Thursday 27 April 2017

Invest in your car's regular service and you'll be quids in when it's time to sell

Skipping your car's regular services is a false economy, writes Shane O'Donoghue

SERVICING of a vehicle is important, not just for maintenance of wear and tear items, but also to ensure the continued safety of the vehicle for its passengers and other road users. Still, servicing isn't cheap and more people are opting for cheaper servicing options, longer service intervals, or, in some cases, are avoiding servicing their cars altogether as they prioritise other costs.

While we realise that many buyers might be put off by a car that has no service history, and we would recommend that those in the market for a used car accept nothing but a full history, we wanted to find out if it could make economic sense for a motorist to not bother. Cartell.ie, the vehicle records experts, assisted us with the task of analysing the data.

To check the effect of service history on the residual value of a car, we asked traders what discounts they would give depending on whether the vehicle has: (a) a full main dealer service history; (b) a non-main dealer service history; or (c) no service history at all.

We chose one of the most common used cars on the market -- a 2006 Ford Focus 1.6 TDCi -- with just under 100,000km on the clock.

Michael Grant, owner of Michael Grant Motors in Santry, Dublin, told us: "For non-main dealer service book I'd discount about €250 and another €1,000 where there is no service book at all. So that's €1,250 difference between a main dealer service book and no service book."

Alan Moore of Garryhinch Motors in Portarlington, Co Laois, said he "wouldn't discount for a non-main dealer service book", giving the same price as a trade-in for a main dealer and non-main dealer book on the Focus. He would, however, discount €500 in cases where no service book was supplied.

This can be contrasted with a South Dublin motor dealership which told the Sunday Independent that it would discount as much as €1,500 if a service history was not supplied with the vehicle.

In that garage there was also a significant difference quoted between main dealer and non-main dealer service history: €750.

The traders all valued the Focus at between €4,500 and €6,000. This means the absence of service history records could impact on the value of the vehicle by as much as 33 per cent -- a very significant figure.

In terms of the cost of servicing, a main Ford dealer quoted €250 for a full service; a reputable non-main dealer service agent quoted €230; and while it's difficult to quantify the non-servicing option it's assumed that some cost is incurred for wear-and-tear items. A cost of €125 seems reasonable.

If these figures are annualised and multiplied by the life-cycle of the vehicle, a total servicing cost over five years is €1,250 for main dealer servicing, €1,150 for non-main dealer servicing and €625 for the "self-service" option.

Admittedly, residual values of vehicles vary widely from trader to trader and it's always worth shopping around.

While servicing costs differ, there is some money to be saved by opting for non-main dealer servicing.

Considering that some dealers will discount as much as €1,500 for a "self-service" trade-in, then the owner stands to lose money in the long run in their attempt to save money.

However, while this is likely to be true in main dealers, (trading-in a Ford to a Ford garage for example), it's less likely to stand up in a non-specialist second-hand dealership. There, the discount of €500 quoted by Alan Moore seems a more reasonable reflection of the value of the service book. In this case the owner of a vehicle with no service book may theoretically gain a modest amount of money over the course of the five years.

Based on this small sample size and limited research, we don't believe the small savings are worth the risk and we'd continue to urge motorists to invest in safety by ensuring that their cars are well maintained.

Spokesman for Cartell.ie, John Byrne, said: "The results of the research emphasise that servicing a vehicle can impact its residual value -- but it's not always as obvious as you might think.

"The difference between a main dealer service book and a cheaper alternative may not affect values at all unless the owner intends trading the vehicle into a main dealer garage," said Byrne.

'The absence of service history records could impact on the value of the vehicle by as much as 33 per cent'

"However, the focus should not really be on resale value when it comes to servicing but rather on road safety. Servicing a vehicle is important for the occupants of the car and other road users: that should be the main consideration."

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