Reporter's Blog

The Dollars and Cents Behind the Parts Debate

Order Reprints

"It's really all about dollars and cents," Aaron Schulenburg, executive director for the Society of Collision Repair Specialists, says.

He says insurers want to preserve their ability to mitigate claim costs. If non-OEM replacement parts were no longer uses, it may result in an additional $2.34 billion in insurance costs.

According to the Property Casualty Insurers Association of America's (PCAA) 2013 report: On average, about $24 is added to the overall premium per insured car each year.

Schulenburg says he believes the 2015 data from PCAA actually lowered that expectation of $24 to $20 a year in savings.

Other facts in the OEM vs. aftermarket part choice:

  • Schulenburg says it is becoming more common that insurers are sourcing parts from out of state, from discounted vendors the shop has no relationship with, with slow return policies, and in many cases writing for parts that have no quality standards. 
  • There is a concern that the supply chain will not be able to fill the parts listed on the estimate.
  • There is a cost to the administration of handling parts that have a higher rate of fit and finish issues, and warranties that don't recognize the lost revenue to shops.
  • There is a multi-billion dollar industry of companies that replicate OEM parts in the aftermarket who want to preserve the ability to reproduce parts.

Related Articles

The Ongoing Debate: OEM vs. Aftermarket Parts

Video: Auto Body Association and Insurer Debate R.I. OEM Parts Bill

You must login or register in order to post a comment.