The Aftermarket Parts War - BodyShop Business

The Aftermarket Parts War

Don't surrender in defeat. If your business has suffered because of imitation-parts usage, consider these strategies to help heal your battle wounds.

Note: The information in this article is the opinion of the
writer and does not necessarily represent the views of BodyShop

When asked what’s the worst problem facing collision repairers
today, many shop owners will answer, "aftermarket" parts.
The consensus is universal that these parts are inferior, even
if CAPA certified. Actually, they aren’t even aftermarket parts
in the correct sense of the term (as with an aftermarket battery)
and should, therefore, be referred to as imitation parts.

Shop owners knew from the beginning that imitation-parts usage
would reduce parts profits but only became aware of the many other
problems they cause after using them for several years, such as
the devastating effect on shop workflow and the gradual erosion
of customer goodwill because repaired cars often don’t look as
good as they used to or get returned to the owner as promptly
as they should. (In some cases, a customer will accept a vehicle
without complaint, but then concludes that the shop’s quality
and standards have slipped.)

While the problems caused by imitation parts are universal, the
solutions used by collision repairers to overcome these problems
vary radically.

But, before examining solutions, let’s take a look at some of
the problems caused by the use of these parts.

Common Complaints

When it comes to the use of aftermarket parts, common complaints
from collision repairers include:

  1. Legal liability. This relates to fraud (genuine parts were
    not supplied), diminished value and bodily injury/death claims
    (the plaintiff suffers in an accident because the car wasn’t previously
    repaired with genuine parts). Most defendants in any of these
    suits would find it impossible to say they believed the non-OEM
    parts they installed were equivalent because most of them routinely
    tell customers that these parts are inferior.
  2. Paint-shop bottleneck. Very few shops will edge imitation
    parts in advance because they may not fit.

  3. R&R&R&R. Double installation time is needed to
    check fit up.

  4. Additional basic R&R time (for example, impact strips
    that must be secured with clips rather than mounted with push-through

  5. Missing components. Often small clips, brackets, steel bumper-cover
    retainers, etc., are included with OEM parts but not with non-OEM

  6. Shop schedule delays. Work stops when an imitation part doesn’t
    fit, pending a reinspection by the appraiser. Unfortunately, many
    shops are absorbing extra hours required to modify defective parts
    rather than having an idle technician waiting around for the appraiser.

  7. Unhappy customers due to delays.
  8. Vendors dictated by insurance companies. Some companies are
    disclaiming responsibility if the shop doesn’t buy each imitation
    part from the specific vendor listed in the appraisal.

  9. Interruption of work when non-OEM parts are delivered. Many
    shop owners feel the need to check non-OEM parts before accepting
    a delivery because quality is so inconsistent.

  10. C.O.D./U.P.S. shipments. When an out-of-town vendor ships
    by U.P.S., the shop is forced to pay for parts before they can
    be inspected.
  11. Supplement paperwork when imitation parts aren’t available.
    On average, approximately 30 percent of non-OEM parts listed in
    appraisals aren’t available.

  12. Bookkeeping paperwork for unusable parts that are returned.
  13. Vendor blackballs. Some shops report that imitation-parts
    distributors have refused further business from them following
    a series of returns or back charges.

  14. Increased customer comebacks due to a general lower quality
    of imitation parts.

In Search of Solutions

Some ways shop owners have chosen to deal with the problems caused
by imitation-parts usage include:

  • Educating consumers. An educated consumer can object
    to the use of imitation parts and argue that while a non-OEM part
    on his car could be replaced with another, an OEM part coming
    off his car should be replaced with another OEM part (this seems
    to be the test increasingly cited in court decisions).

The consumer will usually prevail if any difference in the parts
can be noted (a condenser that’s made of copper rather than aluminum,
a grille without the bowtie area for a Chevrolet emblem, etc.).
It’s also helpful to refer to these parts as imitation parts at
all times, rather than accepting the aftermarket term.

  • Dealers refusing to use. Dealers are in a particularly
    strong position and can refuse completely to use non-OEM parts
    since they, as representatives of a car company, are required
    to perform all work in accordance with manufacturer recommendations,
    which means using only recommended parts.
  • Asking for signed statements. Another useful technique
    can be to ask the customer and/or the insurance company to sign
    a simple written statement that releases the shop from any liability
    in connection with imitation parts used in repairs. At this point,
    many customers are willing to either complain to their agent or
    pay extra for genuine parts.

  • Preparing customers for delays. When shop personnel
    explain what happens when they’re forced to experiment with these
    parts and then wait for appraisers to come out to see them, some
    customers will choose to pay for genuine parts. If, however, a
    customer doesn’t offer to pay, it then becomes imperative to inform
    him when the delays actually occur as predicted. Imitation parts
    have caused many body shops to be criticized for not getting a
    car done on time.

  • Insisting that vendors deliver. Some problems are easily
    avoided by insisting that the insurance company only select vendors
    who physically deliver to the shop, thereby avoiding the U.P.S./C.O.D.

  • Charging for additional time. Since book times are
    for OEM parts, some shops demand a standard additional 50 percent
    R&R time if imitation parts are to be used – not just for
    modifying the parts, but also to cover the double fit-up time.
    "Prefit parts" should actually be a standard estimating
    item for all parts because they’re not included in R&R times.
  • Ordering both the OEM part and the imitation part.
    To avoid downtime when imitation parts don’t fit, some shops order
    a genuine part, too, knowing that one of the two parts will be
    returned for credit. For the same reason, many managers automatically
    buy genuine parts whenever the price difference is small, which
    amounts to giving the insurance company genuine parts for the
    price of imitation parts.

Can You Maintain Profitability?

When imitation parts are used, successful shops note all additional
time and materials involved and then back charge the vendor or
recover the money from the insurance company in a supplement.
Technicians, however, must inform the front office of every associated
problem, such as missing components in an assembly, the need for
two-tone painting on a grille or bumper cover, etc. When the insurance
company compensates the shop, the vendor is typically back charged
by the insurance company.

At times, it’s necessary to remove the imitation part that doesn’t
fit and replace it with a genuine part to prove that the fault
doesn’t lie with the shop’s structural work. From my experience,
about 99 percent of adjusters will back down and let you order
genuine parts once you’ve shown them that the problem is with
the part. Due to such a demonstration, most adjusters will then
also agree to pay for double R&R time and also vehicle storage
charges if completion of the job is delayed by problems with imitation
parts. When an adjuster concedes that the part isn’t equivalent
to OEM, he then loses his ability to take a 10 percent discount
on genuine parts on future jobs because he can no longer argue
that acceptable aftermarket parts are available.

Equally important to maintaining profitability is insisting on
a revised appraisal without overlap deductions whenever an adjuster
agrees to allow a genuine part in place of an imitation part.
Why? Because the genuine part will be installed later, not at
the same time. When a painted part doesn’t fit and is then replaced
with an OEM part, there can be no deduction for overlap from a
part painted earlier – plus, the shop is entitled to a second
refinishing set-up allowance (.6 with ADP, for example).

Finally, another way to help maintain profitability is to avoid
lost shop time that results when a customer returns with a complaint
about imitation parts. Since the insurance companies boast that
they guarantee these parts – parts the shop never recommended
using – the shop has every right to explain to the customer that
it guarantees all work and parts – except for imitation parts
because those parts are guaranteed by the insurance company. A
rubber stamp for this disclaimer on invoices is useful. Then,
when there’s a problem, the insurance company will be forced to
find somewhere else to have the problem checked.

The Battle Rages On

No one knows for sure how this battle will end; it could escalate
next year, and insurance companies could start substituting a
Pep Boys tire for a Michelin – hopefully not, but who can predict?

For now, however, many shops don’t appear ready to throw in the
white flag and surrender; instead, they continue to fight for
what they believe in by using the strategies discussed above.
On some repairs, the strategies have been successful; on others,
the strategies haven’t been, i.e., the insurance company still
wouldn’t allow OE parts, the customer still decides to be angry
at the shop for delays, etc.

But the fact is, if you and your business are suffering because
of imitation parts and if you don’t at least try to improve the
situation by employing some of the suggested tactics, then quit
complaining – and be prepared to continue suffering because the
situation isn’t going to improve on its own.

Writer Richard Michaels is a collision repair shop owner with
more than 17 years of industry experience.

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