Thousands of Saab car owners have been left without any warranty cover and are facing the possibility of big repair bills after the struggling Swedish car maker collapsed just before Christmas.
Guardian Money has been contacted by one couple forced to pay more than £1,000 to get their nine-month-old Saab repaired after it broke down just as the company went into meltdown.
They were initially told the warranty would be honoured, but were later forced to pay to get their 9-3 model back on the road. Since 19 December, when a district court in Sweden placed several Saab companies in receivership, Saab owners in the UK have anxiously awaited more information.
In December, a spokesman for Grant Thornton, the receiver for the UK business, was reported as saying that the warranties “should be honoured and there is nothing for UK Saab owners to worry about”. However, two months later a very different picture has emerged. Grant Thornton this week said there is no money to pay warranty claims, and anyone making a claim would, in effect, become a creditor of the Swedish company.
Dealers have been told there is no warranty cover from the manufacturer – yet many buyers are still unaware the company no longer exists. The problem is made worse by the fact that at least two Saab dealers were owned by Saab UK, and have also ceased trading.
If you have a Saab that is less than three years old, the three-year/60,000 mile warranty it came with is now worthless. You will also need to cross your fingers that the dealer you bought from carries on trading.
Two dealers told Money this week they would honour warranties out of their own pocket, but warned that if buyers had bought from another source they were “on their own”.
Ela Piotrowska and Les August are two motorists who have been affected. The London couple last March bought a new 9-3 diesel model from the now defunct Saab Fulham. At the end of November, after just 7,000 miles, the car broke down. It was taken to the supplying dealer who diagnosed a faulty sensor. It later emerged the car needed a new catalytic converter.
“We found another dealer who would continue the repair, and Saab initially confirmed that this would be under warranty. However, by the time the parts arrived, Saab Sweden had gone bankrupt and had called in the administrators. They would not honour the warranty nor the breakdown cover. The second repairer would only release the car after we paid the bill of £973 – on top of the £150 we had already paid for the sensor,” says August.
The couple bought the car on a hire purchase agreement from GMAC Finance, so they approached the company and asked for help, but were refused. A spokeswoman for GMAC has declined to explain why the couple was denied financial help. “GMAC understands the extent of its legal obligations under the Consumer Credit Act and intends to continue to honour them,” says a spokeswoman.
Just before its collapse, Saab was selling cars through 58 dealerships – 20 of which were Saab-only sites. Two – Saab City and Fulham – are no longer trading, according to Thornton.
If you bought a car from a dealer that has not gone under, all is not lost. The Sale of Goods Act makes the dealer responsible for problems with the car – potentially for up to six years in England and Wales. Different rules apply in Scotland, but have broadly the same effect.
Which? Legal Services says the Sale of Goods act states goods have to be of “satisfactory quality, fit for their purpose, and durable”.
“If the defect occurs within the first six months after sale, it is presumed the defect existed at the time of purchase, unless the retailer proves otherwise. This burden shifts after six months so then it becomes the consumer who has to prove this and that the defect has not occurred as a result of, say, misuse,” it says.
This leaves those with three-year warranties relying on the goodwill of the supplying dealer.
We rang two dealers, Phoenix Saab in Wimbledon and the Whitequay Group, in Reading, Berkshire. Both told Money they would help customers who had bought their new Saabs from them.
However, some buyers can expect a tough time persuading their dealer to pay up for repairs for, say, a two-and-a-half-year-old car. Saabs tend to be expensive to fix, and the car trade isn’t known for going the extra mile when disputes are not clear cut.
Be aware that if you bought the car on finance this gives you extra protection. Which? Legal Services says: “Goods purchased on hire purchase are protected by the Supply of Goods (Implied Terms) Act 1973. In effect, the car is purchased from the finance company and therefore any claim for breach of contract is directly with the finance company, not the garage.”
Meanwhile, if you have an older Saab, there is better news. Saab’s parts businesses are still trading and providing parts. Also, insurance-backed warranties sold on used cars are also likely to be unaffected – but check with the provider.