Published January 5, 2024 | Updated January 20, 2024
As of January 1, 2024, California Assembly Bill 1263 empowers the Bureau of Automotive Repair (BAR) to regulate storage fees charged by auto repair shops, aligning with the Vehicle Code (VC), Civil Code (CC), and California Department of Insurance (CDI) regulations. These regulations aim to protect consumers and ensure industry compliance through clear guidelines developed with input from stakeholders. To assist consumers, repair shops, and insurance companies during this regulatory process, Car Repair Online offers guidance on common storage fee issues based on consumer complaints received by BAR.
Navigating Storage Fees at Auto Repair Dealers
When Can a Car Repair Shop Charge Storage Fees?
Yes, auto repair dealers can charge reasonable storage fees once a lien has been established under these conditions:
- If the vehicle is towed and stored at the repair facility due to an accident or vehicle recovery. (VC § 22524.5)
- After contracted repairs (those on the estimate authorized by the customer) are completed and the invoice is given to the customer, or 15 days after repair completion, whichever comes first. (CC § 3068)
Furthermore, storage fees can apply after a visual inspection or tear down if the customer declines the repair estimate and does not retrieve the vehicle within a specified period. (CC § 3068, California Code of Regulations (CCR) § 3353(c)). While not mandatory, including this timeframe and potential storage fees on the inspection or tear down estimate is recommended as a best practice.
IMPORTANT NOTES:
- A valid auto repair dealer registration is required to enforce a lien for labor or materials, including storage fees, or to legally pursue repair contract disputes. (Business and Professions Code (BPC) § 9884.16)
- California’s Fair Claims Settlement Practices Regulations, enforced by CDI, mandate insurers to inspect vehicles within six business days of a claim notice or supplemental estimate request. (CCR, title 10, § 2695.8(e)(4))
See Working with insurers for more details.
Learn more about storage fee regulations and consumer rights in California car repair.
When are Storage Fees Prohibited by Auto Repair Shops?
Auto repair dealers are not permitted to charge storage fees in the following situations:
- During the Repair Process: Storage fees cannot accumulate while the vehicle is being actively repaired. Fees can only start after all customer-approved repairs are finished and the customer is notified their vehicle is ready for pickup. (Owens v. Pyeatt, 248 Cal. App. 2d 840 (1967))
- During a Tear Down: A tear down (disassembly to assess vehicle condition) is considered part of the repair process. Therefore, storage fees cannot begin until the tear down is complete, and an itemized repair estimate based on the tear down is provided. Storage fees may apply if the customer declines repairs or fails to pick up the vehicle within a stated timeframe after receiving the tear-down estimate. Including this timeframe on the tear down estimate is a recommended best practice. (CCR § 3353(c))
What Constitutes Reasonable Storage Rates and Fees?
Storage rates and fees are deemed reasonable if they are in line with rates and fees charged by similar auto repair businesses in the same local area. (VC § 22524.5(c)(2)(B))
Find out more about typical and fair rates for towing and storage services in your region.
What Storage Rates and Fees are Considered Unreasonable?
The following fees are presumed to be unreasonable and therefore unlawful:
- Administrative or filing fees (except for DMV documentation and lien sale related fees)
- Security fees
- Dolly fees
- Load and unload fees
- Pull-out fees
- Gate fees (unless the vehicle owner or insurer requests vehicle release outside of regular business hours) (VC § 22524.5(c)(3))
When Does a Lien Officially Occur?
A lien is established in these situations:
- Upon completion of the contracted repairs and when the invoice is provided to the customer, or 15 days after repairs are finished (e.g., if the repair shop loses contact with the customer), whichever happens first. The repair shop has 30 days from the lien date to apply to the DMV for lien sale authorization. (CC §§ 3068(a) and (b), 3071)
- When the auto repair dealer takes possession of a vehicle for towing and/or storage before any repair agreement. In this case, DMV lien sale authorization depends on the vehicle’s value. (CC §§ 3068.1, 3071, 3072) For details on lien sales, visit www.dmv.ca.gov.
A valid auto repair dealer registration is essential to benefit from any lien for labor or materials, including storage fee collection, and to legally pursue repair contract disputes. (BPC § 9884.16)
Towing and Storage Service Fee Guidelines
What are Acceptable Towing and Storage Rates and Fees?
When an auto repair dealer both tows and stores a vehicle, the combined towing and storage fees 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. (VC § 22524.5(c)(2)(A))
Can Towing Services be Included in a Repair Estimate if the Shop Tows and Repairs?
No. If a customer agrees to towing services in writing, this authorization must be on a separate form, not part of the repair estimate. (VC § 22651.07(e))
Is an Invoice Required for Towing and/or Storage Services?
Yes. An itemized invoice for towing and/or storage services must be provided to the customer. (VC §§ 22651.07(b) and (e))
Is a Towing and Storage Fees Notice Required for Towing Services?
Yes, if an auto repair dealer offers towing, they must display the “Towing and Storage Fees and Access Notice” in a public area of their facility (VC § 22651.07(a)(1)(A)) and have copies available. Invoices must also state that copies of this notice are available upon request. (VC § 22651.07(a)(3))
Working Effectively with Insurers
What if a Repair Shop Declines to Repair a Vehicle?
If a repair shop deems a vehicle a total loss and refuses repairs (including tear down) but agrees to store it, the transaction falls under Vehicle Code and Civil Code provisions regarding storage and lien sales. (VC § 22524.5 and CC §§ 3068.1, 3071)
What if an Insurer Delays Vehicle Inspection?
According to California Fair Claims Settlement Practices Regulations, insurers must inspect a vehicle within six business days of a claim notice or supplemental estimate request if they choose to inspect. Delay beyond this period allows the consumer or repair shop to file a complaint with CDI. (CCR, title 10, § 2695.8(e)(4)(B))
For further information, visit www.insurance.ca.gov.
What if Total Loss Vehicle Retrieval is Delayed?
If repairs, including tear down, begin and the vehicle is later declared a total loss, storage fees can only start accumulating after the customer is notified that authorized repairs are complete and the total loss vehicle is ready for pickup. (Owens v. Pyeatt, 248 Cal. App. 2d 840 (1967))
Who Pays Storage Fees in Insurance Claims?
If a claimant’s auto insurance policy covers storage charges, the insurer is responsible for reasonable storage fees resulting from an accident or stolen vehicle recovery. Payment may go to the repair shop, the insured, or the claimant (if not at fault). (VC § 22524.5(a))
Navigate insurance claims smoothly by understanding storage fee responsibilities and coverage.
Resolving Storage Fee Issues and Complaints
How Does BAR Handle Storage Fee Complaints?
BAR investigates and mediates consumer complaints about storage fees from auto repair dealers. Consumers unable to resolve issues directly with the repair shop are encouraged to file a complaint with BAR.
BAR also accepts referrals from insurers regarding storage-related issues via email at [email protected]. BAR mediates to find fair and timely resolutions. If storage rates and fees are deemed reasonable, BAR informs the insurer and closes the case.
How Can Auto Repair Dealers Prevent Storage Fee Disputes?
Clear and frequent communication with customers, documented on work orders and invoices, is key to preventing storage fee disputes. Maintaining detailed records of communication can significantly reduce misunderstandings and disagreements.
