The Magnuson–Moss Warranty Act

The Magnuson–Moss Warranty Act is a United States federal law that was enacted in 1975, and governs the warranties on consumer products. Although the law does not require any product to have a warranty, but if it does, then that warranty must comply with this law.

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The law was created to fix problems as a result of manufacturers using disclaimers on warranties in an unfair or misleading manner. The purpose of this act is to make warranties on consumer products (in USA) more readily understood and enforceable and to provide the Federal Trade Commission (of USA) with means to better protect consumers.

In addition to any consumer product, the Magnuson–Moss Warranty Act is also applicable to automobiles. Simply put, as a vehicle owner, you want to ensure your factory/dealer warranty stays intact. You ensure routine maintenance such as oil changes, tire rotations, and belt replacements, and repairs are completed timely. However, these routine maintenances and repairs can be completed at a certified, independent repair shop too and the warranty will still remain valid.

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The Magnuson Moss Warranty Act outlines the requirements of a warrantor and explains that consumers are not required to use branded vehicle parts or complete repairs at a dealership to maintain the warranty. Independent repair shops can also service the vehicle. For this, the car owner needs to record all maintenance and repairs that are completed on the vehicle and save the receipts for the service, ensuring that the receipts are clearly dated and list an accurate description of the parts supplied and service performed.

Here it is important to mention that in case of a malfunction, the manufacturer or dealer (not the consumer) is responsible for demonstrating that a failure due to the use of a non-OEM related part or service, actually caused the malfunction. For example, if a windshield wiper motor in a new vehicle fails, the vehicle’s warranty claim can’t be denied because the owner installed aftermarket windshield wipers that are different from OEM (Original Equipment Manufacturer) parts. Similarly, if a wheel bearing fails or a fan belt snaps and the owner has an aftermarket exhaust installed, the dealership would have to prove the exhaust system caused the bearing failure or the belt to snap in order to deny a warranty claim. In these types of scenarios, the dealerships generally have no reason to deny the claims.

In addition to the Magnuson-Moss Warranty Act, there is SEMA (Specialty Equipment Market Association) working to protect consumer rights. Because SEMA represents aftermarket wholesalers, retailers, distributors, and manufacturers of USA, and they often keep car manufacturers in check by supporting legislation that prevents dealership service providers from denying warranty coverage. This means dealerships have become less stringent when it comes to aftermarket parts that modify performance, or suspension etc.

Scenario in Pakistan

Contrary to this, warranties of new cars sold in Pakistan are considered void as soon as even the slightest of modification or use of non-OEM parts is done to a vehicle that’s still under warranty. Furthermore, replacement parts that are available at dealerships are priced much higher than the aftermarket ones (of similar spec) available in the market. Customers here are forced to purchase expensive parts from the dealerships even if these are of inferior quality and cannot opt for installing a high-quality aftermarket part in fear of getting the warranty void.

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In some cases, customers are even forced to use the lubricants (engine oil/ brake fluids etc) that are on sale only at the authorized dealership and the use of lubricants of the same spec from the market is prohibited as it simply gives a reason for dealerships to nullify the warranty.

From the point of getting a new car booked to going through an endless period of wait, then enduring the multiple unjust price hikes or paying on-money/ premium to the dealerships, then getting a substandard product in the name of new or struggling to get the warranty claimed, the Pakistani auto consumers have absolutely no protection at all. Although there is only a small penalty on assemblers for delaying the deliveries, even getting that amount is a big hassle and there is absolutely no govt body or law that makes the process easier for the end consumers. In the end, the customer is at mercy of the company, which can delay or even deny paying the penalty amount.

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Pakistani auto sector needs a thorough overhaul in every aspect, perhaps something on the likes of the Magnuson Moss Warranty Act will be a good read for our policymakers. Let’s hope somewhere down the line we might be able to see a flourishing auto sector that benefits the country’s economy & progress as well as the consumers.

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