The availability of aftermarket parts for use in collision repair keeps
auto replacement parts prices competitive and saves consumers billions
of dollars in insurance costs, according to testimony delivered today
by the Property Casualty Insurers Association of America (PCI).
Testifying before a Senate Judiciary Committee staff briefing today on
alternative collision repair parts, PCI Senior Director of Personal
Lines Bob Passmore said that the availability of aftermarket parts has
kept prices lower for automobile replacement parts than what they would
have been absent competition.
Passmore cited studies showing that the existence of a competitive part
in the marketplace reduces the cost of a car company part by an average
of 8 percent per part. In addition, if the competitive influence of
alternative parts were removed, it has been estimated that insurance
costs for consumers would increase by as much as $3 billion.
“At its core, this is a consumer issue,” said Passmore. “Consumers
would bear these costs directly, either through out-of-pocket repair
costs or increases in their insurance costs.”
Passmore also noted that higher repair costs could force some consumers to
forego repairs, leading to more rapid deterioration and depreciation of
their vehicles. He also addressed car company efforts to obtain
replacement part patents in order to eliminate competition from
aftermarket parts suppliers.
“We recognize that the overall design of a vehicle represents a
substantial investment by the manufacturer that can and should be
protected, but there is an
important distinction between the overall design of a car and
replacement parts that are functional in nature,” said Passmore. “There
is no room for innovation in these replacement parts; they are solely
designed to restore the original appearance and function. Design
patents, when applied to these parts in the aftermarket, serve only to
restrict or eliminate competition and facilitate a monopoly on
replacement parts.”
To read about recently introduced repair clause legislation that would loosen restrictions on crash part design patents, click HERE.
