New Car warranties have servicing ties removed: Date: 14th May 2004, Report: 85/04

All major makes of new cars in the UK will in the future be sold without servicing ties as part of their warranties, following action by the Office of Fair Trading.

The remaining manufacturers whose new car warranties including servicing ties have now lifted their servicing restrictions. Consumers will now be able to choose freely where they have their new cars serviced.

The move comes after an Office of Fair Trading study into new car warranties found that the "dealer-based extended warranties" offered by manufacturers included terms requiring that the new cars are serviced at a garage belonging to the manufacturer's franchised dealer network. This was limiting consumers' ability to choose where to have their car serviced.

John Vickers, OFT Chairman, said:

"The car industry's response to the OFT's recommendations to remove servicing restrictions is good news. Consumers should now benefit from increased choice and competition between franchised and independent garages."

The lifting of the ties has avoided the possibility of formal action by the Office of Fair Trading under the EC competition law.