issues

The auto care industry maintains a significant stake in a number of key issues, all of which are actively monitored and managed by the Auto Care Association’s government affairs staff. Below are detailed descriptions of the industry’s most talked-about issues, official policy positions of the association and links to related content. If you require additional information or have a separate issue you want to know more about, contact our government affairs department.

Telematics

Similar to in homes and businesses, wireless technology is quickly becoming an important part of the “smart” connected vehicle. This telematics technology is providing motorists with remote access to a wide range of entertainment and information services within their vehicle, including navigation, traffic, email, web browsing, social media and travel assistance. Furthermore, telematics will likely provide significant safety benefits through use of technology that enables vehicles to communicate with each other and with the roadway network, as well as quickly communicate the need for emergency or breakdown assistance to the appropriate authorities.

While the Auto Care Association recognizes the safety and convenience benefits of vehicle telematics, consumer privacy, as well as the vitality of the independent auto care industry, must be protected. Once a vehicle is purchased by an individual, the car owner, not the car company, should determine where the information from those systems is sent, if to anyone. Such action is needed to uphold consumers’ expectation of privacy and choice regarding their personal data and to maintain a healthy competitive landscape for vehicle repair. It is their car, their data, their choice.

Additional Resources:

Auto Care Association Position Paper on Vehicle Telematics

"Whiteboard" Video on Vehicle Telematics

Auto Care Comments to U.S. Copyright Office - Feb. 2016

Automaker Privacy Principles - Nov. 2014

Automaker Privacy FAQs - Nov. 2014

Auto Care Association Press Release: Vehicle Manufacturers’ Privacy Principles Fail to Adequately Provide Consumers Control of Their Car’s Data - Nov. 2014

Right to Repair

The Motor Vehicle Owners’ Right to Repair Act was the Auto Care Association’s principal policy objective for many years. The industry’s wildly successful campaign in Massachusetts paved the way for a national solution, eventually finalized in a 2014 memorandum of understanding between the Auto Care Association, Coalition for Auto Repair Equality (CARE) and vehicle manufacturers. For the first time ever, new car manufacturers must make the same service information and tools available to independent repair shops that they provide for their franchised dealers. Right to Repair now guarantees every car owner’s right to have their vehicle serviced at the repair facility of their choice.

Additional Resources:

Auto Care Association letter on House subcommittee discussion draft bill re: vehicle safety - Oct. 2015

House subcommittee discussion draft bill re: vehicle safety - Oct. 2015

Signed heavy duty memorandom of understanding

Signed memorandum of understanding

Press release - Jan. 2014

Frequently asked questions on MOU

Full list of OEM Service Information websites

Massachusetts Right to Repair bill

Auto Care Association comments on DCMA exemption

For more information, visit  www.righttorepair.org.

Magnuson-Moss Warranty Act

In recent years, vehicle manufacturers and their franchised dealers have been pursuing an increasingly aggressive strategy aimed at growing the sales of their original equipment replacement parts and repair services. The result has been a smear campaign by the vehicle manufacturers, which aims to discredit the quality of auto care market parts by suggesting that the use of such parts could result in the invalidation of a vehicle’s warranty. For instance, in a 2011 release, Mazda alleged “automotive aftermarket parts are generally made to a lower standard in order to cut costs and lack the testing required to determine their effectiveness in vehicle performance and safety… Mazda also recommends that car owners use original equipment replacement parts in repairs in order to ensure the validity of their warranty.”

Enacted in 1975, the Magnuson-Moss Warranty Act prohibits product manufacturers from conditioning consumer warranties on the use of any original equipment part or service. Furthermore, a manufacturer can only deny warranty coverage if it can demonstrate that a non-original equipment part or related service caused a defect to occur in the original product. In the case of motor vehicles, new car manufacturers have ignored these conditions outlined in Magnuson-Moss and have misled consumers to believe that they must have dealer service shops install only original equipment replacement parts or fear having their new car warranty voided.

The Federal Trade Commission (FTC) is responsible for enforcing the Magnuson-Moss Warranty Act. However, in the case of motor vehicles, the FTC has taken little action to ensure consumers receive accurate information regarding their rights under their new car warranties.

With the help of auto care companies and trade groups, the Auto Care Association has filed complaints with the FTC, taking issue with the unsubstantiated claims made by the vehicle manufacturers regarding the quality of auto care parts and the conditioning of warranties on the use of certain parts. The Auto Care Association has reached out the FTC indirectly through our allies in Congress who have been encouraged to put pressure on the FTC to take action against vehicle manufacturers. In response to an FTC Request for Comment on its warranty-related interpretations, the Auto Care Association called on the commission to provide for better disclosure of a consumer’s rights under a new car warranty and require substantiation to be provided with any claims made by the vehicle manufacturers that non-original equipment parts are substandard.

Key points: There are a number of important points to consider when talking about the quality of auto care industry parts. Studies have confirmed that auto care industry parts are of a similar or even greater quality than the original equipment replacement parts they replace. In fact, most auto care industry parts are identical to original equipment parts because parts manufacturers create and sell the same parts to both the auto care market and new vehicle manufacturers. Auto care market companies have the benefit of observing a part’s performance and can then correct problems that are discovered only after the part has been in use for some time. Thus, the FTC must conduct greater oversight and enforcement of vehicle manufacturers who do not comply with the Magnuson-Moss Warranty Act and who seek to discredit auto care market products; aggressively enforce requirements that vehicle manufacturers must substantiate all claims that use of non-original equipment parts could jeopardize a vehicle warranty; and require better consumer disclosure by car companies regarding their rights under the warranty. This might entail compelling the car companies to:

  • Include in their warranty booklets a prominently placed statement that, as a motor vehicle manufacturer, they are prohibited from conditioning the warranty on the use of any non-original equipment part or service; or, 
  • Inform consumers of their rights with a written statement of reasons when a warranty is denied due to the use of a non-original equipment service or part.

Additional Resources:

Release: Auto Care Association Salutes Connecticut for Passage of Magnuson-Moss Legislation - July 2015

Connecticut Senate Bill 99 text

FTC final action on Magnuson-Moss review - May 2015

Release: Senator Urges FTC to Take Action Against Carmakers’ Misleading Warranty Tactics - Oct. 2014

Letter to the Editor regarding Kia - May 2014

Letter to FTC regarding Consumer Reports / Kia - May 2014

Consumer Reports article on Kia - May 2014

Letter to FTC regarding Kia alert - May 2012

USAP comments on Magnuson-Moss review - Oct. 2011

Letter to FTC regarding Mazda release - Oct. 2011

Mazda press release - Aug. 2011

Labor

In 2009, the Auto Care Association and the U.S. business community effectively stopped the so-called “card check” legislation which would have made it far easier for employees of any business to unionize. However, the National Labor Relations Board (NLRB), which is an independent federal agency that works to protect the rights of private sector employees to unionize, has been using its executive power to negate the industry’s success in killing “card check” at the legislative level. In the ensuing years the NLRB and the Department of Labor (DOL) have issued a number of rulemakings that ease the unionization of businesses and severely limit the rights of employers. These include issuing: 

  • A Notice of Proposed Rulemaking (NPRM) to reinterpret what constitutes “persuader” activity under the Labor-Management Reporting and Disclosure Act (LMRDA) by greatly expanding what exactly employers and consultants would need to report regarding communications with employees about unions;
  • An NPRM to post a notice in the workplace about the right to organize a union under the National Labor Relations Act (NLRA); and
  • An NPRM setting forth new procedures for “conducting a secret ballot election to determine if employees wish to be represented for purposes of collective bargaining,” which could result in union representation elections being held within 10-21 days of a union petition, often referred to as “snap” elections.

While the business community has been successful holding off these efforts in the courts, President Obama named two new nominees to the National Labor Relations Board in July of 2013: AFL-CIO general counsel Nancy Schiffer and Kent Hirozawa, chief counsel to the current NLRB chair. Since these appointments, the NLRB has re-issued the “snap” or “ambush” election rules, largely unchanged from the original 2011 NPRM, and also invited comments on whether employees have a right under the NLRA to use their employer’s email system to promote unionization. These actions are expected by the business community to be followed by more pro-union activities. The association, through its membership in the Coalition for a Democratic Workplace (CDW), has been a party to multiple lawsuits against the NLRB and remains active in monitoring NLRB activity, as well as supporting legislation designed to impede efforts by the NLRB to nullify existing law through regulatory changes.

Healthcare

The Auto Care Association has been at the forefront of lobbying for small business healthcare reform for many years. With the advent of the passage of the Patient Protection and Affordable Care Act (PPACA) in 2010, our efforts have shifted to repealing the most onerous provisions of the PPACA. Aligning with like-minded associations through membership in the Small Business Coalition for Affordable Health Care (SBCAH), the business community was able to obtain the repeal by Congress of the overly burdensome 1099-reporting provision. 

While the Obama administration has delayed significant portions of the PPACA, such as the employer mandate and various taxes, Auto Care continues to support full repeal of these provisions. Over eighty percent of the fully-insured market is made up of small businesses. Employers are already feeling the effects of the Health Insurance Tax (HIT), for instance, which was written in to the PPACA strictly as a revenue-raiser. Although the HIT applies to the insurance carriers, it quickly became a pass-through that is now adding $400-$500 annually for a family’s premium.

The association is also working with the regulatory agencies to ensure that what does remain of the PPACA will follow guidelines that keep affordability as a priority.

Transportation

Congress is developing the next authorization legislation for the national transportation program, but the major concern at this time is the funding deficit facing the Highway Trust Fund (HTF). Several proposals are being floated as possible mechanisms to avoid insolvency for the HTF and secure long term future funding. In general, most relevant industry organizations have developed positions on the future of the national transportation program and, as of 2014, the Auto Care Association has a formalized position on the matter.

The Auto Care Association supports a robust highway program that balances the needs of infrastructure repair, maintenance, and roadway safety with the costs consumers and businesses can reasonably contribute. We support the continued existence of the HTF, funded through the collection of federal gas tax revenues that must now be indexed for inflation. We oppose any tolling of existing publicly funded roadways or the imposition of a vehicle miles traveled revenue scheme that disproportionately harms the auto care industry and the driving public.

Taxes

Effective Tax Rates: Many Auto Care Association members, particularly the retail and service segments, are largely taxed at an effective tax rate of around 30 percent, while most large corporations (C-corps) are taxed at a percentage in the teens or lower. Proposed tax reform legislation doesn’t address the disparities in effective tax rates paid, and it could even grow the disparity between large corporations and S-corps, pass-throughs, LLCs and partnerships. The Auto Care Association believes that the failure to address effective rates is a fundamental struggle for our small business members, and one that clearly demonstrates the inherent unfairness of the current tax system.

Save LIFO: The proposed repeal of Last-In-First-Out (LIFO) inventory accounting will have a severe impact on many segments of our industry. LIFO has been in use for 70 years, and is used by more than one-third of companies nationwide, across manufacturing, wholesale distribution, and retail industries. The severity of a repeal would be a result of its unprecedented retroactivity, since the majority of the revenue that would be derived from the one-time “recapture tax,” the taxation of the LIFO reserves that companies have built during all the years they have used LIFO, some for many decades. Many lawmakers struggle with understanding the issue because the LIFO reserve is not a liquid asset sitting in an account, it is an accounting entry. Today, taxes on existing LIFO reserves are due when the inventory levels are reduced, or when a company closes or is acquired. Of major concern, most LIFO repeal proposals contain no transition rules that would mitigate the harm of repeal, because there is no additional cash flow coming into the company with which to pay the retroactive tax bill. The association is actively opposing the repeal of the LIFO method of accounting.

Repeal of the Estate Tax: The association has historically supported full repeal of the estate or “death” tax. On Jan. 1, 2013, the American Taxpayer Relief Act of 2012 was passed establishing an exemption of $5 million (adjusted for inflation), per person for U.S. citizens and residents, with a maximum tax rate of 40% for the year 2013 and beyond. At the time, the law was viewed as a permanent fix to the estate tax. However, the administration’s 2014 budget called for significant rate increases in the tax which is opposed by the association. Further, the Auto Care Association supports significant efforts by several coalitions to fully repeal of the estate tax. The association continues to monitor and support these efforts.

Marketplace Fairness: The Auto Care Association supports leveling the playing field for brick-and-mortar auto care industry businesses with online retailers through legislation like the Marketplace Fairness Act (or similar). When ecommerce began, Congress imposed a sales tax moratorium for purchases made online. However, the continuation of the tax collection moratorium has begun to hinder brick-and-mortar businesses. The Senate passed the Marketplace Fairness Act (S. 743) in April 2013, however, the House of Representatives has struggled to move forward with its own legislation. The Auto Care Association urges passage by the House of legislation similar to the Marketplace Fairness Act.  Specifically, the legislation should:

  • Allows states the authority to collect sales tax from remote sales;
  • Streamline state tax codes in order to eliminate excessive audit burdens;
  • Provide software free to online retailers to integrate with existing point-of-sales systems to ease collection of the tax;
  • Minimize burdens on small online retailers; and
  • Base tax rates on the destination of the purchase in the transaction.

Additional Resources:

Marketplace Fairness Coalition Letter to Chairman Goodlatte - Jan. 2014

Wholesaler Trade Associations Letter to Chairman Goodlatte - June 2014

  • Share