State and national aftermarket associations fight CARB over extended warranties

The California Air Resources Board (CARB) may have convinced the state of California to pass anti-competitive regulations requiring car companies to extend emissions warranties for defective vehicle parts, but that doesn't mean the ruling has been greeted favorably by the aftermarket industry. A coalition of 10 state and national aftermarket trade associations recently filed a lawsuit against CARB, arguing that the new regulations will cause financial damage to the state's aftermarket industry as well as negatively impact motorists in the long run.

"CARB has argued that forcing auto manufacturers to extend warranties to the useful life of the part will improve vehicle durability," says Aaron Lowe, vice president of government affairs for the Automotive Aftermarket Industry Association (AAIA), in an interview with Aftermarket Business Magazine. "But we've found no evidence that says these extended warranties will influence the production of better-built vehicles in the future."

When asked to comment on the pending litigation, Karen Caesar of CARB declined, saying that the group had not yet seen the lawsuit.

Lowe also revealed that CARB's initial push to institute the extended warranties stems from the fact that automakers are more reluctant to issue recalls for a part with a high failure rate than they are to agree to an extended warranty on that same part. But such legislation will hurt California's aftermarket industry as motorists begin taking their vehicles to dealerships for maintenance, simply because they are afraid of voiding their vehicle's warranty.

"When a vehicle's malfunction indicator light comes on, the motorist has no idea what it means," Lowe says. "So they'll return to the dealer to get the problem fixed. But if the part in question isn't covered by the extended warranty, they'll end up paying more out of pocket for the repair than they would have at an independent repair shop."

According to Jackie Miller, executive director of the Automotive Service Councils of California, the lawsuit also charges that extended warranties are unlikely to provide any real clean air or consumer benefit."But it does mean that motorists will return to the dealer for nearly all vehicle repairs," she says, causing independent service facilities to lose a huge portion of their business.

"The majority of motorists want to go to the independent shops, but won't now that this legislation has taken effect," Lowe adds.

In addition, the plaintiffs are arguing that CARB has no data to indicate whether warranties are effective in motivating the motorist to obtain needed emissions-related repairs. And by claiming this data exists while interpreting existing California statues in a manner that advances its agenda, Lowe says CARB is treading on shaky ground.

"California's Health and Safety code clearly states that the emissions warranty is three years/50,000 miles on all emissions-related components and seven years/70,000 miles for high-priced emissions-related repairs," he adds. "The state's attempt to extend the warranty to 10 years/120,000 miles for most cars clearly is outside the scope of this statute. The industry is not going to sit idly by while the agency continues to ignore the state's laws and cause financial harm to California small businesses."

In addition to AAIA, the plaintiffs in this lawsuit include: the Automotive Service Association, the Automotive Parts Remanufacturers Association, the Automotive Service Councils of California, the California Automotive Business Coalition, the California Automotive Wholesalers Association, the California Autobody Association, the California Service Station and Automotive Repair Association, the Car Care Professionals Network and the Independent Automotive Professionals Association.

For more information about this lawsuit, visit the Automotive Aftermarket Industry Association's Web site.