Core Charges Explained
In the auto repair industry, there is often confusion about what a core charge is and when it is applied. Here are some frequently asked questions to help licensees understand and educate consumers about core charges.
What is a core auto part?
A core auto part is a part or a component of an auto part that can be rebuilt and sold as a remanufactured part or a part that can be recycled for its materials. Common core parts may include batteries, water pumps, alternators, brake master cylinders, and air conditioning compressors. The return of core parts to the manufacturer lowers the cost of the auto parts and related auto repairs and keeps hazardous materials out of landfills.
What is a core charge?
A core charge is a form of deposit held for the return of the used part. Core charges are set by the manufacturer or supplier and are based on the value of the materials in the part or the reusability of the old part. The core charge is added to the price of a part to encourage the return of the old part.
Is there a core charge on both new parts and remanufactured parts?
There may be core charges on remanufactured parts as well as new parts since the materials and the core part itself have value to the manufacturer regardless of whether the replacement part is new or remanufactured.
What if the old core part is damaged beyond repair?
Many auto parts carry a core charge regardless of the usefulness or perceived value of the old part. For example, replacement batteries, turbo chargers, and bumper covers often have a core charge added to the price even if the original part is damaged well beyond the possibility of rebuilding.
Is a customer exempt from a core charge if a core part is missing or stolen?
If a core part is missing or stolen, the customer is still responsible for payment of the core charge when purchasing a replacement part.
Do I need to inform the customer about the core charge or include it on the estimate?
Along with the list of all parts used and auto repair charges, the core charge must be disclosed to the customer and separately itemized on the estimate.
What if the customer wants to keep the old core part?
The customer may request to have the old core part returned to them. Parts that are sold on an exchange basis and parts that must go back to the supplier under a warranty or core arrangement (such as a battery) are not required to be returned to the customer. In these circumstances, the customer must be offered the opportunity to see the replaced parts. Any replaced parts that cannot be returned to the customer must be recorded on the invoice
For more information on estimates and invoices involving core charges and keeping the customer informed, review BAR’s Write It Right guide.