What's Next for Crash Parts?

The replacement crash parts issue continues to evolve for the repair industry. Since the 1995 passage of legislation in West Virginia, we have had a great deal of activity with the issue of crash parts. This has led to year after year of bill introduction from 20 bills a year to almost 40 bills this past legislative season. This does not include the regulatory attempts at making the use of replacement crash parts more consumer friendly.

Last year might have been the most critical juncture for the crash parts debate beginning with a February 1999 Consumer Reports cover story titled "Shoddy Auto Parts." This was the first major piece during the late '90s highlighting consumer issues relative to crash parts. Later in 1999, State Farm Insurance Co. was dealt a serious blow with a Marion, Ill., state court decision on aftermarket parts. The national media focused for days on the size of the verdict and on what had previously been an industry trade press issue.

With the State Farm case on appeal, no short-run decision is likely in that case. Is there any certainty that the final decision or settlement in this case will produce a sufficient industry resolution to the crash parts problem? Will legislation resolve the issue? Possibly. But this, too, seems unlikely with insurers and repairers locked in a national standoff on crash parts. Since the 1997 Crash Parts Industry Summits, ASA has promoted the concept of consumer notice and consent.

Although much of the state legislation has begun to move this way with less focus on “original equipment manufactured parts only” black-out periods, the bills are constantly opposed by the insurance industry and receive very limited support from the original equipment manufacturers. The policy is right but insurers are unlikely to buy off on any formal consent process after a collision has taken place as to the use of a particular part. Heightening notice provisions does not seem to be a sticking point with insurers but consumer post-collision consent continues to be difficult.

ASA has held a series of meetings with the aftermarket parts distributors, insurers and the Certified Automotive Parts Association (CAPA) to discuss industry solutions to the crash parts debate. Insurers did not participate in the 1997 summits held by ASA.

Johnny Mock, ASA's immediate past chairman, (left) and U.S. Rep. Ron Klink, D-Pa., at a recent meeting in Washington, D.C. Mock and other ASA leaders discussed legislative issues affecting the automotive service industry.

What is becoming increasingly clear is that a state legislative approach for crash parts will be problematic. Our industry is facing this scenario at the present with state titling laws. They are all different. These titling laws feed a multitude of problems including stolen auto parts. Fifty different crash parts laws in the states are not the best solution. Is this an opportunity for a national regulatory process? Repairers continue to list safety and quality concerns in the use of some aftermarket parts. What role should the National Highway Traffic Safety Administration (NHTSA) play with regard to safety? Should the Federal Trade Commission pursue quality criteria for crash parts? Why does the U.S. Customs Service inspect automobiles coming into the United States, but not review automotive crash parts?

These are tough questions. U.S. Rep. Ron Klink, D-Pa., has contacted the General Accounting Office about reviewing the crash parts issue. Representative Klink is a senior member of the U.S. House Commerce Committee.

Part of this review would include determining what parts are currently being inspected, what authority for inspection these agencies have under current law, why parts on new automobiles are treated differently than replacement parts and finally, to what standard imported replacement crash parts are being held.

Can a substantive national certification program work? CAPA has been controversial in our industry. If federal regulators have some role in the certification or review process, would this be sufficient to put aside industry concerns or at least move the parts resolve in the right direction? The national certifying entity must involve repairers in its process. They know these parts, the quality and safety concerns. Their role is essential in determining not only what issues are important for the consumer but also to clarify the hidden costs such as labor and shipping that continue to lie at the base of this controversy. Whether it is CAPA or another certifying entity, they must seek a balance of consumers, insurers and repairers in their governing or advisory body.

The final solution for crash parts is still ahead of us. It is important that insurers and repairers maintain a dialogue to find the best resolve. The legislative standoff of the past few years is not best for the consumer or the repairer. If the consumer loses so does the insurer.

A national model may evolve that benefits repairers, consumers and insurers. Without consensus this problem won't go away.


At 3:45 PM, Anonymous Anonymous said...

In 2003, the Illinois Supreme Court reversed Avery v. State Farm, the non-OEM parts case refered to in this blog. The court sided with State Farm and reversed both trial and appellate court rulings. Plaintiffs did not seek an appeal before the U.S. Supreme Court.

Phil Supple
Corporate External Relations
State Farm


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