Capped price servicing: what you need to know

car servicing

Bruce Newton

Posted October 22, 2021

While you may get piece of mind knowing you won’t get slugged with a huge service bill after buying a new car, make sure you are aware of the devil in the details.

Remember the good old days of car servicing? Turn up at the dealer to collect your car only to be presented with a multi-page list of work items resulting in an eye-watering bill. Then hand your credit card over and hope like hell it didn’t bounce.

 It was an unpredictable, impenetrable, inconvenient and frustrating process for most of us. After all, servicing your car is all about preventative maintenance, or paying for something not to happen.

Over the years many motorists understandably found this all a bit unsatisfactory. They stopped going to the dealers for service and instead detoured to cheaper third-party repairers.

That was ultimately bad news for the manufacturers and their dealers who make vital income from servicing and the sale of parts. And so, ‘capped priced servicing’ was introduced.

As the name suggests, it literally spells out the maximum price it will cost you to service your car before you roll it into the workshop. It’s proved so popular with car buyers, that the majority of brands now offer it in some form.

But with all such things, there’s plenty of devil in the details, so let’s investigate.

What you need to know. 

What is capped price servicing?

Capped price servicing specifies to a new-car buyer how much it will cost for a basket of inspections, checks and replacements to be completed at set kilometer or time intervals by an authorised dealer representing that manufacturer.

Dealers have an agreement with the brands they represent not to charge more than the capped price amount, although they can charge less (it almost never happens).

The deal can run for as little as three years, or in some cases, even cover the entire lifespan of the vehicle.

Are all capped priced servicing schemes the same?

While they usually exclude wear and tear items such as brake pads and tyres, they can otherwise be quite varied. It’s up to the manufacturer to decide what items are included in the capped price and what items are excluded.

It’s worth comparing the full logbook service specified by the manufacturer versus what is included under the capped price. You may find that some items critical to ongoing warranty coverage are actually outside the scheme.

Car servicing

Make sure you know what is and what isn't included in your servicing agreement. Image: Getty

Why do capped prices vary?

Prices vary only because different schemes include different services and parts. Different cars within a brand’s line-up also vary enormously in their technical specification, so that in turn affects the cost of the service and potentially, their frequency.

The cost of the service can also be subsidised to a greater or lesser degree by the brand or dealer network in an attempt to woo more buyers. Some of the cost of the capped price program can also be built into the purchase price of the car. 

It’s not a universal rule, but it’s worth bearing in mind the more expensive the purchase price of your car, the more expensive the service cost often is as well. That said, some models include free servicing early in the car’s life; Genesis, for example, has servicing built into the price, as does the Audi e-Tron electric car. And all Ferraris include seven years of maintenance. 

What are some tricks of the trade?

We mentioned service intervals a moment ago and that’s worth considering when comparing capped price servicing costs. If two cars cost $300 per service, but one requires a service every six months or 10,000km, and the other requires every 12 months or 15,000km, then the one with the longer intervals is inevitably going to cost less over time to service. 

The capped price servicing is usually tied to the VIN (Vehicle Identification Number) of the car rather than the owner, which means ongoing coverage can be an attractive feature when it’s time to stick the ‘for sale’ sign under the windscreen wiper.

While privately-owned vehicles qualify for capped price servicing coverage, many that come out of private and government fleets do not. So, check out the history of the car you’re buying.

Be aware modifications to your vehicle, including the body, engine and suspension, can void capped price servicing agreements. 

How much will servicing cost once the capped price period has expired?

This is where things get murkier. Once the capped price servicing period has expired it’s up to individual dealers to determine how much to charge you. That means there can be big differences getting the car serviced by different dealers.

Also be aware that major services can sometimes occur soon after the capped price limit.

Toyota, for example, has among the cheapest capped price servicing program, but the prices can leap on some models for later services.

It’s worth checking online calculators to ensure there are no shocks when you do go for a post-capped price servicing service. Or ask the dealer for a quote before checking the car in.

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