Insurers Release Study Indicating Potential Costs of OEM Parts Monopoly - BodyShop Business

Insurers Release Study Indicating Potential Costs of OEM Parts Monopoly

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.

To read the report, click HERE. To read a debate between repairers about whether aftermarket parts are good or bad for the industry, click HERE.

You May Also Like

Body Bangin’ Southeast Collision Conference: To Calibrate or Not to Calibrate with Greg Peeters

Live from the Southeast Collision Conference, Micki Woods interviews Greg Peeters of Car ADAS on what it takes to do an accurate calibration.

Micki Woods, master marketer for collision repair shops and owner of Micki Woods Marketing, is kicking off a series of daily podcasts from the Carolinas Collision Association's 2024 Southeast Collision Conference. This series is sponsored by Lombard Equipment, which offers a premier line of automotive collision repair equipment for all your OEM certification needs.

Body Bangin’ Southeast Collision Conference: Building Value in Your Business with Matt DiFrancesco

Live from the Southeast Collision Conference, Micki Woods interviews Matt DiFrancesco on how to make your business as valuable as possible.

Body Bangin’ Southeast Collision Conference: Future-proof Your Shop with Mike Anderson

Live from the Southeast Collision Conference, Micki Woods interviews Mike Anderson on finding the formula for future success.

Body Bangin’: Taking the Gloves Off with Clay Hoberecht

Micki Woods interviews Best Body Shop Owner and Vehicle Care RockStar Clay Hoberecht on how he stands out in a crowded industry.

Body Bangin’: Are You Ready for the Southeast Collision Conference?

Micki Woods interviews Jordan Hendler and Josh Kent about the upcoming Southeast Collision Conference May 16-18, 2024 in Greensboro, N.C.

Other Posts

Body Bangin’: Hidden Gems to Grow Your Business with Rick Selover

Micki Woods interviews collision consultant Rick Selover on things you can do to immediately impact your person, body and business.

Body Bangin’: NORTHEAST Show Highlights with Ken Miller

Micki Woods interviews AASP/NJ President Ken Miller on highlights from the NORTHEAST Show.

Body Bangin’: Overcoming Common Shop Challenges with Kyle Motzkus

Micki Woods interviews Kyle Motzkus of Hunter Auto Body on common challenges collision shops face.

Body Bangin’: The Keys to Success with Louie Sharp

Micki Woods interviews Louie Sharp of Sharp Auto Body on life lessons learned from the Marines and how love conquers all.