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Thursday, 15 June 2017 21:01

Aftermarket Industry Takes Aim at Non-OEM Parts Restrictions

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“That [argument] worked for us in the Senate [which passed the repeal], but once it got to the House, there’s a ranking member on the committee who owns a dealership,” Colas said. “So all the members looked to him as the industry expert. He again provided misinformation, saying how our parts are unsafe, and how we need to preserve the warranties on these vehicles.”


Colas said the Arkansas bill was pulled in order to keep it alive, and supporters are asking the state’s Attorney General to conduct a one-year survey into any consumer complaints related to parts over the last three years.


“We know there aren’t any, as it applies to accident, injury or death,” Colas said. The study results are to be reported to the legislature and Governor, he said, “so that a decision can be made then by a governing body as to whether or not these parts should continue to be restricted.”


Arkansas isn’t the only state where LKQ Corporation has supported legislation this year to loosen restrictions on non-OEM parts use. Colas said LKQ pushed for bills in Tennessee and West Virginia this year that would allow for fewer limits on the use of non-OEM parts. Like the Arkansas bill, the West Virginia bill is dead, Colas said, and with Tennessee “now the [auto] manufacturer mecca of the United States...the chance of us passing [that legislation] is slim.”


But Colas said LKQ likely will follow the same path in Tennessee and West Virginia that it has in Arkansas: asking those states’ attorneys general or insurance commissioners to conduct studies into whether use of non-OEM parts has led to accidents, injuries or deaths, and “then report back to leadership in that state...whether or not these parts should be restricted.”


Colas said after meeting with a New York lawmaker who introduced a bill this year that would require that vehicle owners provide a written signature consenting to the parts that will be used in the repair of their vehicle, that lawmaker “has no interest in moving the bill.” But later in his ABPA presentation Colas also said, “We have no problem with making sure the consumer is aware of the type of parts being used for repairing their vehicle.”


In Wyoming, Colas said, the Department of Insurance is proposing a change to its 1988 regulations regarding the use of non-OEM parts. Those regulations currently prohibit insurers from requiring the use of any such parts unless the parts are equal in quality to OEM “in terms of fit and performance,” and unless the consumer is notified that “he or she is not required to accept non-OEM parts” and consents to their use in writing.


The Wyoming Department of Insurance has proposed an addition to the regulation that states, “No insurer shall directly or indirectly require the consumer to pay any difference in price if the consumer elects to use OEM parts in the repair of the vehicle.”
LKQ’s Colas said this is something his company is opposing.


“If you incentivize that consumer by telling them whether you choose OEM or aftermarket, there’s no cost impact to you, why would they ever choose an aftermarket part, if it’s essentially going to be for the same price,” Colas said. “We’re telling [regulators] that you’re effectively eliminating the use of aftermarket parts if you adopt such language. So we are in a battle there in the state of Wyoming...It is a threat to our industry in that state.”

 

John Yoswick, a freelance writer based in Portland, Oregon, who has been writing about the automotive industry since 1988, is also the editor of the weekly CRASH Network bulletin (www.CrashNetwork.com). He can be contacted by email at john@CrashNetwork.com.


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