Supply Chain Disruptions Impact Automotive Repairs
At its January 27, 2022 meeting, the Bureau of Automotive Repair (BAR) Advisory Group discussed the issue of supply chain disruptions negatively impacting the automotive repair industry. Delays in obtaining parts for collision repairs can extend repair times by several weeks or even months. In working with automotive repair dealers (ARDs) to provide guidance on handling these disruptions, BAR has found that each situation is unique making it difficult to develop one set of recommendations to cover all possibilities. Here are some frequently asked questions to help licensees comply with the Automotive Repair Act while dealing with the complications of repair part delays.
If there is a significant delay in getting parts for a repair, should an ARD hold the vehicle or return it to the customer?
If an ARD is unable to obtain the necessary parts in a timely manner, the ARD should work with the customer to determine if it is in the best interest of both parties for the ARD to release the vehicle in an incomplete condition or keep a vehicle while waiting for delivery of the delayed parts.
What are the requirements if a customer requests that the ARD return the vehicle to them without the repairs completed?
If the customer and ARD agree to return the vehicle to the customer in an incomplete condition, the ARD must:
Obtain and document the customer’s authorization for the change in the method of repair. (Title 16, California Code of Regulations (CCR) section 3354(b))
Ensure that the invoice accurately reflects any repairs completed prior to returning the vehicle to the customer. (Business and Professions Code (BPC) section 9884.8, CCR section 3356(c)(1))
Adjust the total cost listed on the invoice to reflect all parts and labor for any services and repairs performed. (BPC section 9884.8, CCR section 3356(c)(6))
What if an insurance company is involved in the repair transaction?
If an insurance company is involved in the transaction, and the ARD is paid in full for the contracted repairs, the ARD must notify the insurance company of the decision to release the vehicle to the customer with the repairs incomplete. This may result in the insurance company generating a negative supplemental estimate revision for incomplete collision repairs.
How should an ARD inform the customer about shipment delays and estimated receipt dates for parts?
It is expected that the ARD will notify the customer (and the insurance company, if applicable) of the projected date the delayed parts will arrive. The customer may return at that time to have the repairs completed as initially authorized. To avoid any misunderstanding, it is recommended that the estimated receipt date for parts is recorded on the estimate and invoice.
If an originally authorized Original Equipment Manufacturer (OEM) part is not available can a non-OEM part be used?
If the customer and ARD agree on changing the method of repair by installing a non-OEM part, the ARD must:
Obtain and document the customer’s authorization for the change in the method of repair. (CCR section 3354)
Ensure that the invoice accurately reflects the work performed and parts supplied. (BPC section 9884.8, CCR section 3356(c)(1))
If applicable, adjust the total cost listed on the invoice to reflect the change in the method of repair. (BPC section 9884.8, CCR section 3356(c)(6))
If an insurance company is involved in the transaction, the ARD must also notify the insurance company of the change in method of repair. (BPC section 9884.8, CCR section 3356(c)(6))
Are there any document requirements when a customer returns to have repairs completed?
When a customer returns to have the repairs completed, the ARD must provide the customer with a new estimate, obtain the customer’s authorization, and provide the customer with an invoice upon completion of those contracted repairs. (BPC sections 9884.9(a) and 9884.8)
Can an ARD charge storage fees if the vehicle remains at a repair facility until repair parts are available?
If the customer and ARD agree that the vehicle will remain at the repair facility while waiting for delayed parts, the status of the vehicle repair is considered incomplete. As such, the ARD cannot charge storage fees while awaiting the delivery of the parts. In addition, an ARD cannot charge storage fees while the vehicle is undergoing repairs. (Owens v. Pyeatt, 248 Cal. App. 2d 840 (1967))
Documenting the repair process, including repair delays, and customer authorizations can assist ARDs in complying with the Automotive Repair Act and help avoid consumer complaints. ARDs can refer to the Write It Right guide to assist them in documentation requirements and other legal obligations related to automotive repair transactions.