The Impact of Extended Vehicle Emission Warranties on California’s Independent Repair Shops

by Lloyd Dixon

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Abstract

To satisfy part of California’s Zero Emission Vehicle Program, automobile manufacturers will likely be producing large numbers of partial-zero emission vehicles. The emission-control systems of these vehicles must be covered under warranty for 15 years or 150,000 miles, far longer than current warranty requirements. When the California Air Resources Board adopted the extended warranty requirement, it expressed concern that extended warranties might adversely affect the independent vehicle-repair industry because repairs usually must be done at dealer repair shops to be covered under warranty. This report examines and quantifies the possible effects of extended vehicle warranties on the independent repair industry, estimating those effects out to 2020. It also identifies options for reducing or mitigating adverse effects from extended warranties on independent repair shop owners and workers, and the general public.

The research described in this report was sponsored by the California Air Resources Board and was conducted within RAND Infrastructure, Safety, and Environment (ISE), a unit of the RAND Corporation

This report is part of the RAND Corporation technical report series. RAND technical reports may include research findings on a specific topic that is limited in scope or intended for a narrow audience; present discussions of the methodology employed in research; provide literature reviews, survey instruments, modeling exercises, guidelines for practitioners and research professionals, and supporting documentation; or deliver preliminary findings. All RAND reports undergo rigorous peer review to ensure that they meet high standards for research quality and objectivity.

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