped price servicing, but many motorists still feel lost trying to work out how it will benefit them – and what if any concessions they need to make.
An alternative to CPS is the pre-paid car service program, which ensures vehicle owners will only ever pay an amount known at the time of the vehicle purchase, but the downside is that the owner will be locked into having the vehicle serviced at the same dealership for the duration of the warranty or service contract. In Australia, the CPS has been the preferred service program, particularly for the mainstream brands.
The world before Capped Price Servicing
In the years prior to CPS becoming commonplace, there was no such thing as a capped price for servicing. A selling dealer could charge more or less for the same job as the dealer selling the same brand just down the road. There wasn’t consistent pricing across dealer networks.
And if the car being serviced notched up higher kilometres than the norm, or the driver was heavy on the brakes, or the vehicle spent more time on unsealed roads, then expenses not anticipated before a major service might snowball for a minor service. In each case of pricing higher than expected, there was an opportunity for the service department to pad out the job for that little extra margin.
Eventually car companies introduced Capped Price Servicing, which ensures new-car buyers are better informed or at least they can find out the prices applicable for each service in advance. These days, all car companies in the VFACTS top 10 offer their customers the option of CPS in one form or another.
How does the owner learn what the service will cost?
As part of the new car sales process, when the buyer is handed the keys an aftersales specialist will be rolled out to speak with the customer and inform him or her of various points to bear in mind – Capped Price Servicing frequently being one of those. Some dealerships even post the CPS figures on a ‘hero wall’ in the showroom. The car company may also publish the pricing schedule on its public domain website, or the website may feature a capped price calculator.
What do companies charge for CPS?
Capped Price Servicing varies for services and for different brands. And the total amount paid will depend on the length of the car service intervals and the duration of the warranty. After the expiry of the warranty, it may pay the vehicle owner to shop for servicing elsewhere – an independent after-market repairer, for example.
What are the pitfalls of CPS?
Certain ‘terms and conditions’ usually apply, and owners failing to abide by those T&Cs could end up paying through the nose. Alternatively, owners should be aware too that an automotive brand can come unstuck if it should use T&Cs unethically and to its advantage. The ACCC doesn’t like that sort of thing.
Many CPS programs run for the duration of the warranty only. Smarter car companies, such as those that wish to retain your servicing business, will offer a CPS regime beyond the expiry of the warranty.
Some CPS programs do not include unexpected replacement of consumable items. And sometimes the car companies may adjust the pricing, based on the cost of labour or parts. But this has to be done carefully, with the ACCC previously penalising Kia for a clause in the contract of sale reserving the company’s right to change the CPS pricing structure at any time.
As appealing as CPS is for new-car buyers, the onus remains on those buyers to ensure they’re fully conversant with what the service might cost.
Ultimately though, service costs are probably shaped by your driving style and the driving environment. Owners tend to presume their car is lovingly maintained and they drive like Miss Daisy’s chauffeur, but owners are frequently wrong on that score.
CPS or aftermarket logbook servicing?
There are also alternatives to capped-price servicing at a dealership, and in the case of the big aftermarket chains, such as MyCar, Ultratune, Goodyear Autocare, Repco and Bridgestone Select, they too can advise how much a service will cost you in advance.
Checklist
- Ask about capped-price servicing when you purchase your new car,
- Make sure you understand any provisions that apply,
- Those provisions may exclude commercial vehicles or vehicles sold to fleets,
- Don't lock yourself into a service contract with the dealer without checking how the prices compare,
- An independent workshop may be able to provide 'logbook' servicing at lower cost than capped-price servicing through a dealer,
- Don't forget that CPS won't cover unexpected expenses if the warranty has expired,
- Consumable components such as brake pads and wiper blades may need replacement sooner than scheduled and will cost you more on the day of the service.
As a final word, always check with the service adviser at your servicing dealership when booking your car in for service. The pricing schedule will change from time to time, but the dealership should keep you informed.
Related: DIY car repairs: Aussies servicing their own cars to save money
Related: The questions you're too nervous to ask your mechanic but should
Related: What should my mechanic charge?
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