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Last Updated: Tuesday, 27 May, 2003, 16:26 GMT 17:26 UK
Car dealer costs 'nearly double'
A car mechanic
Warranty rules stipulate franchised dealer servicing
Motorists who have their cars serviced at main franchise dealers are facing inflation-busting bills according to new research.

The research, from motor warranty specialist Warranty Direct, suggests motorists are being charged on average 44 % more for labour at franchised dealers than they were five years ago.

Warranty Direct highlights a growing gulf between the charges levied by franchise dealers and independent garages.

Dealers franchised to repair and sell prestige brands such as BMW, Mercedes and Land Rover were found to charge the highest for an hour's labour.

On average the labour costs at the main dealers of such prestige brands has risen by 63% since 1998, Warranty Direct said.

But labour charges have risen much more slowly for drivers of mid-market brands such as Citroen, Rover and Nissan.

Volkswagen gulf

The franchised dealers of 30 UK brands were ranked as to how much their hourly labour rate had increased since 1998.

Biggest price rises
Volkswagen 95% from 51 to 100
BMW 85% from 62 to 116
Volvo 79% from 62 to 112
Land Rover 77% from 57 to 101
Alfa Romeo 66% from 49 to 83
Source: Warranty Direct

Volkswagen drivers have endured the biggest price increases, with labour charges rising by about 95% since 1998.

The average wage of UK manual workers has increased by only 12.1% over the same period.

Manufacturers' warranties now stretch for longer periods than was the case five years ago, but with the built-in proviso that all servicing is carried out at a franchise dealer.

Smallest price rises
Mazda 2% from 51 to 52
Citroen 3% from 53 to 55
Renault 3% from 65 to 67
Honda 17% from 56 to 65
Nissan 22% from 53 to 65
Source: Warranty Direct

As a result, new car buyers are tied to dealers, and are therefore forced to pay higher charges for a longer period than was the case in the past.

"It's ironic that as new car prices have tumbled, squeezing dealer profit margins on the way, labour rates have rocketed," Duncan McClure-Fisher of Warranty Direct said.

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