Warrant deferral doubles the pressure on workshops

THE GOVERNMENT’S DECISION TO DEFER VEHICLE WARRANTS, SEEN AS A SIX-MONTH EXTENSION TO OCTOBER, RAISES SAFETY RISKS AND PILES THE PRESSURE ON WORKSHOPS

The government’s emergency move to defer vehicle warrant and certificate of fitness renewal during lockdown will have knock-on effects beyond already lost revenue for the vehicle servicing industry.

The vast majority of car workshops are small businesses with less than five staff. The Motor Trade Association has already calculated a loss to the sector from lost WOF inspections alone during March and April of $29.9 million, with another $25.1 million lost from repairs.

This lost repair revenue is a conservative estimate based on the current national first-time failure rate of 41 per cent.

MTA chief executive Craig Pomare

Unsafe vehicles unchecked

But two other issues are of even more concern. The first is the impact on the safety of letting unchecked and possibly unsafe vehicles stay on the road for up to six months longer.

The second was the effect of deferring several months’ worth of warrants and bunching them together to expire at the same time.

The government’s plan, announced by Transport Minister Phil Twyford on April 9, gave vehicles with warrants and certificates expiring from the start of the year up to October 10 to renew them. The way this was reported in some media gave the impression this was effectively giving all warrant renewals from 1 January six months to renew from the date of the announcement, rather than up to six months from expiry. That meant many drivers will think they don’t need to renew their WOFs until October. That could extend the financial pain, and create a glut of warrant checks at the same time — and again in another year’s time when they expire.

MTA chief executive Craig Pomare says around half a million warrants expire every month.

Unplanned seasonal demand

Shifting all of the demand from March and April to October will have the effect of creating a seasonal demand in an industry that is not set up to cope with it. Small workshops cannot manage seasonal peaks and especially the troughs that will occur as a result of the shutdown. The lack of warrants issued in March and April means they will be missing from renewals again at the same time next year.

At the time the extension was announced, it was the right move as most motorists could not access workshops to get their vehicles checked and it wasn’t clear how long New Zealand would be at Level 4. However, now that we are in Level 3 and workshops have opened, there is no need for a six-month timeframe, assuming alert levels continue to decrease.

In Australia, the task of maintaining the nation’s vehicle fleet was considered an essential service and workshops continued to operate under that country’s more relaxed lockdown regime.

Craig Pomare says the MTA is in discussion with the New Zealand Transport Agency and has suggested instituting a ‘tapered approach’ to WOF extensions, with the extension reducing over the next three months and business as usual from July, if alert levels allow.

Secondly, the MTA suggests new WOFs expire from the date of the old WOF to restore the even annual spread and avoid peaks and troughs.

The greatest concern has to be the potential impact on road safety. That’s a significant issue in New Zealand with a vehicle fleet average age of 14+ years.

If left unchecked, the six-month extension would mean some vehicles going uninspected for 18 months, putting thousands more kilometres onto those vehicles. It will inevitably result in more unsafe vehicles on the road, and make some even more unsafe, with potentially fatal consequences.

Three-fold increase

Already about 15% of fatal crashes involved vehicle defects, a three-fold increase from 2015.

Lights, tyres, suspension and brakes represent the greatest percentage of WOF failures and — partly because of the WOF regime — most New Zealanders do not check their own vehicles. They rely on warrant of fitness checks to spot deficiencies in key safety items. Yet it’s almost certain that most people will make full use of the grace period and only get their vehicles checked the next time they need a warrant.

Craig Pomare said the WoF is ‘bread and butter’ for many small workshops.

“Even though it is a service often provided at a loss, members take great pride in carrying out this essential safety service, he said.

“Given the Covid-19 level 3 restrictions we note the inspection, now averaging 45 minutes, will likely take longer, and longer still if you include any cleaning or sanitising that takes place. Businesses may need to rethink what they charge for a WoF with a possible consequential impact on demand.”