Putting the Screws to Your Wallet: The Car Companies SECRET Tactics Hurting Consumers

If you search for aftermarket car parts or even aftermarket crash parts, you’ll see a lot of information claiming that parts not made by the Original Equipment Manufacturer (OEM) shouldn’t be put on your car. In reality, many aftermarket parts – also known as alternative parts – are as well made and sometimes even better than the original parts from the car manufacturer.

So why the dispute? It’s simple – alternative parts offer competition to OEM parts, and the car companies don’t like that. In response, car companies today are doing everything they can to push alternative parts out of the market, and they are using a number of tactics to do that.

However, at the end of the day, lack of competition is bad for consumers – it’s bad for the control you have over how your car is repaired, it’s bad for the long-term maintenance of your vehicle, and it’s bad for your pocketbook.

It’s important consumers understand the games that car companies are trying to play to keep out the competition, and what it will mean to you if they succeed.

The Tactics Car Companies Use

Automobile manufacturers want to protect their profits, and they see the alternative parts industry as a threat to that, for good reason. Thanks to the competition that alternative parts provide, the average price of OEM parts has been reduced by about 8%.

The car companies aren’t taking this sitting down. Instead, they are systematically attacking the alternative parts industry, using every tool at their disposal.

Misuse of Design Patents

Patents were created to protect the intellectual property rights of inventors. These patents cover the functionality of a product or device so that the original inventor can get the most from their ingenuity before others can use their ideas, too.

Design patents, however, are different. A design patent is a kind of legal protection for the way something looks, not how it operates. You’re probably familiar with a few objects that have design patents on them, like Coca-Cola’s glass bottle.

A design patent is intended for the overall design of a product. However, car companies have begun using design patents by registering them on specific parts of vehicles. In other words, in addition to a design patent on an F-150 Ford claims patents on specific parts. And, in 2005, Ford Global Technologies filed complaints with the International Trade Commission claiming design patent infringement against alternative parts manufacturers and distributors, resulting in effectively eliminating competition for 7 repair parts for years to come.

Since then, the number of design patents granted to OEMs has skyrocketed, and the car companies are wielding these patents as weapons against alternative parts manufacturers. A design patent may only last 14 or 15 years, but with the average age of a vehicle in the U.S. sitting just below 12 years old, consumers are left without alternatives for parts for their aging cars and trucks.

Position Statements and Repair Procedures

Within the vehicle repair industry, there is an unspoken but generally accepted understanding that the best way to repair a vehicle is to follow the approved repair process published by the manufacturer. These repair procedures and associated position statements are intended to provide guidance to repair shops on the right ways to fix various makes and models. 

In recent years, however, car manufacturers have taken the bold step of using position statements to denounce alternative parts and using repair procedures to push forward only OEM parts. 

While car companies release repair procedures that require OEM parts for proper repairs, state legislatures are mandating that satisfactory repair of a vehicle must follow a manufacturer’s procedures and recommendations and that insurers cannot require anything other than meeting those requirements. Between 2010 and 2019, 105 anti-alternative parts bills and regulations have been introduced across the United States. 

Trademarks that Influence US Customs

Similar to the design patent surge starting in 2005, alternative collision repair parts began to see a significant uptick in the number of import containers being flagged by US Customs as having items that violate trademarks. These shipments had, for years, proceeded without challenge or incident until 2017.

Once the holders of the trademarks – the car companies – allege infringement, the shipments are held and the importers are red-flagged. All future shipments from these importers then face increased scrutiny and seizure of their containers, slowing the flow of legitimate alternative parts into the country and forcing consumers to purchase OEM parts due to lack of availability of alternatives.

The Impact on Consumers

These tactics being used by car companies have very real impacts on consumers. First, with reduced alternatives available, car owners don’t have the choice of fixing their own vehicles in the way that they choose to.

Of course, with less competition, the OEMs are able to drive up the cost of parts and with few alternatives, consumers will need to pay what the car companies demand. That’s bad news when you’re changing out a headlight or even a windshield wiper blade.

Worse, it will have a detrimental effect on your insurance rates. As the costs of repairs climb, those increases will be passed along to car owners. If alternative parts are eliminated, it’s estimated that insurance repair costs will increase by over $3.2 billion. You can be sure that you’ll be covering that increase, not the insurance companies.

In fact, average auto insurance expenditure has, in recent years, increased every year. According to the National Association of Insurance Commissioners, the average insurance cost in 2015 was $889.09, with a 5.3% bump to $935.80 in 2016. In 2017, the top 10 insurers saw premium bumps of 7.2% over the 2016 rates. And increases are expected to continue.

Conclusion

The car companies aren’t playing fair when it comes to replacement parts and the alternative parts market. They are using every advantage they can, even twisting some of their advantages in ways that were never intended. The results are fewer choices for consumers and increased costs – for parts and for insurance – that are accelerating.

This is a challenge that is meaningful to everyone that owns a car, whether you’d normally choose OEM parts, or you put your trust in reliable, quality aftermarket parts. Without competition, the costs to repair and maintain your vehicles will continue to increase. Just as the car companies planned.

If you want to protect your right to choose the parts you use, or are concerned about the potential of increased repair and insurance costs, there are a number of things you can do, including contacting your state and federal representatives. Let them know that you want to keep your choice and maintain healthy competition in the automotive parts market.