Navigating car repairs can be stressful, and unexpected charges can add to the confusion. One common area of concern for vehicle owners is storage fees at auto repair shops. It’s essential to understand when and why these fees can be applied to avoid surprises and ensure a fair service experience. This guide clarifies the rules surrounding auto repair storage fees, helping both consumers and auto repair professionals understand their rights and responsibilities.
When Can an Auto Repair Shop Charge Storage Fees?
Yes, auto repair businesses has auto repair and can legally charge storage fees under specific circumstances. These fees must be reasonable and are typically applied after a legal claim, known as a lien, has been established on the vehicle. A lien essentially secures the repair shop’s right to payment for services rendered. Storage fees become applicable in the following situations:
- Post-Accident or Vehicle Recovery Storage: If your vehicle is towed and stored at a repair facility due to an accident or after being recovered from theft, storage fees can be charged. This is recognized under Vehicle Code § 22524.5.
- Completion of Authorized Repairs: Once the repairs you agreed to (those detailed in the initial estimate and authorized by you) are finished, and you’ve been provided with the invoice, storage fees can begin to accrue. Alternatively, fees can start 15 days after repair completion, whichever comes first. This is governed by Civil Code § 3068.
- Post-Inspection or Tear Down (If Repairs Not Authorized): Following a visual inspection or partial disassembly (tear down) to diagnose the problem, the repair shop will provide a repair estimate. If you decide not to proceed with the repairs, or if you don’t collect your vehicle within a reasonable timeframe after receiving the estimate, storage fees can be applied. California Code of Regulations (CCR) § 3353(c) outlines this. It’s good practice for repair shops to clearly state this timeframe and potential storage fees on the initial inspection or tear down estimate.
Important Points to Remember:
- Valid Auto Repair Dealer Registration is Mandatory: For an auto repair business to legally enforce a lien and charge storage fees, they must possess a valid Automotive Repair Dealer registration. Without this registration, they cannot claim a lien for labor or materials, including storage, or legally pursue a repair contract (Business and Professions Code (BPC) § 9884.16).
- Insurance Inspections Have Time Limits: California’s Fair Claims Settlement Practices Regulations, enforced by the California Department of Insurance (CDI), mandate that insurance companies must inspect a vehicle within six business days of receiving a claim notice or a request for a supplemental estimate (CCR, title 10, § 2695.8(e)(4)). Delays in inspection can impact storage fee responsibilities, which we’ll discuss further in the “Working with Insurers” section.
When Are Storage Fees NOT Permitted?
There are clear situations where auto repair facilities are not allowed to charge storage fees:
- During Active Repairs: Storage fees cannot be charged while your vehicle is undergoing the repairs you have authorized. Fees can only start accumulating after all agreed-upon repairs are completed and you’ve been notified that your car is ready for pickup. This principle was affirmed in the legal case Owens v. Pyeatt, 248 Cal. App. 2d 840 (1967).
- During Tear Down for Estimate: Similar to active repairs, storage fees are not permissible while the shop is disassembling parts of your vehicle to provide a repair estimate. Tear down is considered part of the repair process itself. Storage fees can only commence if you decline the repair estimate provided after the tear down, and you fail to retrieve your vehicle within a specified period following the estimate. Again, specifying this timeframe on the tear down estimate is a recommended best practice (CCR § 3353(c)).
What Constitutes “Reasonable” Storage Fees?
The definition of “reasonable” storage fees is crucial. A storage rate is considered reasonable if it aligns with what other auto repair businesses in the same geographic and demographic area charge for similar storage services (Vehicle Code § 22524.5(c)(2)(B)). Essentially, the fees should be competitive with local market rates.
What Storage Fees Are Considered “Unreasonable”?
Certain types of fees are presumptively considered unreasonable and are therefore disallowed. These include:
- Administrative or Filing Fees (with limited exceptions): General administrative or filing fees are unreasonable, except for those directly related to DMV documentation or the lien sale process.
- Security Fees: Charges for general vehicle security are not permissible as storage fees.
- Dolly Fees, Load and Unload Fees, Pull-Out Fees: These fees, often associated with moving or accessing the vehicle within the storage area, are considered unreasonable storage charges.
- Gate Fees (with a specific exception): Gate fees are generally unreasonable unless you, or your insurer, specifically request vehicle release outside of the repair shop’s regular business hours (Vehicle Code § 22524.5(c)(3)).
Understanding Vehicle Liens in Auto Repair
A lien is a legal right that allows a repair shop to secure payment for services rendered. Understanding when a lien occurs is key to understanding when storage fees can begin:
- Lien After Repair Completion: A lien is established when the contracted repairs are completed, and the invoice is presented to you. If contact is lost with the customer, a lien also arises 15 days after repair completion. The repair shop then has 30 days from the lien date to apply to the DMV for authorization to conduct a lien sale if necessary (Civil Code §§ 3068(a) and (b), 3071).
- Lien for Towing and Storage (Prior to Repairs): If the repair shop initially takes possession of your vehicle for towing and/or storage before any repair agreement, a lien is also created. The process for a lien sale in this situation depends on the vehicle’s value (Civil Code §§ 3068.1, 3071, 3072). More information on lien sales can be found on the DMV website.
Remember, a valid auto repair dealer registration is necessary for a business to enforce any lien for labor or materials, including storage fees, or to legally pursue a repair contract (BPC § 9884.16).
Towing and Storage Rate Reasonableness
When an auto repair shop provides both towing and storage services, the combined charges are considered reasonable if they do not exceed the rates charged for similar services requested by public agencies like the California Highway Patrol or local police departments (Vehicle Code § 22524.5(c)(2)(A)). This sets a benchmark based on publicly regulated towing and storage rates.
It’s important to note that if towing is required in conjunction with repairs, the authorization for towing services must be documented on a separate form, distinct from the repair estimate itself (Vehicle Code § 22651.07(e)).
Repair shops providing towing and/or storage are also legally obligated to provide you with an itemized invoice detailing these charges (Vehicle Code §§ 22651.07(b) and (e)). Furthermore, they must display a “Towing and Storage Fees and Access Notice” in a public area of their facility and have copies available for customers (Vehicle Code § 22651.07(a)(1)(A) and (a)(3)).
Navigating Storage Fees with Insurance Claims
Insurance claims can complicate the issue of storage fees. Here’s a breakdown of common scenarios:
- Shop Declines to Repair (Total Loss): If a repair shop deems your vehicle a total loss and refuses to perform repairs (or even a tear down), but agrees to store the vehicle, the situation falls under Vehicle Code and Civil Code provisions related to storage and lien sales (VC § 22524.5 and CC §§ 3068.1, 3071).
- Insurer Inspection Delays: As mentioned earlier, insurers have a limited timeframe for vehicle inspection (six business days). If an insurer delays inspection beyond this period, you or the repair shop can file a complaint with the CDI (CCR, title 10, § 2695.8(e)(4)(B)). Such delays can impact who is responsible for accruing storage fees.
- Delays in Total Loss Vehicle Retrieval: If repairs begin, including a tear down, and your vehicle is subsequently declared a total loss, storage fees can only start accruing after you are notified that the authorized repairs (or tear down) are complete and the total loss vehicle is ready for the insurance company to retrieve. Referencing Owens v. Pyeatt, 248 Cal. App. 2d 840 (1967), this clarifies that storage fees are not meant to cover the period while the insurance company processes the total loss claim and arranges vehicle pickup.
- Insurance Policy Coverage for Storage: If your auto insurance policy includes coverage for storage charges, your insurer is generally responsible for paying reasonable storage fees resulting from an accident or vehicle theft recovery. The insurer may pay the repair shop directly, you (the insured), or the claimant if you were not at fault (Vehicle Code § 22524.5(a)).
Resolving Storage Fee Disputes
If you believe you’ve been unfairly charged storage fees, here’s how to address the issue:
- BAR Complaint Process: The Bureau of Automotive Repair (BAR) investigates and mediates consumer complaints related to storage fees charged by auto repair dealers. If you cannot resolve your concerns directly with the repair shop’s management, you are encouraged to file a complaint with BAR.
- Insurer Referrals to BAR: Insurers also have the option to refer storage fee disputes to BAR. BAR will attempt to mediate a fair and timely resolution. If BAR determines the fees are reasonable, the insurer is informed, and BAR typically takes no further action.
Preventing Storage Fee Disputes:
Proactive communication is key to avoiding disagreements over storage fees. Repair shops can minimize disputes by maintaining open and frequent communication with customers and thoroughly documenting all communication on work orders and invoices. Clear communication from the outset about potential storage fees, especially in situations involving inspections, tear downs, or insurance claims, can prevent misunderstandings and ensure a smoother repair process.
By understanding these regulations and best practices, both consumers and auto repair businesses has auto repair can navigate the complexities of vehicle storage fees more effectively.
