The Value of Free Maintenance Offers on New Cars
Most maintenance plans for nonluxury brands are more sizzle than steak. New cars don't need much upkeep.
General Motors’ announcement last summer that it would offer two years of free maintenance for its 2014 models expanded the field of brands that add regular maintenance to the factory warranty. The word free carries serious marketing clout. But if you’re cross-shopping models from different brands, how much should a free maintenance program factor into your decision?
That depends on the details of each plan. Most maintenance plans for nonluxury brands are more sizzle than steak: They cover most of your car’s maintenance needs for a while. But in the first couple of years, new cars don’t need much upkeep—generally oil changes and tire rotations. That may be worth only a few hundred dollars. Free maintenance on a luxury brand, however, can add up to serious bucks.
Mainstream makes. The promise of free service on a Toyota, Volkswagen or Chevrolet might tempt you away from a Honda or Ford, which don’t offer maintenance programs. But a rebate or bigger discount on a competing brand that doesn’t offer free service might more than make up for your maintenance “savings.” And those savings may not add up to much anyway. For example, Toyota offers free maintenance on its vehicles (including Scion models but not Lexus) for two years or 25,000 miles, whichever comes first. For the Toyota Camry, the service guide recommends an oil change every 10,000 miles, tire rotations every 5,000 miles and a multiple-point inspection at each service interval. Over 25,000 miles, covered maintenance would cost just over $300, according to Vincentric, an automotive-data firm.
The other programs from nonluxury carmakers have similar terms. GM’s will cover 2014 Chevrolet, Buick and GMC models for two years or 24,000 miles. Volkswagen started offering free maintenance for three years or 36,000 miles on 2009 models, but soon after GM announced its program, Volkswagen cut its free maintenance for 2014 models to two years or 24,000 miles.
Luxury brands. The value equation shifts for luxury buyers. Service costs add up fast—oil changes can run $100—and the programs tend to be more comprehensive and cover more miles. “There’s more benefit for a luxury buyer,” says Alec Gutierrez, senior analyst for Kelley Blue Book. If you’re cross-shopping, say, an Audi or Mercedes-Benz without free maintenance with a BMW that has free service, he says, “BMW’s plan could definitely sway you.”
BMW’s four-year or 50,000-mile maintenance plan includes not only service visits but also replacement of wear-and-tear items, such as wiper blades and brake pads and discs (likely needed around year three or four). Over 50,000 miles, maintenance on a 5-series sedan adds up to $2,000, according to Vincentric. BMW’s sister brand, Mini, offers the same coverage on its cars for three years or 36,000 miles. Hyundai has similar coverage on its top-of-the-line Equus for five years or 60,000 miles. Even with the best programs, you’re on your own if you need new tires.
Among other luxury makes, Cadillac covers basic maintenance (no wear-and-tear items) for four years or 50,000 miles. Current Lincoln models have the same coverage, but Lincoln will cut the offer to two years or 24,000 miles for its 2014 vehicles. Volvo covers three years or 36,000 miles, and Jaguar covers only the XK, for four years or 50,000 miles.
The best way to shop for new-car values is to compare long-term ownership costs. You can find Vincentric’s five-year ownership-cost estimates for hundreds of models at www.nadaguides.com/cars/cost-to-own. The value of free programs will be reflected in the overall maintenance cost.
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