AAI Study Highlights Reported Replacement Parts Rip-Off

October 10, 2002

A new study by the Alliance of American Insurers demonstrates that auto owners and their insurance companies continue to pay large prices to repair damaged vehicles using so-called “genuine” parts supplied by car manufacturers.

Over the past 21 years, the Alliance has conducted numerous studies on the cost of crash parts using a variety of automobile models to demonstrate the excessive cost of car company parts. The cost of rebuilding a vehicle with car company parts generally triples the car’s original cost.

This year’s study focused on a 2002 Dodge Grand Caravan Sport, which has a retail price of $24,815. When totaled out and rebuilt entirely from car company parts, the cost soars to $71,631, not including the cost of labor and paint.

“The cost of repairing damaged automobiles accounts for between 40 and 50 percent of the insurance premium for most auto insurance consumers,” Kirk Hansen, Alliance director of claims, said. “Therefore, the cost of crash parts has a significant, direct impact on the price consumers pay for auto insurance. Expensive parts result in more costly repairs, which in turn result in higher premiums. In addition, many vehicles that should be repaired must be totaled due to the high cost of car company parts.”

Recently, the Certified Automotive Parts Association (CAPA), Washington D.C., announced that between 1999 and 2002, it had put 1,907 “genuine” car company parts through an extensive vehicle test fit and discovered that 50 percent of the parts did not meet CAPA standards for fit, finish and appearance.

Despite the questions of quality raised, the car companies reportedly consistently market their parts as “genuine” and charge an average of 60 percent more than generic parts supplied by independent manufacturers.

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