Businessman Rakesh Basra thought he was well covered when he took out a two-year gold car breakdown warranty for his Vauxhall Opel Vivaro van from a Portsmouth dealership.
Rakesh believed after he’d paid £420 for the two-year extended warranty all he had to do was to take it back to the Portsmouth Richmond Hyundai workshop if he had any mechanical problem with it and they would fix it.
But the first time he tried to make a claim he was astounded to learn he’d have to fork out another £475 up front in diagnostic charges before the dealership would carry out the repair work.
Since he bought the van from them 17 months ago it had developed faults with a sticking clutch pedal, a grumbling gearbox, and an air conditioning system failure.
‘I thought it was gong to be a simple procedure,’ the Copnor Stop and Go Convenience store proprietor said.
‘I go in the garage, they take it and repair it and I don’t pay anything, but Richmond said they’d have to charge me £75 for a fault diagnostic check, and £400 for the gearbox without having done anything to it.
‘They helpfully dropped the £75 charge after I complained, but if I wanted the gearbox repaired I’d have to pay the £400 – there’s no other way.
‘When I took out the warranty none of this was explained to me. They said everything would be covered, parts and labour, and there wouldn’t be any issues.
‘Any time it goes wrong they said, just bring it back to us and it’ll be back on the road within days – that’s what I expected.
‘I didn’t read the warranty beforehand because I had the impression everything was okay with what I was being sold and there was no problem.
‘If they’d told me beforehand there’d be an investigation charge for each item every time I brought it in I’d have had second thoughts. I wasn’t told it would be so complicated.
‘To dismantle and examine the gearbox they said it would be four hours labour so I’d have to fork out £480 if the insurance company decided it wasn’t covered by the warranty. That’s a lot of money.
‘I went to Citizens’ Advice and trading standards who said it was between me and the garage and it wasn’t anything to do with them. It wasn’t until after my wife gave me the Streetwise number to contact that I finally got the ball rolling.’
We checked with motoring organisations and quickly discovered mechanical breakdown insurance-backed warranties were run of the mill with many franchised dealerships.
Rakesh was far from alone in venting his frustration with them.
Angry motorists weren’t at all happy to discover they’d have to fork out hundreds of pounds to check for faults before garage mechanics were authorised to lift the bonnet to carry out warranty repairs.
Rakesh had blown a gasket because he believed he’d bought an extension of a conventional manufacturer’s warranty and there’d be nothing further to pay if anything went wrong with his van.
His experience with Richmond Hyundai had always resulted in complete satisfaction, but says he was disappointed and shocked about having to put such a large sum of money up front to find out what was wrong with van’s gearbox.
With this in mind, we asked Rakesh to send us a copy of the AutoProtect Administration warranty paperwork so we could run the rule over it.
Although it was impressively comprehensive, like all insurance products it contained a significant number of ‘small print’ exclusions, which included the cost of diagnosis and testing. Small wonder he was confused.
Most conventional standard car warranties include the time a mechanic spends diagnosing faults in the total cost of repairs.
But insurance-based cover effectively turns participating dealerships into agents of the insurance company. They have to first check with the insurer to authorise the repair.
If it’s approved the insured can recover any upfront labour costs as part of the claim.
We assured Rakesh Richmond were fully entitled to expect him to reimburse them for the diagnostic labour charge.
Richmond spokesperson Tom Cullen told us they’d previously waived inspection charges for fixing the problems with Rakesh’s van.
He said: ‘With all warranty claims we have to spend substantial amounts of time before we can identify problems.
‘Although we’re in the hands of the insurance company we will always do what is in the best interests of our customers.
‘When selling warranties we try to be as transparent as possible because we are fully regulated, but we wouldn’t want to give the impression we don’t fully inform people about the decision they’re making.
‘Like all dealers it may be something to address further in our process to avoid misunderstanding.’
We got back to Rakesh and clarified the situation for him, but he was still very unhappy with the process.
He wanted to warn others that if a warranty insurance repair claim was turned down, they could end up hundreds of pounds out of pocket. Their only redress in the event of dispute would be to appeal to the Financial Services Ombudsman.
‘I was very disappointed and shocked with the warranty,’ he insisted. ‘With more than 43 years of driving I’ve never had this problem in the past. It really stresses you out and if you’re in business worrying about the cost and what the outcome is going to be was a nightmare and it really upset me.
‘I didn’t actually read the warranty beforehand but if I’d been told I’d be charged every time I brought it in to investigate and there’s a charge for each item, I’d have had second thoughts and wouldn’t have gone ahead with it.
‘I just didn’t believe it was going to be so complicated. Next time I buy a motor with a warranty I’m going to make sure I read it and really know what’s covered and what I’m buying.’
Streetwise invited AutoProtect of Harlow in Essex to comment, but there was no response by deadline.
Although Mr Basra bought the van while at the Portsmouth Richmond Hyundai dealership it was actually purchased from from UK Van Supermarket, which is part of Richmond Motor Group.
The group has asked us to include the additional comment to clarify what steps it took following Mr Basra's complaint: ‘As part of the Richmond group, UK Van Supermarket takes a pride in offering unrivalled customer service.
‘Mr Basra is a valued customer and we agreed to waive our £75 diagnostic fee even though our technicians spent time investigating the fault.
‘Unfortunately, the problem with the gearbox was due to wear and tear which is not covered under the warranty. The terms and limitations of this warranty are clearly set out and we do urge all our customers to read the terms of any warranty they purchase.
‘As well as waiving the £75 fee we have offered to fix the gearbox at cost and contribute 50 per cent of the cost of the repairs. We feel this is more than generous as the fault was not ours.’