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More freedom of choice needed in the car after-sales market

The threat of a formal investigation under European Competition law underpins a call by the Office of Fair Trading for car manufacturers and franchisees to lift restrictions on where new cars may be serviced while under warranty and to provide consumers with improved information on the terms and conditions of their warranties.

Manufacturers and their franchised dealers are obliged under the recent European Regulation 1400/2002 to open themselves up for greater potential competition for after-sales service. An OFT study reveals that franchised dealers currently carry out about 90% of servicing of cars up to three years old and generally charge an average of £199, compared with £116 charged by independent garages. This section of the market is estimated to be worth some £1.4bn pa.

To promote the further development of the market, OFT will launch a consumer awareness campaign in spring 2004, issue guidance to dealers and the rest of the motor trade and work with trade associations to develop effective consumer codes of practice.

The OFT study, ‘New car warranties’ (OFT 683), is available at:

Choose News & Publications from the navigation bar at the top of the page. Then select Press Releases 2003 from the right hand navigation bar, the article dated 17th December 2003 contains a link to the study. Alternatively, a copy can be obtained by Telephoning:  0870 60 60 321.




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