Air board sued over car warranty rule
A coalition of automobile trade groups has sued the California Air Resources Board over a new regulation that extends warranties on some vehicle emissions equipment, claiming it could cost its members billions of dollars.
The suit was filed last week in Los Angeles Superior Court by 11 organizations that represent the aftermarket car parts and service industry. At issue is a rule, approved Jan. 4, that would extend the manufacturer’s warranty on some emissions equipment to 10 years or 120,000 miles on all new cars.
The trade groups claim the regulation, designed to pressure manufacturers to improve the quality of parts such as catalytic converters and oxygen sensors, will only serve to hand over a larger share of California’s $30-billion annual service and repair market to dealer-owned shops. Drivers armed with a longer warranty, they argue, will be more likely to go to dealers for all repairs, whether they are covered by a warranty or not.
“We’re all in favor of the [Air Resources Board] pushing manufacturers to require more durable parts,” said Aaron Lowe, vice president for government affairs at the Automotive Industry Aftermarket Assn., one of the lead plaintiffs. “Our concern is that they’re deciding who should be doing the repairs and who shouldn’t be.”
Studies performed for the association and other groups in recent years have indicated that the rule could cost parts suppliers, independent garages and others as much as $8 billion a year in business lost to dealer service shops. The lawsuit calls for the rule to be overturned.
A spokesperson for the Air Resources Board said the agency does not comment on pending legislation.
Currently, automakers are required to provide warranty coverage up to three years or 50,000 miles (or seven years or 70,000 miles for more expensive components) on the emissions systems of all new cars. In addition, recalls are mandated when any emissions part has a failure rate of more than 4% among all such models registered in the state. Failure is defined as a malfunction that causes cars to fail emissions tests.
Although the new rules, which take effect in the 2010 model year, will extend warranty coverage on emissions parts, they also will make some changes benefiting manufacturers. Specifically, the new rules will eliminate costly recalls. Instead, the failure threshold has been raised to 10%, and after that is reached, an extended warranty on the affected part will kick in. Owners of a car with a faulty part will receive notification by mail of the extended warranty on that part alone.
The new rule is stricter on what qualifies as failure, however. It redefines failure as any defect that leads to decreased emissions quality, whether or not the decline is sufficient to cause testing failure.
Critics say the rule will confuse customers and lead them to believe they have warranties extending to all systems of the car.
“If a light on the dashboard turns on, the consumer doesn’t know what the problem is and will assume it’s probably covered,” said Norm Plotkin, lobbyist for the Automotive Industry Aftermarket Assn. and the California Automotive Wholesalers Assn., also a plaintiff. “This take a lot of work out of our hands.”
Commonly affected emissions parts include catalytic converters, oxygen sensors and intake manifold gaskets. Cars that don’t contain parts that pass the 10% failure threshold would not receive extended warranties.
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