ausauto News Article

Rebuilding a tired old argument

Yet another insurance related organisation in the United States has conducted yet another 'extensive study' and come up with the not surprising conclusion that if the original vehicle manufacturers are allowed to take out patents on their auto parts it will result in massive repair bills that will harm the public.

The research uses the tired and rusty old method of comparing a vehicle built entirely from replacement parts with one that rolls off the production line.

Not surprisingly, the latter is about a third cheaper, all of which is suppose to show that the OEMs are ripping off the public.

This particular study compares original Mustang parts such as an OEM right side headlight costing $US156 as against $US121 for a similar aftermarket unit before getting to the real nitty gritty of this, and most other surveys conducted on behalf of insurers, the promotion of aftermarket 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 a spokesman for Property Casualty Insurers Association of America.

But do they?

Using the prices provided in the study, the 2005 Mustang used as an example cost 2.84 times the cost of the original car when rebuilt with OEM replacement parts.

If it were possible, which it is not due to the limited range, rebuilding the Mustang with aftermarket parts would cost 2.26 times the original cost of the vehicle.

Using the same insurance industry conclusion, this must mean that it is the aftermarket replacement industry, that does little more than copy the original part, that is really ripping off the public.

It's a silly argument designed to deflect scrutiny of the cost of vehicle insurance.

The cost of rebuilding any modern manufactured item will always be in excess of the original price when it is rebuilt with parts that are priced based on being individually packaged, shipped, stored, handled, delivered and invoiced.

The insurance industry always portrays itself as having the interest of the public at heart, yet this very same 'public' always expresses a desire for genuine parts over the alternative.

And the same goes for the vast majority of repairers.

The report concludes: "The loss of a competitive market for [aftermarket] 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."

And the cost of the loss of the automotive manufacturers?

Priceless!