Franchised United Kingdom dealers refusing to carry out repairs on new cars covered by independent warranties could leave thousands of motorists 'high and dry', automotive warranty company Warranty Direct has claimed.

The company has raised concerns about this "restrictive practice" as the government regulatory body, the Office of Fair Trading (OFT), reaches the closing stages of its six month long fact finding study into the servicing of new car warranties.

New car buyers in the UK generally receive a three-year warranty as standard though responsibility for cover varies. Some manufacturers cover their cars for the full three years while, in other cases, such as BMW and Peugeot, the manufacturer provides the initial two years' cover with dealers covering the third year.

Vehicles imported from the EU usually arrive with between 12 and 24 months' 'pan-European' warranty cover, leaving the consumer the option of buying independently sourced 'top-up' cover from the retailer or companies like Warranty Direct.

During the height of the 'Rip Off Britain' campaign two to three years ago,  when many buyers boycotted what they perceived as over-priced UK-sourced vehicles, more than 100,000 cars were imported annually from Europe

Warranty Direct said that evidence suggests that some franchised dealers are unwilling to recognise the non-manufacturer approved warranties often bought with these cars.

"Although consumers can get the repairs done anywhere, the [used car] market is structured in such a way that future residuals will be hit if the work is not [carried out] within the [franchised dealer] network - hence the reason why many make the local dealer their first port of call," said Warranty Direct managing director Duncan McClure Fisher. "However, there is no reason why this stigma should apply to repair work."

The company said a customer from Chelmsford was forced to cancel his Warranty Direct policy on a European-sourced Audi TT after his local franchised dealer refused to recognise the warranty. The same dealer had only reluctantly agreed to undertake the first year EU warranty work as a goodwill gesture.

McClure Fisher said: "Unable to find a willing Audi dealer in his area, and worried that he needed to protect the re-sale value of the car, the customer was forced into spending £525 on a one year, manufacturer approved warranty from the [Audi] dealer. That was £50 more than the two-year cover he originally had in place from us."

McClure Fisher said that, with franchised dealers' labour rates as high as £115 an hour, and more than double the average of an independent specialist, it is no wonder that dealer warranties are so expensive.

"It's unscrupulous and uncompetitive behaviour. A shocking indictment of the restrictive practices dogging the industry," he said.

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