By Jeff Sanford
Toronto, Ontario -- December 28, 2015 -- The new year is almost upon us, and it’s set to bring some regulatory shifts. In Ontario, operators of collision repair facilities will be dealing with changes to the laws around vehicle storage. The new regulations are designed to eliminate overcharging for vehicle storage and make it easier for vehicle lien holders to find out that the vehicle is in storage in the first place.
This past year Ontario MPPs passed Bill 15 in Ontario, which is a wide-ranging piece of legislation that will have the greatest impact on the towing sector. For more on how the new regulations will affect the towing industry, please see “Ontario rolls out new regulations for tow trucks and vehicle storage.”
However, the new towing regulations do not come into effect until 2017. The new rules regarding storage will come into force on July 1, 2016.
However, the rule changes will also have consequences for collision repair centres in that there are changes coming to the way clients can be charged for vehicle storage. The days of some operators charging unnecessary and outrageous fees for keeping a car on the lot, retrieving something from a vehicle or moving other cars to let a blocked one out are over, according to experts. The new rules remove the possibility of an operator of what is supposed to be a collision repair facility basing the business around storage fees.
“The new rules are expected to improve storage practices and remove associated costs from the auto insurance system,” according to a press release put out by the Ontario Ministry of Government and Consumer Services, which developed the new regulations. What this means in practice is that deceptive procedures that have long tarnished the name of legitimate collision repair facilities are being wrung out of the industry.
“We’ve seen these kinds of stories before. These are the kinds of places where, out front the sign says ‘collision repair,’ but the business is really about storage. These are the places that can't make money on the collision work. No one will give them that work. So they try to make money off of storage,” says John Norris, Executive Director of Collision Industry Information Assistance. “The fees for coming in and getting your keys out of car. Or $60 bucks to move the vehicles blocking you in, that kind of thing ... that's gone.”
Norris was a member of the panel which helped the Ontario Ministry of Government and Consumer Services formulate the new rules, and had a hand in developing the new regulations. He suggests this is going to be good for the industry as a whole.
“The majority of shops are not in the storage business, and don't want to be in the storage business. Some will charge different amounts for indoor or outdoor storage. Some will charge for storing a car after the work is done. But that is about managing a shop that's doing real repair work, where space is at a premium. The shops that are just charging as a way of doing business, there's going to be no more of that,” he says.
We’ve all see media reports of people overcharged massive amounts of money for vehicle storage, Recently, the CBC ran a story about a motorist who was charged $8,000 for two days storage. Getting rid of these practices will help raise the image of the industry, or at least prevent the unscrupulous from tarnishing it.
“The ones running a legitimate shop, I don’t think they're going to see any challenges here. Someone who comes to the door and says, 'I left my prescription or the kid's glasses in the car' and then gets charged for that, or who gets charged for moving cars blocking another car in, this is going to cut down on that. Legitimate operators won't have a problem with this,” says Norris.
Another of the changes contained within the act is that, starting July 1, 2016, anyone receiving a vehicle without the permission of the owner and planning to put a lien on the car must tell the owner within 15 days. Right now, the storer has 60 days.
“This is going to be a big change for some. Right now, if you've got a car in your lot, and you just want storage fees, you don't tell anyone. It's there until the end of that period. At 61 days you have to let the owner know it's there. Sometimes, if the car is owned by a leasing firm or a bank, by that time the storage fees are so high, they just let it go. It's not worth it. It doesn't happen frequently, but it happens. The new rules will change that period to 15 days,” says Norris.
As someone involved in the development of the bill, Norris notes that there was some discussion and the possible creation of a computer database to track stored cars.
“There is some talk about a database, where everyone who stores a car has to register it digitally. That way leasing companies would know immediately where it is,” says Norris. “That isn't part of this bill. But that could be coming.”