GENERIC AUTO CRASH PARTS

Crash parts, also referred to as cosmetic parts, are the sheet metal components of vehicles; the outside “skin” most frequently damaged in auto accidents, such as fenders, hoods and doors panels.There are two sources for crash parts: auto manufacturers, who sell them under their own names, also known as original equipment manufac-turers (OEMs), and generic or aftermarket crash parts suppliers. Before generic parts existed, creating competition in the market-place, OEMs were able to sell their parts at much higher prices than they can today.The introduction of aftermarket parts forced down the price of OEM parts by an average of 30 percent.After a lawsuit against State Farm Insurance Co. for using generic parts, however, many insurers limited their use or stopped using them altogether.

In the continuing debate about whether generic parts are as good as parts from OEMs, the issue of safety is in the forefront. Critics claim that using parts from sources other than OEMs could com-promise safety. However, the Insurance Institute for Highway Safety (IIHS) says that with the possible exception of hoods, there are no safety implications of using cosmetic crash parts from any source. This has been demonstrated by crash tests conducted at the IIHS. In addition, an independent, third-party nonprofit organization, Certified Automotive Parts Association (CAPA), rigorously inspects generic automotive parts and guarantees the quality of those that meet its high standards. Generic crash parts do not interfere with a vehicle's existing warranty and are often manufactured by the same supplier and in the same manner as OEM parts.


RECENT DEVELOPMENTS

  • Lawsuits: In March 2007, a county court in Missouri awarded $17 million to 315,000 state residents in a class-action suit against American Family Mutual Insurance Company concerning aftermar-ket auto parts. The lawsuit stated that the insurer used inferior aftermarket parts, among other charges related to repairing dam-aged vehicles.The insurer, which does not use aftermarket parts on vehicles that are less than three model years old or to replace safety-related parts such as air bags, plans to appeal the verdict.


  • In December 2006, an administrative law judge of the United States International Trade Commission issued a preliminary ruling that, if upheld, could halt imports of certain aftermarket parts that the Ford Motor Company claims infringe on its patents. The judge found that some patents were not infringed, but that others were. The ruling will be reviewed by the International Trade Commission, which must issue its decision before March 5, 2007. In December 2005, Ford filed a design patent infringement complaint against Keystone Automotive Industries and other suppliers of aftermar-ket automotive parts. Advocates of the use of aftermarket parts fear that if this case succeeds, although few parts will be affected, success could lead other automobile manufacturers to employ similar tactics and ultimately reduce the availability of non-OEM parts.


  • In a victory for consumers, in March 2006, the U.S. Supreme Court refused to hear an appeal from the plaintiffs in State Farm v.Avery, the class action lawsuit targeting the use of aftermarket parts.The Illinois Supreme Court had overturned lower court rulings, finding not only that the use of aftermarket parts did not breach State Farm’s contract with its policyholders but also that the class action had been wrongly certified.


  • The lawsuit had charged State Farm with breaching its contracts with its policyholders when it specified the use of non-original equipment (non-OEM) parts in the repair of vehicles damaged in crashes. The suit covered the entire United States, except for Arkansas and Tennessee and some State Farm policyholders in Illinois and California, depending on the date of their crashes. The loss of the appeal paved the way for insurers to start using generic auto repair parts once again. Many insurers had reverted to using the generally more expensive OEM parts, in the wake of the lower court rulings.The use of aftermarket parts of the same or higher quality than those from OEMs is credited with keeping down the cost of car repairs.


  • In its ruling on the validity of the class action certification, the Illinois Supreme Court ruled that the claims in the case, which stemmed from repairs using many different parts from various vendors following accidents in 48 jurisdictions, each with its insurance laws and regulations, varied too much to be dealt with as a class action.


  • Consumer Protections: In response to collision repairer concerns about tracing problem parts, Certified Automotive Parts Association (CAPA) announced in December 2004 the release of a new part tracking system called CAPA TRACKER.The CAPA TRACKER is a free, web-based program that connects the CAPA seal number to the exact vehicle on which it was installed. Each repair facility that uses a CAPA part can enter the required information on the web-site using an individual shop code. In the event of a part recall, CAPA could quickly notify every shop that installed one of the parts in question. The shop could then alert their customers and take any necessary action. Should replacement of the part be necessary, it is expected that the cost would be borne by the part distributor.The TRACKER program will also enable insurers to better monitor the actual use of CAPA certified parts and to trace those parts.


BACKGROUND

Prior to 1970, auto body repair shops could only buy replacement parts like fenders, door panels and grilles from auto manufacturers. Original equipment manufacturers (OEMs) had virtually no compe-tition in this market, a monopoly they had fought to preserve.When independent manufacturers in several countries, including the United States, began making sheet metal replacement parts, OEMs found themselves facing tough competition.

By the early 1980s independent suppliers were making crash parts to fit vehicles made by all auto manufacturers. Although their mar-ket share is still low at 15 percent, the economic impact of aftermar-ket crash parts is significant. Not only are most of the independent-ly made parts less expensive, but their existence has forced the car companies to lower the prices of their parts.Whenever there is an equivalent aftermarket crash part, OEM prices have been forced down by 30 percent or more. This has helped keep the rate of increase in auto repair prices in check, which in turn, has stabilized auto insurance premiums.

Certified Automobile Parts Association (CAPA) was originally established in 1987 through the efforts of the Auto Body Parts Association (ABPA), which was anxious to improve the quality of and the public’s confi-dence in aftermarket parts. In 1999, the ABPA invited many collision repair specialists to visit CAPA-certified manufacturers of crash parts to both view the improvements already achieved and to rec-ommend what should be done to continue to improve quality. Although CAPA receives a great deal of funding from the insurance industry, the collision repair experts provide advice and have a strong presence on CAPA's Board of Directors. In 2008, the chair-man is a collison repairer.

The CAPA Certification Program is a multistep program. It includes a detailed review and inspection of a participant’s factory and manu-facturing processes, followed by an analysis conducted by an inde-pendent testing laboratory. Should the participant meet all production and quality requirements, samples of the parts that will bear the

CAPA certification label are submitted for testing to ensure that the material and physical integrity of the part is satisfactory. Only after this exacting process has been completed is certification granted.The factory and parts continue to be subject to random inspection by CAPA to ensure that quality standards continue to be met. Users of parts bearing the CAPA Quality Seal are encouraged to file complaints should they find that a part does not live up to expectations. CAPA reserves the right to decertify parts that are found to no longer comply with CAPA quality standards. Since 2002, CAPA has been certifying lighting products (headlights, tail lights, etc.) that conform to Federal Motor Vehicle Safety Standards. The certified light products also carry the unique tamper-proof seal.The availability of aftermarket parts has revolutionized the auto repair industry.Today over 7,200 part types have achieved CAPA certification. Many parts distributors provide limited lifetime warranties on their parts.

In March 2000, the Insurance Institute for Highway Safety reaffirmed that the source of a car’s cosmetic crash parts is irrelevant to crashworthiness. Using a 1997 Toyota Camry, OEM cosmetic parts were removed and the hood replaced with a CAPA-certified hood from an aftermarket supplier.The crash test results from a 40-mph frontal offset impact were compared with results from an identical crash test performed on an identical Camry with the OEM parts still intact. Both Camrys performed with distinction and earned good crashworthiness ratings according to the Institute’s evaluation procedures. CAPA-certified parts have been proven to perform identically to car company brand parts in every significant aspect.With this data as proof, CAPA uses the term “functionally equivalent” to describe how its parts rank in relation to the OEM cosmetic parts it replaces.This is a much stronger term than “of like kind and quality,” the term used in state and local laws and regulations to describe the standard for replacement parts used in the repair of automobiles.

Consumer Protections: In response to collision repairer concerns about tracing problem parts, Certified Automotive Parts Association (CAPA) announced in December 2004 the release of a new part tracking system called CAPA TRACKER. The CAPA TRACKER is a free, web-based program that connects the CAPA seal number to the exact vehicle on which it was installed. Each repair facility that uses a CAPA part can enter the required information on the website using an individual shop code. In the event of a part recall, CAPA could quickly notify every shop that installed one of the parts in question.The shop could then alert their customers and take any necessary action. Should replacement of the part be necessary, it is expected that the cost would be borne by the part distributor.The TRACKER program will also enable insurers to better monitor the actual use of CAPA certified parts and to trace those parts.

State Aftermarket Parts Legislation And Regulation (1)

State
Logo, ID number or mfg.'s  name
Estimate must identify non-OEM parts
Disclosure statement
Prior consent
Alabama
X
X
X
Alaska
Arizona
X
X
X
Arkansas
X
X
X
X (2)
California
X
X
X
X
Colorado
X
X
X
Connecticut
X
X
Delaware
D.C.
Florida
X
X
Georgia
X
X
X
Hawaii
X
X
X
Idaho
X
X
X
Illinois
X
X
X
Indiana
X
X (3)
Iowa
X
X
X
Kansas
X (4)
X (4)
Kentucky
Louisiana
X
X
X
Maine
Maryland
X
X
Massachusetts
X
X
Michigan
X
X
Minnesota
Mississippi
X
X
X
Missouri
X
X
X
Montana
Nebraska
X
X
X
Nevada
X
X
New Hampshire
X
X
X
New Jersey
X
X
X
New Mexico
X
New York
X
X
North Carolina
X
X
North Dakota
Ohio
X
X
X
X
Oklahoma
X
X
X
Oregon
X
X
X
Pennsylvania
X
X
Rhode Island
X  (6)
X
X (5)
South Carolina
South Dakota
X
X
X
Tennessee
X
X
X
Texas
X
Utah
X
X
X
X
Vermont
Virginia
X
X
Washington
X
X
X
West Virginia
X (7)
X (7)
Wisconsin
X
X
X
Wyoming
X
X
X
X

 

(1) This chart covers regulations concerning only aftermarket parts, which are new parts made by a company other than the original vehicle manufacturer.This chart does not cover regulations for using used, rebuilt, or reconditioned parts.

(2) Consent required if vehicle is still under original warranty.

(3) Consent required for the five years after a vehicle's model year.

(4) Does not apply to vehicles more than 10 model years of age or older.

(5) For vehicles less than 30 months beyond date of manufacture, repair shop shall not use non-OEM parts without consent of vehicle owner.

(6) Applies to the repair bill.

(7) Generic crash parts sufficient to maintain warranty must be used in repairs for a period of three years beginning with the year of manufacture. Source: Property Casualty Insurers Association of America.

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