Where There’s Smoke . . . : There Could Be a Fiery Market for New Smog Test Centers
Most entrepreneurs chafe at government regulation, but they might see opportunity in a new state crackdown on excessively polluting vehicles.
The state’s Bureau of Automotive Repairs, the agency that administers the smog check program, is encouraging the establishment of more test-only smog check centers. It will direct 800,000 vehicles to these centers next year, a move that could generate up to $32 million in business.
The goal is to eliminate fraudulent practices by smog shops that tamper with “a high-polluting car so that it meets emissions standards for the day, long enough to get the required emissions certificate,” according to the agency. The test-only centers, as their name implies, provide no repairs and are forbidden from referring customers to specific repair shops.
“If you sever tests and repairs from one another, then you sever that fiduciary relationship” and lower smog check costs to consumers, said Martin Keller, chief of the Bureau of Automotive Repair.
The state expects that test-only centers will hold costs down for consumers because the centers’ mechanics needn’t be as highly skilled as repair shops’. The state requires an $8 fee for the certificate; the test-only centers usually charge $29 to $39 for the exam.
Members of the California Service Station and Automotive Repairs Assn. say that although they support the tougher smog check laws, they caution prospective business owners to view the opportunity with a “high degree of insecurity.”
“We are worried it will bring the whole [smog check] program down,” said Chris Walker, a member of the group, which is lobbying for legislation that will eliminate test-only centers from the Smog Check II program.
He said test and repair service operators are likely to be hurt by state-fostered competition. And he warned that consumers may end up frustrated in long lines--and face higher prices--because not enough test-only centers will be open when the program gets in full swing. Only 30 exist now.
The state has already started referring vehicles identified as probable high-emission vehicles to privately owned and operated test-only centers. Motorists who don’t complete the smog checks face penalties starting in March. The Department of Motor Vehicles will send letters to car owners whose autos have a history of failing the smog exam. The letters will include an 800 number that lists the closest test-only center.
Entrepreneurs interested in opening a test-only center must purchase diagnostic equipment called a dynamometer, which costs from $29,000 to $40,000. It’s most economical for businesses such as car washes, oil change outlets, auto parts retailers and gas stations to add test-only facilities, according to the auto repair bureau.
John Wilson opened one of California’s first test-only smog check centers in 1984, the year the state began requiring smog checks. Now his Irvine-based Auto Chek Centers Inc. is a model of sorts for the test-only centers the state is encouraging.
Wilson estimates that each of his pyramid-shaped centers tests 24 vehicles a day. At about $40 per test, that equals $960.
But he cautions that entrepreneurs can’t rely on the state sending them enough offenders to keep them in business.
“If you only perform a few tests a day, then you’ll never make enough or recoup the costs,” Wilson said.
As test-only centers sprout up, competition will increase. It’s up to the owner to keep prices competitive, Wilson said, and find a way to tap into the other 85% of the motorists who will not be referred by the state.
Three months ago, former repair shop owner Nam Truong rented a space at an Arcadia gas station to open a test-only center. He learned about the business by looking at the Bureau of Automotive Repairs’ Website on the Internet at https://www.smogcheck.ca.gov
So far, business has been slow.
David Zebrack, president of Sepulveda West Car Wash in West Los Angeles, began receiving state-referred vehicles at his test-only center earlier this month.
“I think the key to the program is finding a good retail location,” Zebrack said. Because he already had a large customer base for his carwash, gas station and lube center, a test-only center seemed like a natural addition.
Rocky Carlisle, project manager for the Bureau of Automotive Repairs, said smog check center owners should consider business generated by the new laws as “icing on the cake.” Time and advertising, he said, are essential.
“We can’t guarantee the business, we can only guarantee the vehicles. It becomes who is the better businessman.”