Automotive repair act overhaul

Using modern technology to communicate with your repair customers

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New rules, effective September 13, 2018, have modernized how your service department can provide and receive approval for repair estimates and additional work requests. The new rules also allow you to provide updates on and store work order and authorization information electronically.

The state legislature adopted the original Automotive Repair Act in 1971. The legislation required dealers to maintain physical written documents and obtain customer signatures to prove what work customers had actually authorized. The Bureau of Automotive Repair then adopted regulations detailing how repair orders and repair authorizations. The new rules update the original regulations and are better adapted for how service departments and customers communicate in the 21st century. They are an improvement for dealers, who now have more options in discussing important repair decisions with customers through text, email, and other electronic means. However, dealers still need to ensure that their electronic practices are consistent with the new rules and with the sections of the Automotive Repair Act that have not changed.

Overview of the changes:

  • Repair dealers can now provide customers with electronic estimates, work orders, and invoices, rather than having to hand write or print these documents.
  • Customer authorization for initial estimates and for additional work is no longer limited to a written signature.
    • “Authorization” now means a customer’s consent expressed in any of the following ways: a written signature, an oral statement, or an electronic statement, all of which must authorize “a specific job.”

 

  • “Oral communication” and authorization is no longer limited to in person or telephonic communications.
    • Dealers can now use any other form of electronic voice communication technology (e.g., video conference apps).

 

  • Dealers can store initial and additional estimates and authorizations, work orders, and invoices electronically, not just in written form.
    • All records must be legible and maintained for at least three years.
    • All records associated with a specific transaction, including customer authorizations (even via text) must have a unique identifier linking the records to that transaction (i.e., be stored in a written or electronic file with a unique number designated for that transaction).

Other important provisions to consider:

  • Oral authorizations (in person or via telephone or other voice technology), and electronic authorizations, require the repair dealer to document the following on the estimate:
    • The date, time, name of the person authorizing the repairs,
    • The telephone number or email address contacted (as applicable),
    • “or produce this information on documents relating to the authorization that supplement the estimate.”
  • Documents supplementing an estimate, including electronic communications between the repair dealer and customer to obtain authorization for additional repairs “shall be uniquely identified and maintained as part of the same transaction”
    • For example, if a dealer provides an updated estimate via text and a customer texts back with authorization to perform additional work, the text messages should be separately stored with the transaction file (via printing them and adding them to a written file or storing them in the same electronic transaction file).
    • It would not be appropriate to provide an additional estimate via text, obtain a customer’s authorization via text, and merely leave all of the messages on the phone or texting app that was used to communicate with the customer.
  • The customer must still authorize an estimate before any work commences, or additional work is performed, regardless of the format of the estimate, and the format of the customer’s “authorization” (i.e., written, oral, or electronic).
  • Each part listed on an estimate must be a new part, unless you identify it as “used,” “rebuilt,” or “reconditioned.
    • For auto body / collision repairs, new replacement crash parts must be OEM unless specifically identified as a non-OEM aftermarket crash part.

This article addresses some preliminary considerations in modernizing your service department to comply with the updated law. Please note that the article does not address each of the new law’s changes, such as the new language provided for final invoices. See, Vehicle Code § 3356, and contact your document services provider to ensure that your invoices are compliant. We recommend consulting with experienced legal counsel on the application of these laws to your service department’s policies and practices, including updates to how you document oral and electronic customer communications to ensure that these non-written communications are property stored with other relevant transaction documents as required by the new law.