Definition
The California Bureau of Automotive Repair describes a core charge as a form of deposit held for the return of the used part, set by the manufacturer or supplier based on the value of the materials or the reusability of the old part. A core itself, in the international definition agreed by remanufacturing associations in 2016 and published by CLEPA, is a previously sold, worn or non-functional product or part intended for the remanufacturing process, and not waste or scrap.
How it works in a heavy-duty shop
- The shop buys a remanufactured or new part. The supplier invoice shows the part price and a separate core charge.
- The technician removes the old unit, drains fluids and keeps it with the job.
- The shop returns the core to the supplier, which inspects it and issues a credit. Damage or missing pieces can reduce or void the credit.
Billing the customer
Shops handle the deposit in one of two ways: pass the core charge to the customer as its own line and refund it when the supplier credits the core, or absorb it and return the core quickly. Either way, the core charge should be visible. California, for example, requires the core charge to be disclosed and separately itemized on the estimate. Tax treatment varies by jurisdiction; in Canada, the Revenue Agency says the core charge is part of the consideration for the part and GST/HST applies to it. Check your own state rules.
Where money leaks
Cores sitting in the back of the shop or the bed of a service truck are unrefunded deposits. Track each core against the purchase order it came from until the credit posts. MetaFleet tracks parts on purchase orders and service trucks; see purchase orders and parts inventory.