Repair transaction fees
At its core, the Automotive Repair Act establishes disclosure requirements for automotive repair transactions. This includes:
- Providing the consumer an estimate that details the price for all parts and labor.
- Obtaining authorization from the consumer before beginning any repairs.
- Providing the consumer an invoice showing the final price for parts and labor after all repairs are complete.
The Bureau of Automotive Repair (BAR) recognizes that evolving transaction practices have led to additional overhead for automotive repair dealers (ARDs). However, ARDs may not charge general fees to cover their costs. Rather, any fees charged must be directly related to the repair work or the payment method and must be disclosed to the consumer in compliance with applicable laws and regulations.
Electronic transmission fees
Smog Check and vehicle safety systems inspection stations are charged an electronic transmission (ET) fee for each official inspection performed. The ET fee covers the cost of communication between the station’s inspection equipment and the California Vehicle Inspection System (Cal-VIS) database. Since the electronic transmission is a mandatory part of the Smog Check and vehicle safety systems inspection, stations are not permitted to charge a separate ET fee. Instead, the ET fee must be included in the total cost of the inspection.
Toxic waste and hazardous material fees
Most automotive fluids contain hazardous substances and are classified as toxic waste. In addition, many automotive components contain hazardous substances. California Code of Regulations (CCR), title 16, section 3357 permits ARDs to charge a customer the costs associated with the handling, management, and disposal of toxic waste and hazardous substances, providing they are directly related to the servicing or repair of the customer’s vehicle. This means the charge must only apply to the toxic waste or hazardous materials generated from service(s) performed on a specific customer’s vehicle. ARDs are not permitted to charge a general toxic waste or hazardous materials fee to all customers.
Credit card processing fees
Credit card processing fees are a common expense for retail businesses, usually calculated as a percentage of the transaction amount. To account for this expense, many ARDs charge a credit card processing fee when the customer uses a credit card to pay their bill. Senate Bill 478, effective July 1, 2024, amends California Civil Code section 1770(a)(29) making it unlawful to advertise, display, or offer a price for a good or service that does not include all mandatory fees or charges. Exceptions are limited to government-imposed fees or taxes and postage or shipping costs incurred in transporting goods to a consumer. This is consistent with CCR section 3356(g) which states that separate billing in an invoice for items generically noted as shop supplies, miscellaneous parts, fees for electronic communication with the Smog Check database, and the like, is prohibited. Additionally, Business and Professions Code section 9884.9(a) states, “no work shall be done and no charges shall accrue before authorization to proceed is obtained from the customer.” This means that the customer must be informed of any credit card processing fees prior to the ARD obtaining authorization to perform repairs.
In summary
ET fees are an integral part of Smog Check and vehicle safety systems inspections and must be included in the overall inspection cost. Toxic waste and hazardous material fees can be charged to the customer but only if they are directly related to the repairs performed on the customer’s vehicle. Credit card processing fees must be included in all advertising, price displays, and estimates.
BAR supports ARDs recouping operating expenses as long as they comply with all applicable laws and regulations. For more information about automotive repair estimates and invoices, see Write It Right.