Consumers and insurers would face staggering costs if car companies gain a monopoly on the crash parts market, according to research study findings recently released by the Property Casualty Insurers Association of America (PCI).
According to the study, even without the cost of paint and labor, a 2005 Ford Mustang GT built entirely from car company crash parts would cost nearly three times the car’s original price. In one example used in the report, the price of a car company right headlamp assembly for the Mustang was $156.17, compared to $121 for a certified aftermarket right headlamp.
PCI says the availability of aftermarket parts has created competition in the market and has helped bring about lower costs for replacement automobile parts.
“This study reinforces the fact that aftermarket parts not only provide lower-priced, quality alternatives, they also keep car company parts prices lower, resulting in tremendous direct and indirect savings for consumers,” said Robert Passmore, PCI’s director of personal lines.
Some automobile manufacturers are seeking replacement part patents (read story HERE), which has aftermarket parts companies on the defensive.
“Car company efforts to gain a monopoly by eliminating aftermarket parts would increase repair costs and harm consumers,” said Passmore. “The loss of a competitive market for these parts would also add more than $3 billion to insurers’ costs, which would be passed on to consumers in the form of higher insurance premiums.”
PCI says that higher repair costs also would mean that more vehicle owners without physical damage insurance coverage would be forced to forego repairs and more vehicles would be declared total losses.