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California Aftermarket Parts Bill Defeated

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California Senate Bill 1059, which would have made it unlawful for any insurer to require the installation of an aftermarket part for the first three years of the vehicle’s life as well as restrict the ability of insurers to replace a part with a lower priced replacement part during this same three-year period, has been defeated.

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A large coalition including the California Automotive Wholesalers’ Association (CAWA), Automotive Aftermarket Industry Association (AAIA), Coalition for Automotive Repair Equality, LKQ/Keystone, California Retailers Association, AAA, the insurance industry and others worked together to lobby against S.B. 1059.

"The California State Senate clearly understands that S.B. 1059 is bad for California consumers," said Rodney Pierini, president and CEO of CAWA. "Given the soaring costs of fuel and increasing costs of everyday goods and services, consumers deserve options from both the high costs of original equipment parts as well as increased insurance premiums. Insurers being forced to approve only one sourced, high-priced part when the same or better quality aftermarket part is available and backed by long-term or lifetime warranties is a lose-lose for consumers."

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According to CAWA, aftermarket replacement parts are in most cases manufactured by the same companies that manufacture the car company parts, and the only difference can be the box they’re marketed in and the price of the parts. CAWA also claims that aftermarket parts are identical or even more improved parts that come with long-term or lifetime warranties and cost up to 50 percent less than the identical car company part.

 "Aftermarket businesses and their employees should be extremely proud of this accomplishment," said Aaron Lowe, vice president of government affairs for AAIA. "Working together, there’s no stopping the automotive aftermarket when faced with constant ploys by the car companies and others to restrict our ability to serve our customers, offer affordable and quality automotive replacement parts and remain competitive in the marketplace."

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The Collision Repair Association of California (CRA), which backed the bill, was disappointed in its defeat but wasn’t ready to call it a total loss.

"The CRA as a whole was quite successful at the previous
committee and judicial hearings," said Lee Amaradio Jr., CRA member and owner of Faith Quality Auto Body Inc. in Murrieta, Calif. "We’ve been able to draw attention to
many other issues and are gaining the recognition in Sacramento that
wasn’t there in the past."

"The insurance companies are presently leading people blindly and selling policies that are misleading," Amaradio added. "And while I agree that there are many great aftermarket radiators and condensers out in today’s market, there are also many poor quality parts that only mimic the OEMs’ quality. We still have a warranty issue with consumers, and the federal warranty act doesn’t cover them in this situation when an aftermarket part fails and causes residual damage.

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"We’ll continue to move forward and build on the positive things we’ve learned, and we’ll work as an industry to support those Senators who have supported us. I would like to thank Sen. Migden for all of her efforts to get this bill started. Once again, the lobbyists were out with a large force and were able to sway the vote in their direction by using misinformation as to what the bill contained."

CRA lobbyist Richard Steffen added his own take on the defeat: "Our main argument was that consumers have a right to know what is and is not in their vehicle insurance policies. The leading consumer groups (Consumers Union and Consumers for Auto Reliability and Safety) in the nation supported S.B. 1059. The opposition never commented on a consumer’s right to know. Now, this opposition is public record and, in my opinion, will serve as proof that insurers are doing a disservice to their customers when they keep the use of factory or aftermarket parts a secret. Eventually, public policy will be shaped to provide consumers with more information about their policies."  

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