What is Capped Price Servicing and How Does it Work?

Purchasing a new car is no doubt one of the most significant purchases you’ll make in your lifetime. It’s important to note, though, that after your purchase, servicing and maintaining your vehicle over the span of a decade or more adds thousands to that initial expense, which is why manufacturers have moved to introduce more capped price servicing deals on purchases of their new and even used cars.

But what is capped price servicing, how much does it stand to save you in the long run, and what are some things you might not know about what’s included in a capped price servicing package? Let’s find out.

What is Capped Price Servicing?

As the name suggests, capped price servicing is a package that places a limit on the amount of money that you’ll spend on your scheduled services at your dealership’s servicing centre. As the car market becomes more competitive, more manufacturers have moved to introduce capped price servicing offers to incentivise a purchase and give the buyer confidence that there will be fewer unexpected - and expensive - surprises come servicing time.

Capped price servicing means that when you purchase your new or certified used car, you’ll be given a price list for your upcoming scheduled services, and so long as you stick to the service intervals (usually 12-months or 12-15,000km) and visit your manufacturer’s dealership, the cost of your general services will remain at the specified level- even if more work or components are needed to complete the service. In essence, capped price servicing locks in the price of your services, but these are subject to a number of terms and conditions which we’ll cover later in this piece.

What is Prepaid Servicing?

Some of the luxury manufacturers offer something similar to a capped price servicing plan on their vehicles, which is often referred to as a prepaid servicing plan. At the time of your purchase, you’re given the option to pay for the ability to lock-in certain servicing prices ahead of time, similar to a CPS package, but at an added premium. These prepaid packages typically lock in the costs for the same set of general services, while more expensive packages can cover wear and tear items, and even more expensive OEM engine components. We encourage you to contact your dealership to see what’s covered with their prepaid service plan.

What’s Included in a CPS Package?

Typically, a capped price servicing package covers general services at the 12-month or 15,000km mark for your vehicle, and includes services like an oil and oil filter change, brake fluid and pollen filter replacement with genuine OEM parts, as well as the labour costs associated with performing safety inspections and diagnoses. Scheduled major services include replacements of brake components, fuel filters, spark plugs and certain drive belts. Ahead of your purchase, remember to refer to a manufacturer's CPS policy to see exactly what’s covered in their minor and major capped price servicing packages.

What’s Not Included in a Capped Price Servicing Package?

While each manufacturer retains their own unique capped price servicing package, typically ‘wear and tear’ items and any major repairs or replacements are not covered by the majority of capped price servicing agreements. This means that items that degrade over time and kilometres like washer blades, lightbulbs, belts and engine components are generally not covered by a capped price servicing package, and you’re likely to foot the bill for these replacements. Having said that, each CPS package is different, and some packages do actually cover wear and tear items so, again, it’s essential you contact the manufacturer and get a list of specifics.  

How Much Money Can Capped Price Servicing Save You?

Before capped price servicing packages were introduced to Australia, car owners that didn’t have the time or awareness to shop around dealerships were often paying too much for services. One of the biggest benefits of capped price servicing is the transparency on offer when it comes to regular scheduled services. You’re able to arrange your budget - well ahead of time - around these services, and save potentially thousands over the time you maintain your car due to the price restrictions that the manufacturers have now put in place.

What are the Important Terms You Should Know About Capped Price Servicing?

One of the most important things for you to note here is that capped price servicing packages do not cover all aspects of your vehicle, meaning that if something needs repairing that isn’t covered by the CPS terms, you will be paying the bill regardless of your coverage. Some manufacturers also reserve the right to increase the price of their capped price services over the lifespan of your vehicle, so it’s important to check whether or not the service price is locked in, or if it is likely to increase over time.

Five Things You Should Know About Capped Price Servicing

1. Capped price servicing rates can increase over time
2. Wear and tear items are generally not covered by capped price servicing
3. Each CPS package is different; contact your manufacturer to find out what’s covered
4. Service intervals must be met
5. Some prepaid servicing schemes cover major repairs, wear-and-tear