Are Repair Restrictions Hurting American Small Business?

The devices and machines we use daily are becoming more and more complicated. The increasing complexity of everyday items is astounding, from smart home devices to daily electronics to our cars.

Unfortunately, manufacturers are doing everything they can to leverage that complexity into limiting a consumer’s ability to repair their cars and devices. In the automotive industry, this has resulted in automobile manufacturers using several tactics to scare consumers into using only their parts, their repair facilities, and their authorized repair shops. Anything else, they say, puts the vehicle at risk.

In May 2021, however, the Federal Trade Commission (FTC) released a report to Congress detailing how automobile manufacturers and others are trying to keep consumers from legitimate choices for repairs. The FTC document, Nixing the Fix: An FTC Report to Congress on Repair Restrictions, found that repair restrictions in the auto industry and electronics were the root of many consumer issues, including impacting the environment and our communities.

But consumers aren’t the only ones being affected by these deceptive and unfair practices.

American small business owners, and by extension their employees, are also being hurt by the methods OEMs are using to restrict consumers’ right to repair their vehicles. These small businesses, like independent auto repair shops, are the backbone of our economy. 

Many of these businesses have already been hit hard by the pandemic. Repair restrictions are adding fuel to the fire. But consumers can take actions to help protect these businesses and protect your rights to repair your vehicle your way.

The Damage of Repair Restrictions to Small Businesses and Their Employees

When you’ve been involved in an accident or need a car repair, you likely have many choices for your vehicle. OEMs try to steer you to certain shops by giving them the right to say they are an “authorized repair shop” for the OEM. As a consumer, that sounds like the right option and can be the deciding factor between two independent repair shops.

OEMs provide specialized tools, manuals, and data access that shops that don’t belong to the program can’t get through these programs. The auto manufacturers also put an emphasis on these authorized facilities only using OEM parts. They argue that these programs help small businesses, but both the right to repair advocates and the FTC disagree.

You see, there are significant costs involved in being a part of these programs. When you’re a small automotive repair shop, becoming certified to repair more than one or two brands of vehicles can incur certification fees that run into the thousands of dollars. The costs can be high enough that a repair shop must choose between certification and hiring another mechanic.

Worse, some of these programs have very restrictive requirements that an auto repair shop in a small community can’t possibly meet.  

In the FTC report, right to repair advocate Theresa McDonough is quoted as saying, “I’ve read some of the requirements that these companies have. You have to have a line of credit. You have to have a certain number of employees…the bar is very high. And for a small business, when you live in a state of 600,000 people, I just don’t see it beneficial to spend that sort of money on a certification”. 

While a community may rely on these mom-and-pop providers to keep their cars running, these businesses don’t qualify for the programs that would help them help their customers. 

Another frequent stipulation of being an authorized repair shop is that only OEM parts be used for repairs. This requirement creates a lot of problems for both small businesses and consumers.  

You see, if a vehicle manufacturer requires the use of only OEM parts from authorized repair businesses, that removes the shop’s and the consumer’s ability to choose what is best for the vehicle and the situation. Competition between OEM parts and alternative parts – also called aftermarket parts – is one thing that helps keep the cost of repairs down. 

Without alternative parts, the OEMs could charge significantly more for replacements. Not only would the additional cost hurt these independent repair shops, but that cost would also get passed on to the consumer, either through the repairs or through insurance rates

Availability of parts also becomes an issue, making it hard for small businesses to meet customer demand. OEM parts can be hard to get at times, making repairs take even longer than they should while these small businesses wait for OEM parts to arrive. While a high-quality alternative part could be available in hours or days, OEM parts can take considerably longer to source. 

This drives customers away from the small repair shops. Instead, they choose to go to the shops that have the parts they need – the dealers. It means lost business for smaller repair shops, less revenue, and less need for mechanics, front desk staff, and even parts delivery drivers.


The Advantages of a Competitive Marketplace for Repairs

Like local, independent auto repair shops, small businesses are good for the economy, employees, and consumers. Competition between repair shops ensures owners hire and train qualified mechanics and keep their prices in line with their competitors. When these small businesses can choose how they work with consumers and buy parts, everyone wins. Repair restrictions, like steering repair shops away from alternative parts, really only benefits the vehicle manufacturers.

Right to repair doesn’t mean settling – it means a healthy, competitive market that supports American small businesses and their employees. If you’d like to ensure that your right to repair your vehicle is preserved and that your local repair shop has an opportunity to earn your business, contact your state and federal congressional representatives. Tell them that you support local businesses by supporting your right to repair your vehicle your way.



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