Changes Coming That Will Impact South Africa’s Car Insurance

Just like in the health industry, there is now also a need for changes in the law. We need a fair and competitive regulatory environment in the car industry. This is to encourage freedom of choice for consumers and also give smaller businesses a chance to stay in business.

This new code of conduct should change things. Consumers and their rights will benefit when it comes to servicing their vehicles.

Are Changes Coming to Auto Insurance Positive?

The Competition Commission has looked closely at changes for the local auto industry. The Right to Repair SA or R2RSA campaign tells us that there has been progress on this. A Code of Conduct should bring change in the industry.

R2RSA have compiled a document with important points for the Commission. These points are based on European guidelines but have been adapted to the South African context. They believe that consumers in South Africa are facing the same challenges as European car owners.

The primary goal of the code of conduct is to promote fair competition in the automotive industry. It is also to give the aftermarket a better chance. It will allow disadvantaged people to now become more active participants in the economy. Some motorists don’t think this is good news at all, believing that aftermarket parts are inferior.

Cheaper Parts Needn’t mean Inferior

Director of Right to Repair, Les Mc Master says that people believe that independent workshops and aftermarket parts will render a car unsafe. He says that if you look at the USA and Europe, where the principles of Right to Repair are in effect, the roadworthiness of vehicles is actually higher.

Mc Master went on to say that vehicle owners in this country neglect the maintenance of their cars simply because they can’t afford services and repairs. On the other hand now, R2R will reduce the cost of parts, making it more affordable to car owners to maintain their vehicles. Access to training and technical information for the informal sector will also have a positive influence on safety.

No more Inconvenience for Consumers

The aim of the code of conduct is to also correct those practices which inconvenience consumers. Consumers must be allowed to choose wherever they wish to have their vehicles repaired or serviced. The bottom line is that there is a need for a competitive but fair environment which will give consumers freedom of choice. This will therefore also give those smaller businesses a better chance of staying in operation.

Yes, the Code of Conduct essentially targets manufacturers, but it affects insurers too.

They will –

• have to be submitting annual reports to the commission to show that they are complying with the code.
• must allocate work fairly to service providers and offer consumers a choice of approved repairers in the area where they live.
• have to fairly allocate work amongst service providers and have a list of all these approved service providers on their websites.
• not be able to go on and on appointing service providers for excessively long periods.

 

Every organisation and industry needs a code of conduct, as its a statement of values and commitments, defining the behaviour of leaders and employees. It is a benchmark against which performance is measured, and now the South African auto industry will be implementing ethical and legal policies to guide decision making in the auto industry.

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All info was correct at time of publishing September 24, 2018