AAA should disclose business-approval fees

Jose Gomora runs an auto repair shop in Sherman Oaks. Even if you didn’t know that, it’d be easy enough to find out if you were an auto club member and did a search on AAA’s website for an approved shop in the Los Angeles area.

Gomora Auto Service bears the auto club’s seal of approval, one of about 640 repair shops in Southern California (and more than 8,000 nationwide) “that meet and maintain high professional standards,” according to AAA’s site.

What auto club members aren’t told is that Gomora and other shops pay at least $1,000 a year to be listed as a facility approved by the American Automobile Assn.

AAA says this is merely an administrative fee and doesn’t influence its decision to approve a garage.

“It’s not pay to play, that’s for sure,” said Jeff Spring, a spokesman for the Automobile Club of Southern California. “It’s a service we provide to members.”

He said the $250 application fee for AAA approval, plus the annual fee of $1,000 to $1,200, depending on a repair shop’s size, cover the cost of inspecting facilities to ensure reliability and good customer service.

Still, the fact that money is changing hands between the auto club and the businesses it reviews could create the perception of a conflict of interest, particularly because AAA doesn’t mention in its online promotional materials that approved repair shops are paying an annual fee.

Many businesses have complained that the Better Business Bureau sells higher ratings and preferred treatment in return for membership in the organization. I wrote in 2009 about how Wolfgang Puck’s Spago restaurant in Beverly Hills, which wasn’t a bureau member, had a lower rating (B-minus) than less-prominent eateries that had paid $350 a year for accreditation.

Gomora told me he used to be a bureau member but decided to stop paying the money. “It felt too much like paying a bribe,” he said.

So why does he pay even more for the auto club’s approval?

“It is what it is,” Gomora replied, adding that if he didn’t maintain his shop’s standing as a AAA-approved facility, he’d lose potential customers steered his way by the organization.

“It’s the price of doing business,” he said.

Vik Eulmessekian, manager of Jack’s Lube Service in Glendale, also said the money he pays to AAA every year for the organization’s approval is vital for his business. He estimated that about a third of his customers come his way via the auto club.

“They have tons of members,” Eulmessekian said. “That of course is very important.”

Spring said the Automobile Club of Southern California employs 12 full-time inspectors who judge repair shops on a variety of criteria, including quality of service, cleanliness and financial stability. The inspectors make planned and surprise visits to each shop every few months.

“It’s a very detailed process,” Spring said. “We want to ensure that our members are getting the best possible service.”

John Brower, manager of automotive services for the Automobile Club of Southern California, said that only about a third of shops that apply for approval earn the organization’s blessing, and shops that don’t maintain high quality standards are dropped from the listings.

He said the fees charged to approved shops aren’t publicized because it never occurred to AAA execs that this might be seen as a conflict of interest. But he understood why this could be a problem.

“The point is well taken,” Brower acknowledged. “We’ll definitely consider this.”

AAA’s Diamond Rating program for hotels and other lodgings suffers from the same lack of disclosure. Establishments pay an application fee of as much as $400 to be considered for a Diamond Rating, but that isn’t mentioned anywhere on the program’s website.

Unlike repair shops, lodgings don’t have to pay a subsequent annual fee to maintain their approved status. Yolanda Cade, a spokeswoman for AAA’s national office, said this is because inspections occur only once a year, unlike the multiple inspections that repair shops undergo.

Restaurants pay neither an application fee nor an annual fee for a Diamond Rating. Cade said this is because restaurant inspections are easier to perform.

When I first learned that approved repair shops have to pay AAA at least $1,000 a year, it sure seemed as if this was a way the auto club could make some serious coin by turning the screws on garages.

But the more I looked at the program, the more I had to acknowledge its merits. Unlike the Better Business Bureau, which can be aggressive in pushing certification on businesses, AAA waits for repair shops to apply for approval. That’s an important difference.

Also, the auto club isn’t taking just any mechanic’s money. AAA imposes such tough criteria for approval that, Brower said, only about a third of shops that inquire about approval end up submitting paperwork.

And with a roughly 30% acceptance rate for approval, it’s obvious that the auto club isn’t in it just for the money. It sets the bar high and demands that repair shops meet those standards.

I’m sure more than a few garages view the annual fee as a hassle — an expense incurred primarily to attract customers. And I’m sure some owners resent having to fork over so much cash just so they can stay in the auto club’s good graces.

But the main reason people join AAA is to enjoy a little peace of mind when it comes to their wheels. For that reason, the value of membership is clearly enhanced by the auto club’s inspectors keeping tabs on mechanics.

To be sure, you can still get fleeced when you take your car in for service. But it appears that the chances of this happening at a AAA-approved shop are reduced because of the auto club’s vigilance. That counts for something.

It would still be better, though, to let members know that a shop is paying fees for the privilege of AAA approval. Honesty is always the best policy.

David Lazarus’ column runs Tuesdays and Fridays. He also can be seen daily on KTLA-TV Channel 5. Send your tips or feedback to [email protected]