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second-hand isn't second-rate
Mechanical failure on a used vehicle is taken care of by this warranty scheme, as Bill Brock explains
FOR MORE than 18 months now some Mercedes-Benz dealers have offered their customers a mechanical guarantee on second-hand vehicles.
The quality used truck and van plan can cover any MercedesBenz commercial vehicle, from the Bremen upwards, of less than four years of age, but because the dealer has to make the vehicle good before the sale, in practice only the better vehicles taken in part exchange qualify for the cover.
A mileage limitation, applicable at the time of acceptance by the dealer, and greater than some comparable schemes, is determined by vehicle weight with a maximum of 125,000 miles for Bremen and Dusseldorf vehicles and 200,000 miles for Woerth vehicles above 7.5 tonnes gvw.
Originally the plan gave cover for just six months operation, but now the period has been extended to 12 months. The purchaser has a choice of the shorter or longer duration.
Why is there a difference? The cover against the cost of a repair
/arising out of mechanical failure is arranged through an insurance company and the cost of the premium is reflected in the price of the vehicle. The longer the cover, the higher the price naturally, but for the customer there will be no unexpected garage bills. The insurance is transferable with the vehicle if resold during the term of cover. In the event of failure there is a restriction on what can be claimed for.
Broadly speaking, fair wear and tear is not included, nor is accident damage, but breakages are. So, for example, if an engine starts to produce blue smoke it would not be covered if it were attributed to cylinder bore wear, but it would if a piston ring had broken.
Normally such items as clutch plates and brake shoes would not come within the scope of the plan, but if contaminated because of the failure of another component, then their replacement is looked upon favourably.
The total repair bill could theoretically exceed the value of the vehicle. The single claim limit is £2,500 for the smaller vehicles and £5,000 with the bigger ones and £5,000 and £8,000 for respective total cover period. The cost of a recovery will also be paid, up to an individual sum of £200 or £600 over the whole term.
When I made a recent visit to Sparshatts, a Mercedes-Benz Kent-based main commercial vehicle dealer, sales director David Jones explained that the warranty plan has the backing of Mercedes-Benz, and the London Wall insurance Company's record of no quibble response has allowed a fast turn around in the few instances where there have been claims.
When the cost is below £150 the dealer is at liberty to proceed with the repair immediately. When the estimated charge is greater, most repairs may be started following notification by telephone, but in extreme cases the insurance company may wish to send along its own assessor the next day.
The dealer is expected to submit the claim to London Wall but it is the customer who is paid because the policy is made out in his name at the time of the sale.
Mercedes-Benz encourages its dealer network to make use of the plan for it is seen as a way to maintain a high residual price and widen the customer base.
Since Sparshatts joined the plan in June 1982, it has put through 63 vehicles — 27 articulated units, 25 rigids, one Dusseldorf and 10 Bremen panel David told me that around 90 per cent of customers buying second-hand had taken up the warranty deal and added: "Finance companies are more amenable when they see some sort of cover, and it may just tip the balance on a tight deal. Prices tend to be above the average but the vehicles remain competitive as a package."
It is at the dealer's discretion whether or not he wishes to include any vehicle in the plan. If the cost of bringing a particular model up to standard appears to be excessive, then it may be easier to trade it out but a certain amount of this type of work is welcomed as it provides extra movement for the parts department and employment at the workshop's convenience.
Whereas there is a special rate set by the manufacturer for new vehicle warranty repair, the dealer is able to charge the insurance company the full retail rate for second-hand vehicle repair.
Part of the deal is regular service but it is not stipulated that this must be done by the dealer although in many cases it is. Legally, only proprietary parts — ie oil filters — should be used.
Most of the vehicles sold by Sparshatts have had recorded mileages well below the specified limit and all claims have been settled within 60 days.
Foreign travel comes within the cover and here there is a 60day limit on the length of time a vehicle can be operated continuously outside of the UK.
Account customers should have no problems in arranging credit with overseas MercedesBenz dealers. This can be done over the phone by contacting the local main dealer.
During my visit to Kent I was able to note the condition of various models Sparshatts had selected for resale and observe something of their preparation. Primary inspection is backed up by a detailed check list relating to cab and mechanical condition.
Although the plan was originally conceived to provide extra cover for the smaller operator, some larger fleets have also taken advantage of the benefits that are provided by a well prepared second-hand vehicle.