VW FS applying excess mileage charge before end of PCP
Discussion
The benefit to the customer of these Service Plans is that they fix the cost of servicing ( no increases due to change in labour rate, lubricants, parts prices etc ) but also break the lump sum cost of servicing down to a regular monthly payment. The cost of servicing may be at a discounted rate or it may not depending on the scheme, but it's handy for those who like to have known costs.
The benefit to the dealer is that it makes the customer more likely to bring the car back to the supplying dealer for servicing as the service plan can only be redeemed at a franchised dealer, or in some cases only at the supplying dealer.
Many of these schemes are administered through a company called EMAC in Crewe. I've seen the way that the individual accounts are administered and can't see how EMAC make any money out of it short of getting an investment return on the money deposited with them. Pay them £400 for a Service Plan and they will release £400 to dealers for servicing when it falls due. There's no "admin charge".
In a case like the OP's , where he has been sold a 10k miles per annum service plan for lets say ( for easy maths ) 3 services over 3 years at a cost of £240 each he'll pay £20pm and when he goes in for service in month 35 there will be just enough money in the pot to cover the final service.
However if he's actually doing 15k pa then he'll go in for his 30k service at 24 months and his "maintenance pot" will be empty ( He'll have paid 24 x £20 but will have already received a 10k and a 20k service at £240 each ).
Sure he's signed an agreement and he's a trustworthy bloke, so obviously he intends to complete the payments, effectively paying for that last service in arrears. But if EMAC's business model is to make a return on monies paid in advance then you naturally can't allow accounts to go into arrears, hence the request was made for additional money.
The benefit to the dealer is that it makes the customer more likely to bring the car back to the supplying dealer for servicing as the service plan can only be redeemed at a franchised dealer, or in some cases only at the supplying dealer.
Many of these schemes are administered through a company called EMAC in Crewe. I've seen the way that the individual accounts are administered and can't see how EMAC make any money out of it short of getting an investment return on the money deposited with them. Pay them £400 for a Service Plan and they will release £400 to dealers for servicing when it falls due. There's no "admin charge".
In a case like the OP's , where he has been sold a 10k miles per annum service plan for lets say ( for easy maths ) 3 services over 3 years at a cost of £240 each he'll pay £20pm and when he goes in for service in month 35 there will be just enough money in the pot to cover the final service.
However if he's actually doing 15k pa then he'll go in for his 30k service at 24 months and his "maintenance pot" will be empty ( He'll have paid 24 x £20 but will have already received a 10k and a 20k service at £240 each ).
Sure he's signed an agreement and he's a trustworthy bloke, so obviously he intends to complete the payments, effectively paying for that last service in arrears. But if EMAC's business model is to make a return on monies paid in advance then you naturally can't allow accounts to go into arrears, hence the request was made for additional money.
Gassing Station | Car Buying | Top of Page | What's New | My Stuff