In a January 2013 study from the Property Casualty Insurers of America (PCI), their own research shows that if Aftermarket parts were banned, this would result in a $24.00 overall increase in premium prices per insured car per year.
Excerpted from the report:
This PCI Special Report provides an update of the estimated cost impact resulting from the banning of aftermarket parts.
- If non-OEM competitive replacement parts are no longer used, this may result in an additional $2.34 billion in insurance costs per year that could be passed on to drivers in the form of higher premiums.
- The insurance premium reflecting vehicle damage coverages may increase by about 4.2 percent more per insured car. This translates into a 2.6 percent increase in the combined liability and physical damage premium per insured car if non-OEM parts could no longer be used. On average, this means about $24 added to the overall premium per insured car each year.
Is the friction, the argument and the concern over using aftermarket parts really worth $24.00 per year per insured vehicle?
Read the full PCI Special Report (PDF download)
LKQ Quarter Replacement
by DEG Administrator Art Harris
Given the amount of inquiries that we receive at the DEG I assume the replacement of a quarter panel with a used part is still a valid repair scenario for some vehicles. I would challenge that if you look at the necessary steps needed to replace a quarter panel with a used part it could not be cost effective. Now, if you are using a fictitious number like “4 hours” to remove the outer skin from the donor part then yes, on paper, it may be a valid and cost effective repair but I assure you that each vehicle is different and requires different labor times to remove the used quarter from the donor vehicle. Let’s take a closer look:
First, all three estimating systems Audatex, CCC and Mitchell create the time to replace an LKQ quarter panel base on the fact that you will be replacing the outer and inner components as a complete assembly which I am sure is not how most of us are replacing that used panel . Typically we are removing the outer skin and replacing that part only. I think the “4 hours” that some adjusters still use is based on the outdated idea of trimming the parts to be replaced as the entire component inner and outer, which is still incorrect and should vary from vehicle to vehicle.
Second each vehicle requires a different amount of time to remove the outer quarter skin from the donor part. An example could be most vehicles have an excessive amount of foams and sealers that need to be carefully removed so not to damage the LKQ part but that amount varies from each vehicle. If you look at most LKQ quarter prices versus the OEM price the difference is in the $300 to $350 range after markup and by using the fictitious 4 hours, yes, it would be cost effective but if you were to breakdown each step needed , AND charge for that step it will not be cost effective. Think of the amount of time needed just to remove all the components from the donor vehicle;
- Quarter glass (on some vehicles)
- Back glass or a portion. Most LKQ parts are delivered with a portion of the glass still attached
- Moldings and trim
- Splash shields
- Inner trim inside trunk
- Trunk hinge
- Quarter vents
- Door opening weatherstrips
- Door latch on dog leg
- Door sensors and plugs located on dog leg
These items alone could account for a majority of the cost saving from the LKQ part versus the OE part and we have not started the removal process yet.
Now that all the additional items are removed from the LKQ part we can look at the tedious task of removing the skin form the donor part. One of the first steps is removing the seam sealers, urethanes and paint from the part to access the spot welds. Looking at a corolla there is about 25+ feet of pinch welds, and flat surfaces that need to be ground to access the welds or to prep the surface for welding. 25 feet!! After that we need to drill out spot welds, which could be 60+ welds, separate the panels, clean the removed panel and dress the flanges that where damaged by removal, clean the matting surfaces then if all goes well we have a part than could be welded to the customer’s vehicle.
Spelling this out on paper does not give it justice. I recommend visiting the DEG website and viewing the video that Toby Chess had completed for a past CIC meeting of the necessary steps needed to remove the outer skin from the donor vehicle. After viewing the video I think you will agree that each vehicle requires its own evaluation of time and the “4 hours” that is typically used IS NOT SUFFICIENT in most repair scenarios. You can view the video by visiting the DEG website at www.degweb.org then select the “Get Educated” Tab and click “Knowledge Base”, or by clicking the link here.
By Kristen Hampshire, BodyShop Business
On Sept. 17, 2012, State Farm announced that the pilot program for PartsTrader was being expanded to Chicago, and collision repairers would start actively using it in December. In short order, they reported that 475 of 477 Select Service repairers in Chicago had registered for the program. Today, State Farm says all 477 have now signed up. But supplier participation is another story.
More than a few repairers are reporting that many suppliers are actively resisting PartsTrader. One shop reported that State Farm sent it a letter indicating only 48 percent of its suppliers had completed the registration process. The insurer says 266 suppliers of all part types to date are participating in PartsTrader.
“Data provided by PartsTrader suggests Chicago suppliers that are actively participating in the quoting process are generating more parts orders overall than those who have opted to only receive fax orders,” said George Avery, claims consultant with State Farm.
And as roll-out continues, Avery says that PartsTrader data also suggests repairers are shifting to participating suppliers from fax-only suppliers.
One repairer says PartsTrader has been shutting down its fax service at 5 p.m. Then, at 8:30 a.m., the fax machine is spitting out pages of parts orders that had been entered via PartsTrader at 3 p.m. the day before. He said PartsTrader has stated the fax service will end in 2014. He also said it seems PartsTrader is “punishing” dealers that have chosen the fax route. Evidence, he claims, is listing one of the largest Chrysler dealers in the area as an Isuzu/Suzuki dealer.
“That took several phone calls to change, and who knows if it will change back?” he said.
Read the full article – Chicagoland Suppliers Resisting PartsTrader
American Honda announced the launch of a new consumer website, AirbagAware.Honda.com, designed to increase awareness among consumers about the growing problem of counterfeit airbags.
Included on the site is the original October 2012 NHTSA Counterfeit Air Bag Consumer Alert, stories of those people facing criminal charges for selling counterfeit airbags, a dramatic video showing the deployment of several counterfeit airbags versus Honda Genuine airbags, and more. The AirbagAware.Honda.com website will be free-standing, but will be connected to the existing American Honda consumer website, Collision.Honda.com.
Jim Roach, Senior Vice President for American Honda’s Parts and Service Division said, “Counterfeit airbags are a growing concern because of the potential danger they pose not only to Honda owners, but to the general public. Every Honda owner should visit this new site to understand why they should demand that their collision-damaged car is properly and safely repaired.”
To promote the new website and increase consumer awareness, Honda dealers will be receiving a supply of Consumer Information Kits including a small supply of kits to distribute to collision repair shops. Shops can order additional kits, free of charge, by calling 440-572-7266 and order item #CPHABK12. The site will also be supported through advertising in various collision industry magazines.
From CollisionWeek ©
The Collision Repair Education Foundation announced the two winning Ultimate Collision Education Makeover winning schools during the organization’s industry reception held during the SEMA 2012. Nichols Career Center (Jefferson City, MO) was selected as the secondary school Makeover winner and Manhattan Area Technical College (Manhattan, KS) was selected as the post-secondary Makeover winner.
Seventy schools from thirty one states applied for the 2012 Makeover grant and a selection committee made up of the Education Foundation’s volunteer Board of Trustees selected the two schools. Over the next several months, the Education Foundation will be working to fulfill the two school’s collision programs $50,000 wish lists of needed tools equipment and supplies.
Collision Repair Education Foundation Executive Director Clark Plucinski noted, “It was great bringing the collision industry together during our industry reception to not only highlight the support the organization has provided to collision school programs through the generosity of our industry donors but also surprise both of these instructors that their collision programs will have their $50,000 wish lists fulfilled. We look forward to working together with not only the two winning schools but also focusing support on all of the applicant schools, as they took the time and effort to let us know their specific collision needs. Congratulations again to both Nichols Career Center and Manhattan Area Technical College!”
In addition to fulfilling the full wish lists of the two winning schools, as the Makeover application requires that all applicant schools provide an itemized $50,000 collision wish lists, the Education Foundation will be sharing the applicant school’s specific requests with the company’s represented in order to help as many collision programs as possible. Industry members interested in participating with the Collision Repair Education Foundation’s Makeover winning school and/or the other applicants, please contact Director of Development, Brandon Eckenrode at Brandon.Eckenrode@ed-foundation.org or 847-463-5244.
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