Good in parts

Published Jun 24, 2015

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This article was first published in the first-quarter 2015 edition of Personal Finance magazine.

Choosing a new car is hardly an exact science. Your decision will be swayed by many things, possibly including your tax status, disposable income, company car allowance, running and maintenance costs, resale value, the opinions of your spouse and children, recreational habits, frequency of out-of-town trips, the micro- and macroeconomic climate, fuel price, brand recognition and – let’s be perfectly honest here – a teensy dash of ego. Oh, and the colour.

Buried among these are a couple of items that are often ignored, possibly because they sound so boring: running and maintenance costs. In reality, these are among the more critical elements of car ownership, and underestimating their significance could result in a great deal of unhappiness – particularly when you are buying an older car, or when your own vehicle’s warranty and maintenance plan have expired.

Veteran motoring journalist and industry analyst Malcolm Kinsey has no illusions about the hidden costs of motoring or the potential for accruing big bills from even a minor collision. His annual Kinsey Report on parts pricing (the similarity of its title to the eponymous surveys of human sexual behaviour from 1948 and 1953 cannot be accidental!) is regarded by prospective vehicle buyers as an extremely valuable resource.

Understandably, it makes some manufacturers happy and others distinctly nervous. Now in its 25th year, the report continues to deliver the goods by detailing some of the costs commonly involved in servicing, repairing and fixing accident damage to vehicles, comparing a selection of the most popular models on the market across eight categories.

For the 2014 survey, Kinsey studied 72 vehicles, concluding that some manufacturers and importers are “working extremely hard to improve the affordability of their vehicles”. He points out that volume plays a large part in pricing, so when sales increase, volume discounts from the parent company kick in to reduce the financial pain.

The prices of crash parts (industry-speak for accident-related replacement parts) can be particularly scary, and you may find a fender-bender pushing up the panel beater’s bill to a sum just short of ludicrous. As an example, Kinsey cites the high replacement cost of a halogen light unit (R15 000 or more). He goes on to offer a tip that could save “a good few thousand rand” in the event of an accident: don’t carry anything heavy on the passenger seat if it is not occupied. He explains: “The vehicle can be ‘fooled’ by those kilograms into deploying the airbag, which often breaks the windscreen – and that could add R20 000 more to the account.”

The winner of the report’s popular “city cars and entry-level” category (embracing affordable small cars), with the least expensive service, repair and crash parts by a healthy margin, was the Indian-built Ford Figo 1.4. Ford also captured first spot in the competitive “compact crossovers” section with its Eco Sport 1.0T, powered by a spectacularly successful three-cylinder turbocharged engine.

“Crossovers”, incidentally, are vehicles built on a car platform and combining some of the best features of an SUV (sport utility vehicle), such as an elevated driving position, high centre of gravity and better ground clearance, with the best features of a regular car, such as handling that feels more like a car than an SUV and (often) better fuel economy. They may be two- or four-wheel drive.

Although Nissan’s cars didn’t perform particularly well in the 2014 survey (in 2013, the Micra achieved top score in the “city” category, and the Tiida was rated best in the “family favourites” section), its single-cab NP 200 and NP 300 Hardbody bakkies did considerably better in 2014, taking first and second places respectively in the single-cab category.

While acknowledging the Kinsey Report’s role in “driving customer perception on parts price competitiveness”, Nissan pointed out that the survey makes a simple one-on-one comparison of prices, and “customers may not necessarily gain an understanding of how much they will be spending over the lifecycle of their vehicles”.

Service intervals and parts replacement protocols at each of these services might vary from model to model, depending on the recommendation of the manufacturer, a Nissan spokesperson said, and it would therefore make “economic sense” if the customer approached the dealer to obtain this data.

Toyota was more upbeat, noting that its vehicles captured no fewer than five “podium positions” in this survey, including top spot in the crossovers category with the Fortuner and the first two places in the “family favourites” category with the Corolla Quest and the new-generation Corolla 1.6.

Not surprisingly, original equipment manufacturers (OEMs) prefer insurance companies and repair shops to specify the real thing. In fact, they insist on it, and frequently run campaigns urging motorists to consider the potential consequences of going the cheapskate route. If motor manufacturers and dealers are to be believed, there is nothing good about generics, and they speak darkly of disastrous mechanical failures, voided warranties and cancelled service plans.

It goes without saying that official dealerships have a vested interest in the sanctity of original equipment: as margins are squeezed, the income from service contracts and replacement parts becomes increasingly important. Critics of the original-equipment lobby say they must be aware that generic parts – at least, the better ones – are very different from the shoddy products of yesteryear. Why should manufacturers insist on proprietary replacement parts, they ask, when cheaper versions would work just as well? (To be fair, it must be acknowledged that OEMs have a reputation to protect: if a generic part fails and something goes disastrously wrong, the enraged car owner will instinctively blame the brand and not the dodgy replacement part.)

In October last year, the Competition Commission announced it had launched investigations into price fixing and collusive tendering in the market for the manufacture and supply of automotive components supplied to a number of OEMs. The investigation is focused on imported rather than locally manufactured parts and reportedly forms part of a bigger inquiry spanning several countries.

Meanwhile, short-term insurers argue that repair shops should be allowed to use certified alternative replacement parts where appropriate, particularly in cases where the parts are not safety-critical.

As this issue of Personal Finance went to press, the South African Insurance Association was due to discuss the high cost of accident repairs, including the cost of OEM parts and the certification of more affordable alternative parts with a delegation from the National Association of Automobile Manufacturers of South Africa.

Go to www.kinseyreport.co.za for more information about the survey.

TRY THE SCRAPYARD OPTION

Let’s assume your car has done a sterling job for years and now requires a little TLC. Your maintenance plan expired two years ago, and the warranty is but a memory, so you had no hesitation in asking your neighbourhood mechanic to replace the dodgy ignition coils with cheaper generics when the car started to misfire, and you had the good sense to replace the cam belt (again, with a generic) before it snapped and ruined the engine. But what about that cracked rear window, and the wing mirror that was crunched by a passing bus?

Don’t be too proud to shop around for a better price – and if this means visiting a scrapyard, so be it.

Here’s a case in point: a relative who drives a seemingly indestructible Toyota Conquest (circa 1996) needed to replace a small rear-door window after a break-in during which the thief made off with the rubber seal. An official Toyota dealer quoted R760 for the seal. An auto glass franchise quoted R280 for a new pane (excluding fitment). Faced with a final bill in the region of R1 100, my relative decided to visit a scrapyard in the hope of securing a better deal.

Yes, said the person behind the counter, they could definitely help him. He was instructed to follow a man carrying a toolbox, and they made their way past row after row of bent and battered vehicles to a Conquest with a flattened nose. In less than a minute, the small pane from a rear door had been removed and the rubber seal extracted. The price? A cool R100 “for everything”. My relative happily paid up, went home and fitted the pane himself. Cost saving: about R1 000. Personal satisfaction level: way up there.

* Alan Duggan is a motoring journalist and former editor of Popular Mechanics magazine.

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