THE BLOG
10/31/2014 05:36 pm ET Updated Dec 31, 2014

Watch Out for Third Party Auto Repair Scams

The auto repair service industry is a huge one, with about 160,000 establishments with a combined annual revenue of $90 billion a year according to one estimate by First Research. About 260,000 businesses employ over 550,000 auto mechanics with annual revenues of $60 billion a year according to IBISWorld. Whatever the exact numbers, this is a huge industry to service the millions of cars on the road from different manufacture, and it is characterized by being highly fragmented, with the 50 largest companies only bringing less than 10% of the revenue, according to First Research. Among the largest are Bridgestone, Jiffy Lube, Midas, and Pep Boys, but an estimated 70% of out of-warranty cars are repaired at independent shops, according to the Automotive Service Association. Plus many mechanics operate through other independent venues that provide automotive services, such as some gas stations and chain stores.

Thus drivers have many options when they want to maintain or repair their cars. Some advantages of the independent services is they can often inspect and fix cars at a lower cost than at a dealer's service bay. Additionally, they provide the convenience of a nearby location for a great many drivers, since there are fewer dealerships.

However, the trade-off for a lower price and convenience is that the service managers and mechanics at some of these independent services can easily take advantage of motorists, especially since many know little about cars. Some of the ways, which I described in another HuffPost blog post on "Avoiding Auto Repair Scams", including recommending unnecessary repairs, overcharging, or not doing the work.

Another big problem is that the independent auto repair company may seem to be expert in repairs for a particular make of car or even appear to be an authorized or certified service center for a manufacturer, when they are not. And manufacturers can do little about this, as long as the auto repair service isn't using the manufacturer's logo and claiming to be a certified dealer or service center when they are not.

I discovered this myself when I had problems with a local service center that did not warn me about the risks of taking my old car to Las Vegas, although I specifically came to them to check my car to see if it would be okay to drive there. After they said it was fine, I agreed to fix the air conditioner, though otherwise I wouldn't have fixed it and would have flown and rented a car. But then the car broke down when the radiator overheated due to a leak and a local car repair chin advised me there was a 50-50 chance the gasket and engine could blow, resulting in my getting a new car because of the risk of another breakdown on the desert even if I repaired the car, which could be deadly. But when I went to the service center to at least get a refund for the repairs I otherwise wouldn't have gotten, they wouldn't take any responsibility for the breakdown. And when I called Toyota to see if there was anything they could do, since I had been a loyal Toyota customer for over 30 years, a customer rep said the company could do nothing because I had gone to a third party repair center. So though the auto repair center listed the company name on its wall, which gave the impression it was authorized to represent the manufacturer, it wasn't. And I never knew enough at the time to ask if the service center was an official or authorized representative of the company, though if it wasn't, I would have taken my car elsewhere for an inspection. So my only recourse was to complain to the company service manager and owner, and once they denied any responsibility I was on my own, with little recourse but seeking refund from my credit card provider or going to court, which could be costly and time-consuming.

This problem with resolving problems when repairs go wrong or are unnecessary is pervasive through the auto repair industry. For example, in an article "Confessions from the Dealership Service Department: How Consumers Are Often Overcharged for services," Phil Reed describes how on his first job at a specialty car company as their national service manager, his bosses always wanted him "to sell more, to recommend service that wasn't needed and to overcharge for the work being done."

Such problems are even worse when one goes to an independent auto repair shop, although most may be quite reputable and professional. Then, if you are dissatisfied with a repair and can't work things out with the local mechanic or owner, you don't have any appeal to the larger corporate entity as you do at most chain garages or dealerships, since according to a One Cent at a Time article, "many corporations are willing to concede the cost of a repair in the interest of preserving good customer relationships."

But with an independent service center or small private garage, you can't do much if the owner or manager, who often may be the person who repaired your car, refuses to budge.

So what can you do? Probably the best thing, recommended by the Federal Trade Commission's Consumer Information Department, is to be very careful in choosing a repair shop. Don't just look at the signs of a local shop and choose that for convenience as I did. Instead, ask for recommendations from friends, family, business associates, and others you trust, and check on consumer review sites, like Yelp. If the company has a low rating, especially if there are a number of complaints, that's a good sign to stay away.

Other recommendations from the Consumer Information Department are these. Shop around by phone and online for the best deals and compare warranty policies on repairs. Ask to see current licenses if repair shops are supposed to be licensed or registered. Check with your state Attorney General's office or local consumer protection agency to see if there is a record of complaints about a particular auto repair shop. Additionally, get a signed written estimate about the repair to be done, the parts needed, the anticipated charge, and an agreement that the shop will contact you for your approval before they do any work beyond a specific amount of time or money.