SINGAPORE — Mr Alex Low, 49, started a car workshop five years ago because he could no longer stand paying “an arm and leg” to authorised agents to service and repair his Volvos.

This was the requirement to keep the three-year warranties for the Volvos – he had five over the course of a decade – valid.

For example, when he needed to fix the car’s timing belt, an authorised workshop charged him three separate fees for the parts to be serviced – the water pump, coolant and fan belt. Each part carried its own labour charges and the total fees came up to more than S$3,000.

“My workshop only charges one fee of about S$1,000 despite using the genuine parts, plus I throw in a one-year warranty,” said Mr Low, the owner of MTE Garage who is also boss of a credit management company.

Independent motor workshops welcomed the authorities’ move on Monday (Dec 11) to get major car dealers here to honour customers’ warranties even if they do not service their cars at authorised workshops. The nine major dealers here for marques like Chevrolet, Toyota, Mazda, Kia and Hyundai have agreed to remove the restrictive warranty terms by Dec 31.

This will help create a more competitive market for car repairs and servicing, said the Competition Commission of Singapore (CCS), which found that car dealers generally own the workshops authorised by themselves or the car manufacturers.

“We have been bullied by the agents,” said Mr Low. “They play the unfair game of voiding warranties (for cars serviced at independent workshops).”

Mr D J Koh, 33, owner of Koh Guan Chua Workshop, said authorised workshops charge almost double for the same four-litre engine oil package that his workshop provides at S$138, which includes complimentary services like a vacuum and wash.

With the changes, car dealers may void warranties or reject claims only if they establish damages or defects being claimed under the warranty were, in fact, caused by the independent workshops.

The Singapore Motor Workshop Association (SMWA) had been lobbying for the changes for at least three years, its secretary Joey Lim, 51, who owns Harmony Motor, told TODAY.

Monday’s development will impact 2,500 independent workshops here, he estimated.

The association’s president, Mr Francis Lim, 42, said the changes came “at the right time”.

Independent workshops began bracing themselves last year for three lean years, as a bumper crop of 10-year-old cars were due for scrapping – which meant motorists buying new cars that typically come with three to five years’ warranty, said Mr Lim, who owns BCC Automotive.

When contacted, the major dealers such as Borneo Motors, Eurokars and Cycle & Carriage kept mum. Alpine Motors and Komoco Motors declined to comment.

Only Honda agent Kah Motor said it welcomes competition from independent workshops.

Asked if its authorised workshops would reduce prices, Mr Ivan Kwa, Kah Motor’s senior manager of service and product planning, said it provides quality service at competitive prices to customers. “I do not think we need to be pressurised as a result,” he said.

The changes to warranty terms could reduce the cost of owning a car here, and an insurer called for the CCS to do more.

“We hope that this is the start of a broader policy push by the CCS to reduce the cost of motoring further, for example by eliminating the financial penalties imposed on customers when buying a new car and opting to choose an insurer not tied to the dealer,” said Mr Bob Thaker, managing director of DirectAsia.