Houston Rushes to Bury Auto Repair Shops in Red Tape
In the interest of protecting the consumer, the City of Houston is rushing to enact an ordinance to regulate the automotive repair and service industry. This would regulate every type of business that touches a car whether it’s a body shop, an independent auto repair shop, a dealership or a big store like Wal-Mart.
While this ordinance has good intentions, it paints the entire industry with one stroke. The proposed ordinance stems from an effort to eliminate a problem which comes from a small percentage of unscrupulous collision repair shops comprising one segment of the automotive repair trade. This attempt at a solution will wrap an already difficult business in more red tape.
Customer satisfaction is our top priority. As repair professionals we want to have a successful business, but we know to do that we have to do our jobs correctly, honestly, and quickly. This proposal to regulate our industry like recently passed laws to regulate others comes at an economically difficult time. It also sends the message to those of us that have been running an honest business that we are not to be trusted.
There are already state laws that automotive repair facilities abide by. For example, the State of Texas requires auto repair facilities to acquire two signatures to authorize work, operate the vehicle, and to inform consumers regarding the mechanic lien laws. Every day in Houston, in approximately 3000 auto repair facilities, technicians are changing oil, mounting tires, repairing transmissions, fixing brakes, performing state inspections, restoring wrecked vehicles to about 30,000 cars.
There are some good features for the consumer in this ordinance.
On the good side the ordinance will require all auto repair facilities in Houston to post their license number on their advertising and invoices so that the consumer will know who is and who is not a city licensed repair facility.
It will also require auto repair facilities to carry a minimum amount of liability insurance. Currently, there is no local or state law that requires a repair shop to have insurance. In an uninsured shop, the car owner is liable for anything the garage owner does with their car. Good shops already purchase insurance, but virtually all shops that lack integrity will also lack insurance.
Giving approval over the phone for any collision work will be illegal and limits will be placed on certain fees charged by collision shops. There is a good reason for this. Repairs resulting from accidents usually cost thousands of dollars. While we are hesitant to say that the city should set pricing for any private business transaction, we agree every approval for collision repair should be in writing.
The rest of the ordinance is pages and pages that regulate how records will be kept, how repair shops may gain approvals from customers and sets out penalties that can criminalize honest mistakes and rack up fines to benefit the City.
Here is some of what is proposed.
If this new law takes effect, phone approvals for mechanical work will be allowed only if the customer provides a third signature permitting an estimate either to be given orally, in person, or over the phone. Records of that approval have to be maintained for two years. Automotive professionals are concerned about this for a few reasons.
Our main concern is that if your car is towed in to a mechanical shop, we can’t even look at the car until you come in, fax or email a signature. If you are business owner with a fleet account, you will have to email, fax or come to the shop to give approval of authorization or to sign a waiver. This will slow down the repair process and be an inconvenience for everyone involved.
Mechanical work is entirely different from collision. It differs in that it’s quick, less costly, and customers depend on our efficiency so they can get back to and from home.
The City’s proposal will slow down this repair process. If it sounds complicated, it will be even worse when customers are confronted with the legalese. If they refuse to sign the waiver authorizing estimates by phone, the customer will have to return to the shop, find a fax machine or send an email.
While the Automotive Service Association (ASA) fully supports efforts to root out bad players in our industry, we believe this ordinance over-regulates and will be a burden to our customers who don’t own fax machines, e-mail or have a second car to come back to the shop for a signature, business customers who have fleets, and towed-in vehicles. This is going to affect senior citizens, the disabled, those with lower incomes, and those who depend on one vehicle the most.
Another provision is that no authorizations are required for repairs under $100. As long as your bill is $99.99, the repair shop does not need your permission to make repairs or perform maintenance on your vehicle. Our concern is that if you are dropping off your car for an oil change and the technician calls because he determines your coolant needs to be flushed, it will exceed a $100. Then, you will have a delay in repair if you did not sign the waiver–even though we still have the two signatures from the state. This provision seems unnecessary and could lead to confusion and abuse.
If a shop neglects to put the license plate number, vehicle identification number, or mileage on a work order, or records it inaccurately, it could result in a criminal misdemeanor with a $200 to $500 fine.
Why do the Mayor and some members of City Council feel this ordinance is needed?
The Automotive Service Association was told it was necessary because there were some bad body shops taking advantage of insurance companies, resulting in a rise of insurance premiums.
ASA requested information through an Open Records Request about the complaints so that as an industry, we could better understand what problems the city is trying to address. The complaints did indeed support that there are some bad players in the collision repair industry who are charging excessive disassembly fees, administrative fees, and are holding cars hostage. Over a three year period, we were given 257 complaints filed with the Houston Auto Dealers, a division of Houston Police Department that enforces automotive repair facility licenses. Of those, 61 complaints concerned excessive fees from collision shops—none from mechanical. It is a problem, but, “it’s like killing flies with cannon instead of a flyswatter,” as Councilmember Jolanda Jones said.
Lastly, there is the concern about increased costs of implementation that will be passed on to consumers. All our paperwork will have to change to comply. Not to mention all our fees and permits were increased this year. For example, in 2011 a Houston automotive repair facility license increased 147% from $200 to $495.
What do we recommend? Ideally, ask the city to create two separate automotive licenses: one issued to regulate the collision industry and another, simpler one, for the mechanical industry. Many at City Hall acknowledge that this would be a real fix, but there is a rush right now to pass the ordinance before the end of the year. What’s the rush? ASA has known about this proposal for less than a year, and we have been working diligently with the City to help them. The mayor has set the vote on December 21st, the last city council meeting of the year.
The Automotive Service Association wants City Hall to slow down, listen to both industry and consumers and do it right the first time.
Kathryn van der Pol is the past president of the Automotive Service Association-Houston Chapter. ASA is the largest not-for-profit trade association of its kind dedicated to, and governed by, independent automotive service and repair professionals. She and her husband Sybren own Adolf Hoepfl & Son Garage, in business since 1946.