California’s Bureau of Automotive Repair continues the push for new regulations on towing and storage fees that repair businesses -- including body shops and collision centers -- can charge customers. The effort connects with other states revising their rules.
BAR could complete its review within a year. Its next public workshop in Sacramento -- also accessible online via webcast -- is expected in mid-October, Jack Molodanof wrote in an email, after previous such meetings in April and July.
Molodanof, a business law attorney and lobbyist on automotive and body shop issues, told Autobody News in an interview, “This is kind of a big deal for California shops.”
This process doesn’t require new legislation. BAR materials said its administrative actions “bring together and clarify existing statutes governing storage and towing fees” in AB 1263, enacted in 2023.
“They can just set” new regulations after the review and public comment, Molodanof said.
Proposed California Auto Storage Fee Regulations
Autobody News reported on the April public workshop here.
Jack Molodanof.
July’s meeting began with a presentation by Mathew Gibson, of BAR’s executive offices, showing proposed new regulations would require shops to set a storage rate and maintain it unchanged for one year; get guidance on setting towing and storage rates; provide access to stored vehicles; not charge storage fees while cars are repaired; present an itemized list of storage fees charged; and require vehicles be stored at the shop’s place of business or meet guidelines when storing it somewhere else.
Molodanof said in the workshop that requiring shops to maintain the same rate for a year would be “unreasonable” because of varying factors throughout the year -- labor, rent, insurance -- that could affect this.
Discussion that followed suggested BAR’s aim on this element involved stability and standardization to keep rates from changing often, and that it would be open to more discussion on this point.
Exchanges also touched on what it could mean for shops to charge “comparable” rates relative to a geographic location, and differing economics between straight storage facilities and body shops that, as part of their larger work, must store cars.
“A storage area is not a place I want to have, but it’s a place I need to keep,” Gary Hernandez, who owns Martinez Auto Body in Martinez, CA, told the workshop. He said he had to buy residentially zoned land to store vehicles for “excess work or a [project] waiting for parts” to arrive.
“The economics of my business are so, so much different,” than a storage facility, he said.
He said if a body shop sets rates “below the average, nobody [will say] anything to you” about fees being too low, but “if you’re above the average you need to come [down].”
Possible Consequences of New Regulations
Hernandez said this would steadily bring average rates down, meaning shops would have to regularly lower their fees.
He also noted insurance company influence on storage fees: “Insurers will say, ‘Well, you can’t charge that, because the guy down the street charges less.'"
Insurance company involvement was also the focus of social media chatter on storage rates, with a California commenter in an auto body shop owners group on Facebook suggesting such companies were behind the push for fee caps. Reddit threads also discuss the issue.
Another possible driver: predatory practices by some companies relative to towing and storage.
Several years ago, a local scandal erupted in Chicago, where towing and storage practices by some companies were said to be aimed not at keeping traffic flowing but at ripping off vehicle owners.
A Colorado law that took effect in August restrains similar practices there.
Major Changes Could Be Ahead
Molodanof wrote in a summary of the workshop for Autobody News that proposed regulations “will make major changes to how shops can charge” for towing and storage.
Storage rates will be based on “specified factors” rather than, for instance, competitive practice.
“Shops that perform no repairs will only be able to charge storage fees” comparable to local law enforcement. “In other words, a shop will not be able to charge its regular storage rate but instead will be ‘capped’ … if no teardown or repairs are performed” by the facility.
“Why am I capped on rates?” Molodanof asked in an interview. “I pay for my square footage.”
Other issues include calculating storage fees and shops being dinged by BAR for “unreasonable” rates.
“Many concerns were raised,” he wrote.
Paul Hughes