California BAR Advances Regulations on Teardown and Storage Fees in Auto Repairs

The California Bureau of Automotive Repair (BAR) recently conducted a case study highlighting common complaints about teardown and storage fees from collision repair shops and auto insurers. BAR is in the process of advancing regulatory proposals related to teardown disclosures, storage fees, and towing fees, with upcoming opportunities for public comment. Repair shops have expressed concerns that the proposed storage regulations may not hold insurance companies accountable for delays in repair authorizations, which often result in increased storage fees deducted from customer payments.

During an April 24 BAR Advisory Group meeting, Deputy Chief Bill Thomas of the Field Operations and Enforcement Division shared findings from the case study. One example illustrated a 10-day delay from when a shop informed an insurer that a vehicle was a total loss to requesting release of the vehicle by its owner. BAR observed that the repair shop should have started charging storage fees earlier, as the insurer acknowledged the vehicle was not going to be repaired after three days. However, the transaction was converted from storage to repair charges incorrectly, resulting in disputed fees.

BAR emphasized that repair orders must be consumer-authorized to initiate repair charges, and without signed authorization, the vehicle remains under storage, not repair. This confusion between storage and repair transactions frequently leads to complaints. BAR also noted discrepancies in daily storage fee rates charged by shops compared to insurer expectations, recognizing that such differences may prompt regulatory action. In this case, improper fee charges were considered consumer harm potentially warranting enforcement.

The regulatory proposals aim to formalize market-based storage rates and require automotive repair dealers to notify consumers promptly when a vehicle is deemed non-repairable and storage fees will begin. The new storage rules would establish a minimum three-day grace period post-teardown before storage fees start and compel shops to use public storage or towing rates if repairs are not completed.

These measures follow the enactment of AB1263, which granted BAR authority to regulate storage fees, codify prior guidance, and unify related laws to improve transparency and consumer protection. The proposed teardown disclosure regulations are expected to increase clarity and accountability in the auto repair and insurance sectors. The case study underscores ongoing industry challenges around authorization delays, fee disputes, and regulatory compliance in the collision repair market.