Published on January 5th, 2022 | by Subhash Nair0
Are Dealerships Taking Advantage Of The Flood Repairs With High Prices?
Are 3S and 4S Centres making too much money from repairing cars affected by last month’s flood?
It is known that authorised 3S and 4S centres tend to charge a premium on replacement parts and servicing. This is why people are prepared to do car repair outside of the official service centres. Our question is: with the recent floods, have these authorised dealerships been profiting from the misery and suffering of those affected?
Lots Of Malaysians Are Affected
Flood repair costs can be extremely high, and as Allianz Malaysia pointed out, only a tiny fraction of Malaysians have special perils coverage for their cars. With an estimated 50,000 cars damaged by floods last month in Malaysia, it’s clear that there are going to be tens of thousands of vehicles being sent into authorised dealerships for repairs.
There Is SOME Relief
If your car’s insurance policy doesn’t include special perils relief, then you do get a little bit of relief from PIAM’s special fund, which gives you RM500 off on car cleaning for a limited time.
Route Hunters put together a nice piece detailing which brands are offering what in terms of flood relief. In brief, most brands are offering between 15% to 50% off parts for flood repairs. Some brands are limiting discounts to selected parts, other brands are limiting discounts to selected customers. A few are offering 12-month easy payment plans. Most are offering free towing services to authorised dealerships.
While any aid is commendable, it’s still not exactly charity.
Owners May Not Have A Choice
Many older, more basic vehicles can be repaired when flooded at any trusted workshop. However, today’s cars are filled with computers and many parts are proprietary to each manufacturer. When you pair that to a semi-conductor shortage, what you’re left with is a lot of customers without a choice but to go back to the authorised dealership, where parts will most likely be in stock.
Cars that are 5 years or newer are probably still under manufacturer warranty. Many owners will not want to risk voiding that warranty by carrying out flood repairs outside. Hence, they will have no choice but to accept whatever charges are levied against them by their dealers.
Even with a 15%, 20% or 30% discount, these dealers are probably still profiting. Now, there’s nothing wrong with a business trying to make a profit, particularly after a very tough year filled with lockdowns. However, when the customer has no choice and they’ve already suffered so much financially from the effects of the flood and the pandemic, the discounts should be larger and perhaps the government should step in to make sure these consumers are adequately protected.
Think about how easy it would be for a dealer to prescribe repairs that were not necessary. Many owners will be clueless as to whether those repairs are essential or not and have no recourse to a 2nd opinion. Part pricing in these dealerships is such that car brands and the service centre usually both make a small profit, which is normally ok. But in this situation, perhaps these profits should be revised or removed altogether.
What do you think? Are authorised dealerships doing enough to help out flood-affected customers? Or should the government provide additional aid or protection?