The Importance of Documentation: A Repair Authorization Case Study

Automotive repair dealers (ARDs) have a responsibility and an obligation to comply with the Automotive Repair Act and related laws and regulations. Keeping the customer informed, providing estimates and invoices, performing only repairs authorized by the customer, and maintaining records of all repairs performed and parts supplied is not only essential for compliance, but it also prevents consumer complaints and promotes customer confidence, trust, and repeat business. Following is an overview of documentation requirements and a case study emphasizing the importance of complying with these requirements to help avoid consumer complaints.

Documentation Requirements

Before beginning any repairs, the ARD is required to provide customers a paper or electronic estimate detailing the scope of repairs and containing the estimated price for parts and labor. The ARD must then obtain customer authorization in written, oral, or electronic form and record the authorization on the estimate.

  • Written authorization consists of the customer’s signature and date of signature.

  • Oral authorization consists of the date, time, name of the person authorizing the repairs, and telephone number called, if any.

  • Electronic authorization consists of the date, time, name of the person authorizing the repairs, and email address or phone number (including for text messaging) contacted, if any.

The ARD must provide the customer a copy of any document requiring the customer’s signature, at the time of signing. Upon completion of all repairs, the ARD must provide a paper or electronic invoice, containing the final price for parts and labor, to the customer.

Unusual Circumstances and Additional Authorization

Sometimes a vehicle may be dropped off to an ARD for repair outside of regular business hours or without the customer present. Examples of this include a customer leaving the vehicle at the ARD using an “after hours” key drop or a vehicle delivered to an ARD by tow truck and unaccompanied by the customer. These situations are considered unusual circumstances but still require the ARD to prepare an estimate and obtain and record the customer’s authorization before proceeding with repairs.

Teardown Estimates

In situations where a vehicle or its components require disassembly before a full diagnosis of the repair issue can be made, a teardown estimate is required. Teardown estimates must include the same information as a standard estimate as well as:

  • The cost of reassembling the vehicle or component.

  • The cost of all parts and labor necessary to replace items that are normally destroyed during teardown (e.g., gaskets, seals, and O rings).

  • Notification that the vehicle or component teardown may prevent the vehicle or component from being restored to the condition in which the ARD received it.

  • Notification of the maximum time it will take to reassemble the vehicle or component.

If additional work beyond the original estimate is needed, or before any additional charges accrue, the ARD must prepare a revised work order and obtain and record the customer’s authorization.

Repair Authorization Case Study

In July 2021, the Bureau of Automotive Repair (BAR) received a consumer complaint alleging an ARD had charged the consumer for a wheel bearing assembly replacement that the consumer did not authorize. A BAR program representative began an investigation.

The program representative contacted the consumer, then conducted a visit to the repair shop to obtain statements and collect documentation from the ARD. The ARD stated that the consumer had dropped off the vehicle before normal business hours and filled out an “early bird” envelope authorizing the shop to begin diagnosing a leaking pinion seal. After confirming the pinion seal leak, the ARD determined the cause was loose pinion bearings in the differential. The ARD contacted the consumer by telephone and provided an estimate for a teardown of the differential assembly to inspect the pinion bearings and to look for any other problems. The consumer gave an oral authorization for the work.

During the reassembly of the differential, a wheel bearing bolt broke. The ARD determined it was necessary to replace the wheel bearing assembly to complete the job. The ARD did not inform the consumer about the need to replace the wheel bearing assembly at the time of repair but did list it on the invoice. The ARD claimed the consumer implied authorization for the wheel bearing replacement by paying the invoice.

After reviewing the paperwork provided by the consumer and the ARD, the BAR program representative was able to confirm the consumer’s allegations of unauthorized repairs and determined the facility failed to: (1) properly record the unusual circumstance authorization (“early bird” drop-off); and (2) comply with additional authorization requirements to replace the wheel bearing assembly. Therefore, it was determined that the shop was not entitled to the full amount paid by the consumer.

The program representative reviewed his findings with the ARD and made recommendations to resolve the complaint. The ARD offered to comply with the consumer’s request to refund the cost of labor and parts for the wheel bearing assembly. The ARD also agreed to correct their estimate and authorization practices. The outcome was a resolution with which the consumer was satisfied and the ARD received instruction on estimate and authorization requirements that should prove helpful in future transactions. The program representative prepared a report of the complaint investigation and submitted it for filing in the licensee’s master file.

ARDs can help avoid consumer complaints by taking the time to properly document all steps of the repair process from intake to repair authorization and invoicing. An outline of the specific requirements for estimates, authorizations, and invoicing is available in BAR’s Write It Right guide or by referencing Title 16, California Code of Regulations, sections 3352-3359. ARDs who want to ensure that they and their employees understand automotive repair laws and regulations can contact their local BAR field office to schedule a Write It Right presentation.

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