Ronald Baker Jr., president
Baker’s Classic Paint & Body, Inc.
Obviously, aftermarket parts are bad for the industry. In my shop alone, we return about 60 percent of them because they just don’t fit. What a huge waste of our time to order a part that more times than not doesn’t fit, with the other 40 percent being questionable at best.
Whether body shop owners or managers admit it, everybody knows that aftermarket parts just don’t work for our industry. In fact, they decrease profits and the quality of the repair and increase problems. Our technicians are wasting their precious time spending, on average, a half hour just pre-fitting a fender. You don’t need to pre-fit an OEM part because you know it fits. All you have to do is pull it out of the box, check it for dents, then throw it over in the paint shop and let them cut it in. That’s not true with aftermarket parts; there’s a missing step we’re not getting paid for, and that’s pre-fit. And when you don’t pre-fit aftermarket parts, you create a snowball effect of problems that body shops shouldn’t have to absorb. I don’t remember signing up to perform quality control for the aftermarket industry. Isn’t that CAPA’s job?
Why are we doing this? To save the insurance company some money. The last time I looked, my name was still on the building, not the insurance company’s. If it wants to save money, then it should be responsible for all the additional labor and materials, not to mention any defective parts, surcharges or administrative fees. It seems to me that using aftermarket parts is like writing the insurance company a check for all the profit we would have made on those parts if they had been OEM. That makes no business sense to me.
It’s hard for me to understand how body shops have allowed it to get this far. It’s a slow process, where the insurance companies work their little bag of tricks in gradually. We give a little here, we give a little there and, before you know it, they have us right were they want us. It’s almost laughable how gullible we are as an industry. Who ever told us that we had to work off the insurance company’s estimate, anyway?
Here’s another example of problems that can and will occur by using aftermarket parts: In this industry, we pay our technicians on a commission basis, so when a technician pre-fits an aftermarket fender for free and it’s close but not quite close enough, he or she may have to bend it here and ream a hole there to make it acceptable. When working on a commission basis, it’s easier to make a few adjustments on that fender than it is to stop the job and take two steps backward. Technicians know it will cost them more to wait than to make a few adjustments. Body shop owners and managers can say, “Our guys are told not to change the construction of the aftermarket parts to make them fit,” but that’s bull. It happens day in and day out, and you can only control what you can see. What’s wrong with this picture?
The quality of aftermarket parts has increased over the years, but it’s still far from perfect and costs each and every shop hundreds of man-hours and thousands of dollars each year. About 20 years ago, we were able to get certain truck fenders to replace the old rusted ones, and some of them were double paneled. They were so bad that we literally had to lay them on the ground and beat the inner structure just to get a gap between the fender and the hood.
As far as aftermarket parts providing necessary competition to OEM parts, I just don’t buy that argument. OEM parts were in existence for 100 years before the aftermarket came around, and I’m not aware of any huge price gouging that went on then. Even 15 or 20 years ago when the aftermarket parts started to move in, OEM parts were still reasonably priced.
Regarding warranties, from what I’ve read, most if not all auto manufacturers’ warranties are jeopardized by the use of aftermarket parts. Many brochures that I receive from auto manufacturers state that if an aftermarket part causes damage to wiring or airbag deployment, more than the customers’ warranties could be in jeopardy. Also, Ford Motor Company says it cannot be confident that its airbag systems and components will perform properly on vehicles that have been repaired with new aftermarket (imitation) collision parts. I guess I’m not the only one who has warranty issues about aftermarket parts, not to mention the corrosion protection warranty that will be voided if aftermarket parts are used.
What if the customer is paying for the repair out of his or her own pocket and trying to save some money by using aftermarket parts? As far as customers go, it’s the customer’s choice as to whether he or she wants aftermarket crash parts put on his or her vehicle. I still have a problem with it, though. But it really is the customer’s choice – as long as he or she knows about the fit and warranty issues that may occur with the use of these parts.
I think that 90 percent of all shops are using aftermarket parts because they’re instructed to do so by the insurance companies with whom they have DRP relationships. The rest are using them because they feel they have no other choice.
As far as aftermarket mechanical parts go, when it affects the safety of the vehicle, I feel that the only choice is to use OEM parts. After all, who’s going to be respon-sible for the repair and safety of that vehicle? You are. Not the insurance company, which is only trying to save a few bucks.
When it comes to radiators and condensers, though, sometimes it’s better to use the aftermarket; for example, if the car is eight or 10 years old, OEM is no longer available and the only other choice is a used radiator. In that case, the aftermarket doesn’t sound too bad, but that would be the only instance I would give it a go.
I would love aftermarket parts to go away completely, but I don’t think they will. I feel there’s a place for aftermarket parts in our industry, but only as a last resort when OEM parts and/or used parts aren’t available. My biggest issue is that body shops in general just don’t get the picture yet. Aftermarket parts are wrecking our industry. Of all the problems our industry faces, they have to be at the top of everyone’s list.
Tim O’Day, chief operating officer
Gerber Collision & Glass, a subsidiary of The Boyd Group, Inc.
I think aftermarket parts are an important option for the collision repair industry, not just a necessary evil. Over the past five years, total losses have increased as a percentage of total claims. Obviously, body shops don’t have an opportunity to make a profit on a vehicle that’s declared a total loss, so we’re always looking for ways to complete quality repairs cost-effectively.
Our approach at Gerber, which is similar to the approach many other collision repair businesses take, is to first try to repair anything that can be repaired in a quality manner. That produces both the lowest cost to whomever is paying for the repair and doesn’t require third-party resources such as parts. That’s not only good from a cycle time perspective, but it’s also more profitable for the shop and its technicians. Replacement of a damaged part does not drive our profitability.
When a part can’t be re-paired, our insurance partners and customers look to us to perform the most cost-effective quality repair. Billions of dollars are spent on collision repairs, and we can achieve meaningful savings by using quality parts that are less costly than OEM. In addition, I believe there’s a growing consumer-pay component to our business, driven by increasing deductibles and probably some reluctance on the part of policyholders to file claims that aren’t significantly above their deductible. We can provide a more cost-effective repair, making the cost more affordable for the vehicle owner. The aftermarket and other alternative parts (reconditioned or salvaged/used) all give us the opportunity to keep repair costs lower and, as a result, repair more vehicles.
Aftermarket and other alternative parts are just one part of reducing total losses, but the use of these parts is a component of total losses we can influence. At the end of the day, it has to be safe and economically justifiable to repair the vehicle.
My impression is that there’s a wide range of consumers out there. So if a consumer either believes or has been led to believe that OEM crash parts are the only thing that should be used on his or her car, then he or she is more likely to be willing to pay a premium for his or her repair. Most people just want their car to be repaired correctly and look good. We accomplish that while frequently using alternative parts. When Gerber installs any part, we back it up with our lifetime guarantee. So I’m confident that when we’re purchasing a quality part and the vehicle owner is given the appropriate information, that repair will look excellent and we’ll have a satisfied customer.
I believe aftermarket parts have the same structural integrity and look as OEM parts. I’m sure there can be exceptions to that, but if a part doesn’t look right, we’re not going to put it on a car. Aftermarket parts suppliers have done an excellent job over the past several years of improving the quality of the product they deliver to the collision repair industry. Our technicians would acknowledge that several years ago, aftermarket parts were a problem. They often wouldn’t fit, and the techs would have to work harder to make the parts fit well and look good, more so than if they were working with OEM parts. There still may be some issues with fit, but those situations occur much less frequently now than they did five to 10 years ago.
There are occasions when techs may spend more time installing an aftermarket part. The tradeoff is that we’re able to repair vehicles that might otherwise be totaled out or made unaffordable for the vehicle owner to repair. If we measured everything we do purely on, “Did we get paid the same way for this that we got paid for that?” we’d have pricing arguments in many areas of our business.
For those who argue that there were OEM parts long before there was competition from aftermarket parts, yet they were still competitively priced, I’m not sure how anyone would know what competitive was if there wasn’t a competitive alternative. Because of the existence of aftermarket parts, many OEM dealers in the United States want the opportunity to look at what you’re about to pay for an aftermarket part so that they can try to reduce the price of their part to win your business. That’s a tactic that’s more popular with some OEMs than others, but it’s not an unusual occurrence. To me, that’s proof that the existence of the aftermarket parts market helps keep prices reasonable. But let’s go beyond crash parts. If the only place you could buy brake pads for your car was your OEM dealer, and the only place any aftermarket provider could buy those brake pads was your OEM dealer, wouldn’t you expect prices to be competitive?
I think body shops will look at a couple things when choosing aftermarket or OEM parts if price is the same: They may have experience with a particular aftermarket part, and if that experience is good, they would probably make their decision based on the relative net profitability for the shop. We’re all in business to serve customers effectively, but at the end of the day, we all have to make a fair profit for what we do. So, if the profit opportunity on the aftermarket part is less than the profit opportunity on the OEM part, and the price to the ultimate customer is the same, the shop would likely choose OEM. If the price and relative profitability were close, most shops would probably choose OEM.
I think there’s a positive impression of aftermarket parts these days that’s backed up by the fact that quality has improved dramatically. Having said that, there’s likely a greater level of consistency today in the OEM parts market than there is in the aftermarket parts market, both from an availability and consistency of quality standpoint. I don’t mean to say that the aftermarket parts industry isn’t able to distribute a quality product on a timely basis. It generally does a high percentage of the time, but the OEMs still have a much broader depth of product and more consistent quality.
Shops use aftermarket parts because their customers, whether they’re vehicle owners or insurance carriers, are looking for quality repairs at competitive prices. Shops that want to be successful in the long run have to be able to deliver quality repairs at competitive prices. Alternative parts, including aftermarket, are one of the means we have to deliver a quality repair at a competitive price. Any time you’re selling a product of comparable end-quality at a higher price, you’re probably not going to have a sustainable business.
Vehicles that go out from our industry repaired with aftermarket parts can’t be distinguished from those repaired using OEM parts. The repair looks beautiful, and customer satisfaction levels in general in our industry are high. Our CSI scores are excellent, and we’re supporters and users of aftermarket parts.
In some cases, using aftermarket parts provides a good profit opportunity to a shop. However, on a pure dollar basis, it may result in a lower profit for the repairer because an OEM fender might sell for $500 and an aftermarket fender might sell for $250. But the margins on aftermarket parts may be superior because many shops provide discounts on OEM parts to their customers, which would typically not be the case with an aftermarket part.
We always communicate to vehicle owners the type of part we’re using, whether it’s used, reconditioned, aftermarket or OEM. I think it’s not only fair but necessary that consumers determine the type of part being used. On the other hand, if the radiator on your car bursts or a belt wears out, when you take it to your mechanical shop, do they disclose to you whether they bought it from the dealer or a NAPA store? They probably don’t, maybe in part because the payer of the majority of collision repairs is the insurance industry. Because of the three-party relationship and the need for full disclosure, there are business practices as well as legislation in place to make sure vehicle owners are well informed about the decisions being made in regard to their vehicles.
‘Imitation parts’ is not the right term for aftermarket parts. As you own your vehicle for a number of years and you have routine repairs done on it, things break and parts are replaced. Odds are that, in many cases, it’s not the OEM you’re buying those parts from. When your tires wear out, you don’t necessarily buy your tires from an OEM. If your radiator breaks, you may not be replacing it with an OEM radiator. The same goes for condensers, brake pads, rotors and a variety of other components. I don’t see anything wrong with making sure our customers have a clear understanding of what part is being used.
Most customers, if it’s properly explained, have no issue whatsoever.
CAPA certification offers another measure and confirmation of aftermarket part quality. The parts go through a quality check and testing/measuring process that other parts may not. While not all aftermarket parts go through CAPA certification, it’s another level of comfort that the part has been manufactured in a quality environment and meets the CAPA standards.
I don’t think aftermarket parts create OEM warranty issues for the vehicle owner. There are laws in place in many states that would preclude an OEM from voiding its overall warranty based on the use of non-OEM parts. If you think about it, that would be the equivalent of the OEM holding the consumer hostage: “If you ever want me to do anything on your vehicle that’s a problem I created, and you put a non-OEM part on your car, it’ll void the warranty.” To the extent Gerber installs an aftermarket part on a vehicle, we back it up with our own warranty. If it’s insurer paid, it’s typically also backed up by the insurer. Of course, the vendor we buy the part from also warranties the part. So if we ever did have an issue, there’s a chain you can go through to have the issue resolved. Even so, this rarely happens.
The same goes for parts relating to vehicle safety. If you think about suspension parts, they’re often not OEM parts anyway. You can buy ball joints and control arms at NAPA. So I have the same level of confidence in aftermarket parts that I would in any other parts I would buy.
I’m sure that the percentage of body shops that have confidence in aftermarket parts is growing. If it’s a part that isn’t a good fit or arrives damaged, the same damage could also happen to an OEM part. But I think the number of damaged parts and parts that don’t fit has gone down considerably and the aftermarket parts industry has gained credibility.
In the past three years, I haven’t seen more pressure from insurers to use aftermarket parts. In fact, there has been less pressure. Our insurance partners are as focused on their policyholders’ service experience and the length of time it takes us to repair the vehicle as they are on any other element of the repair process. Four to five years ago, however, there was more of a focus on, “Are you using cost-effective alternative parts when appropriate?” Now, for the most part, I think many repairers do a good job of keeping repair costs competitive through the use of alternative parts. The pressure has turned from those areas to making sure the customer’s experience is positive and the repair is done in a quality and swift manner.
I don’t think aftermarket parts will ever become obsolete. They’re needed to keep prices fair and keep repair costs down and help us deliver a quality product.
Higher repair costs, in the long run, can’t be good for vehicle owners.
I suspect that in some businesses, there’s a culture of negativity toward alternative parts and, as a result, there’s a greater tendency to reject those parts without giving them a fair shake. If you talked to an aftermarket parts supplier, it would probably say that, in the delivery of 50 parts to 50 different shops, one shop would have a much greater tendency to return them than another. But I don’t think you would see any difference in the ultimate customer satisfaction level in that one shop versus another. In our experience, aftermarket parts are delivered ready to use and looking good with a good fit, where the consumer doesn’t see any difference in the repair. That being said, I suspect there’s a higher return rate on aftermarket parts than OEM parts for a variety of reasons: fit, packaging, damage, etc.
Our first choice is always to repair a vehicle in a quality manner. If a part can’t be repaired and we have to replace it, our first choice would be to look at cost-effective alternatives: used, reconditioned and aftermarket. We would likely check both pricing and availability of those parts, and then the person writing the repair plan would make the decision as to which part will be used. There are a lot of parts for which an alternative isn’t available, so in those cases, you’re obviously going to go with OEM parts. If alternative parts are available, we would first look to them.
We do business with several insurance partners, none of whom would force a car to be repaired with alternative parts against the policyholder’s desire. The carriers we do business with want to make sure we’re communicating to their policyholders which parts we’re using and the warranty behind them. If a policyholder has a concern and says I want an OEM fender or bumper, there may be an incremental cost to him or her, but none of our insurance partners would have a problem with us doing exactly what the customer wants.